Doing away with paper invoices could save EUR 400 million

Only around 15 per cent of Finns use electronic billing "Doing away with paper invoices could save EUR 400 million a year" by Petri Sajari; "The costs incurred in sending bills to consumers inside envelopes add up to enormous sums each year.“If all consumers in Finland were to use electronic invoicing, the annual savings for those sending out the bills could be in the region of EUR 400 million”, says Bo Harald, who chairs the the European Commission’s expert Task Force on e-Invoicing. Harald believes that the savings enjoyed by the invoicers would ultimately trickle down into consumer prices. The Federation of Finnish Financial Services (FFFS), representing companies operating in the financial sector in this country, has made the same sort of calculations as Harald.
By using e-invoices and online banking, consumers could reduce the use of paper, cut emissions arising out of the delivery of mail, and they would also be spared the chore of keying in long invoice reference numbers. "More than one in five of online banking users in Finland would be keen to use e-invoicing. Around 15 per cent actually use e-invoices”, estimates Kaija Erjanti, who heads the FFFS’s financial markets and payment systems division. For example in Norway, around 40% of consumers now handle their regular payments without paper invoices. The share of e-invoices in consumer invoicing is surprisingly low in Finland, notwithstanding the fact that nearly 70 per cent of Finns between the ages of 15 and 74 years already pay their bills via the Net. Finnish consumers receive around 250 million invoices for goods and services each year. In the view of Bo Harald, changing over to electronic invoicing will not bring additional costs either for the sender of the invoice or for the person receiving and paying it. Currently the situation does somewhat resemble the old army joke about digging a hole and filling it in again. Large billers, like utilities, have their paper invoices made for them by subcontractors. The billing information is passed electronically to the subcontractor, which prints the invoice out on headed paper and then stuffs it into an envelope. Fourteen days or so later, the recipient of the invoice logs in to his or her online bank, and keys in the data on the paper invoice, turning it back into electronic form, before the payer approves the payment with another few keystrokes. I have not been able to come up with any intelligent arguments in defence of paper invoices”, sighs Bo Harald.

Harald has been developing e-banking from the early 1980s, when the then SYP or Union Bank of Finland started home banking. He first worked for SYP, then for Merita and Nordea as Director of Payments and e-Services and Deputy CEO, and since 2005 he has headed a new Executive Advisors unit at IT services company Tietoenator. The advantages and ease of electronic invoicing has been trumpeted in Finland for close on a decade now. Harald believes that the conditions are already right for doing away with paper invoicing on business-to-business payments, since around 100,000 companies have agreed on e-invoicing. "In Norway and Sweden cooperation between banks and the corporate sector on electronic payments initially took off rather less well than it did in Finland. Partly for that reason, the decision was made to develop the idea in those countries firstly for consumers. In Finland, meanwhile, the consumers were forgotten for years on end”, Bo Harald comments. Another brake on the onward march of e-invoicing in Finland has been a shortage of companies who have had e-billing to consumers on their agenda. In Norway, consumers are given a sharp prod in the direction of e-payments by additional charges.

If the payee absolutely insists on getting an invoice through his letterbox in an envelope, then he may find himself having to pay the equivalent of an additional 5 to 10 euros for the privilege. From the beginning of April of this year, the Finnish teleoperator TeliaSonera intends to add a EUR 1.00 fee for sending a paper broadband invoice to customers. “The Norwegian model confirms the argument that it is only with measured use of the stick that consumers can be persuaded to act in their own interests”, says Harald. Bo Harald himself was rapping consumers across the knuckles for the first time in 1983, at SYP. "The introduction of a 50 penni handling charge on payments by cheque caused the number of cheque transactions to fall practically to zero overnight.” The European Commission is now throwing in a big gear to get electronic invoicing into business-to-pusiness payments in all member countries. The Commission is fervently advocating the Single European Payments Area, SEPA. If the EU can succeed in revamping invoicing through electronic means to the extent that Finland currently has a readiness for, then according to the Internal Market and Services Commissioner Charlie McCreevy, the cost-savings across the Union as a whole could amount to a thumping EUR 240 billion a year, if SEPA is used as a platform for e-invoicing.