The industry initiative that will change how you send and receive invoices.
It’s clear that we can’t keep on with business as usual – sending and receiving invoices by mail or email – not if we want to be competitive in today’s business environment. Manual methods are just too inefficient, time-consuming and error-prone, and end up delaying supplier payments.
To address these issues and modernize B2B payments, The Federal Reserve established
The BPC has undertaken several initiatives to advance B2B payment modernization, including building a virtual exchange network of providers that allows all types of businesses to transmit and receive e-invoices. The concept of an
We had a chance to catch up with Anna Tujunen, our Chief Product Officer and a member of the BPC market pilot workgroup. She updated us on the progress of the initiative, where it’s heading, and what it means for all types of businesses. Below are highlights from our conversation.
Dooap: What is the goal of the initiative?
Anna: The overall goal is to establish an inexpensive, trusted, and secure network for exchanging invoices, which are the most common business documents. The first step in the process was to test assumptions and requirements for the US market. These were then validated in a proof of concept last year. Now, we are in the market pilot phase, when many companies will implement the set of prescriptive standards that we created for the exchange framework.
Dooap: Describe the pilot
Anna: The BPC initially planned on targeting 20 companies to participate in the pilot, but given the overwhelming industry support for the initiative, 73 companies signed on. Most of these are service providers, each representing hundreds or thousands of customers. The service providers serve as the access points to the network and do all the technical work in establishing and maintaining the connections. Their customers don’t have to necessarily do anything or change their existing interfaces; For them, it’s similar to making a phone call. The telephone companies do all the work behind the scenes to make the connections happen, and the customers simply make the calls.
Dooap: What is the timeframe for the pilot?
Anna: Testing will begin in 2022, and rollout will be completed by 2023. It is not too late for companies to join the market pilot now or at any time, and, if all goes well, the market pilot will transition directly to a production-type environment.
Dooap: What geographic areas does the pilot cover?
Anna: It currently covers the North-American market – the US, Canada, and Mexico. Once the network is out of the pilot stage and is fully functional, there is nothing stopping us from ultimately connecting it to other networks or even to a global network.
Dooap: What are your expectations of how the pilot will work?
Anna: We want to make sure that the network works well technically and also covers the needs of businesses. We also will be creating guidelines to ensure it is effective for all types of businesses.
Dooap: Are there similar network models underway in other parts of the world?
Dooap: What will you do to drive the adoption of the E-invoice Exchange Network?
Anna: We have established a subgroup within the BPC to focus on this area because it is so important. The more companies that use the E-invoice Exchange Network, the more it will encourage their customers and suppliers to use it, and it will grow through a network effect. Also, the larger it becomes, the more value it provides to businesses.
Dooap: What does this mean for businesses? What is the significance of this initiative?
Anna: We’ve all seen the downside of trying to do business with trading partners using painful manual methods, which was particularly during the pandemic. It is simply an antiquated method that is no longer viable in the 21st century. Those who don’t embrace e-invoicing will be left behind and will be solving their AP and AR processes and technology alone. This is the first time in the US where industries are coming together to solve a mutual problem, in the most cost-effective way to gain maximum efficiency.
By contrast, e-invoicing is a no-brainer. It benefits everyone: the buyers, who can gain efficiencies, while cutting costs, and the suppliers who can enjoy faster payments and improved working capital. It’s a win-win all the way around.
Stay tuned to the Dooap blog for more updates on the E-invoice Exchange Network as well as other industry initiatives.