The Future of Accounting is Digital
The financial services industry is evolving rapidly, propelled by the rise of new technologies and software. Accounting is also stepping up its pace, striving to implement and extend the usage of electronic invoice systems. Once rolled out on a larger scale, electronic billing has the potential to save costs, speed up transactions, and ease the environmental burden.
Serial entrepreneur, author of ten books, and fintech enthusiast Werner Valeur strongly believes that the future of accounting is digital. From automated data capture, direct data transfer between transaction participants, and real-time payments to the replacement of Excel spreadsheets and innovative ways to automate financial processes – Valeur is optimistic about the potential of this industry and the vast opportunities that digitalization will facilitate.
“Digitalized and automated processes allow for more data points. This way, the company has access to more information and can better optimize its strategy.”
Electronic invoicing is one of the major goals and an essential step in the future development of accounting systems. Electronic bill payment is a system that allows the transaction parties to generate, send, pay, and trace their bills electronically via the internet, instead of the obsolete exchange of paper invoices via post or email (scans). This process is sped up and facilitated by the latest technological developments, access to cloud services, widespread internet access, and the increase in digital literacy among the general population.
In 2017, 90 percent of the documents were managed as paper records, but experts and business analyses indicate a significant change in the future. Valeur expects that electronic invoices will become a generally accepted transaction model in northern Europe by 2025, and in the other regions of Europe a few years later.
Multiple national initiatives have been launched across different countries, but the most important challenges are posed by cross-border harmonization, collaborative approaches, and the spread of adoption.
Already in 2014, the European Parliament and Council set in place Directive 2014/55/EU, aiming to develop a common European standard on electronic invoicing. This will lead to increased interoperability and better synchronization across countries.
Researchers have already identified a high adoption rate of e-invoices among young consumers, which will speed up implementation even more, given the rise of a new generation of “digital natives”.
“In accounting, there are a lot of highly educated people, and the potential for advancement is huge. However, most of them have been educated according to outdated principles which don’t fit anymore in the current digital society. Therefore, the digitalization of accounting should already begin within the education system.”
Regarding the impact at company level, e-invoicing is expected to generate up to 80 percent in cost savings compared to paper-based processes, reduce the payment-associated risks and lead to centralized management of financial documents.
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Edicom Group, “E-Invoicing Status Worldwide,” June 5, 2017, https://globaleinvoicing.com/en/news/e-invoicing-status-worldwide.
Bruno Koch, “The E-Invoicing Journey 2019-2025” (Billentis, September 2019).