Six months after the entry into force of the obligation to make an electronic invoice between undertakings and the date of 1 July 2019, when the moratorium expires and the time limits for issuing and penalties for late dispatch to the Interchange System (SdI),
The Observatory for Electronic Billing & eCommerce B2b of the School of Management of the Politecnico di Milano, in presenting its latest research on the subject (more information is available at this link).
Below we take back some research results.
Invoices to companies ( 54%), PA (2%) and private (44%) sent between 1 January and 1 June by 3.2 million VAT consignments ( 64% of Italian companies, more than 2.8 million companies subject to the obligation) amounted to 854 million.
Only 3% (25 million) of invoices were discarded by the SdI. Almost two thirds of the invoices sent come from the wholesale and retail sectors (28%), utilities (19%) and services (17%). More than half of the invoices were sent by companies based in Lombardy (34%) and Lazio (22%), only 12% came from the South and Islands.
More than half of the companies, the Observatory’s study continues, declares benefits on the process of receiving invoices and 30% has achieved improvements even during the sending phase. Business opportunities include access to new data flows that can be used to improve business processes, digitise other documents and boost the adoption of digital tools in business transactions.
In 2018 the B2b trading company in Italy reached a value of 360 billion euros, up 7% compared to the previous year and up by 80% compared to 2012.
A significant figure, but representing only 16% of total trade between Italian companies (2,200 billion), while the incidence of the B2b of Italian companies to foreign companies appears to be greater, representing 132 billion (more than 26% of total transaction to the metropolitan area). The use of EDI systems for electronic document exchange is also growing, with 210 million documents (+27%) exchanged by 16 thousand companies (+23%), of which more than a quarter are invoices.
The impact of the electronic invoice
Alessandro Perego, Scientific Director of the Digital Innovation Observers of the School of Management of the Politecnico di Milano, stated in a note that “electronic invoicing is not the digital transposition of a document or activity but a new one.” Italy at least is at the forefront of this: the first country in Europe to adopt the general obligation of e-invoicing and leader in the digitalisation of processes in many sectors. With specific reference to the electronic invoicing obligation, many more companies than those subject to the obligation have decided to join, as a testimony of a useful judgment that crosses the regulatory obligation.
The introduction of the electronic invoice had a strong impact on the operation of the companies, both for the passive and the active cycle, the Observatory stresses. According to the statistically significant sample • involved in the survey, the main benefits were the process of receiving invoices, indicated by more than half of the companies, such as the faster registration of invoices (indicated by 33% of large
The benefits on the active cycle relate to the reduction of payment times (19% and 14%) and the faster reconciliation of payments (25% and 19%). More benefits for those with adequate technological equipment (e.g. ERP, Supply Chain Management or Administration, Finance and Control software), received by 56% of digital companies versus 51% of non-digital ones.
However, not all companies have felt the benefits of their business processes. At the passive cycle level, just over a quarter of companies claim that they have benefited from no benefits (21% of large companies and 32% of SMEs). On the active cycle, however, SMEs did not receive any benefit from e-invoicing (43% compared to 27% of large companies). Unfortunately, there is also a share of companies that have declared a negative impact on e-invoicing: burdening management activities on the passive cycle (20% of large companies and 18% of SMEs), increasing payment times (15% and 12%) and slower reconciliation of payments (12% and 9%)
For Claudio Rorato, director of the Electronic Billing Observatory & eCommerce B2b, •If it is true that six months are few to really have a sense of the From the possibility of operating on structured and processed data of the passive cycle, improving treasury management, credit management and management control, to the digitisation of internal documentary processes • for example the order cycle – increasing the company efficiency and its competitiveness; What I would like to stress is that we must not stop at the regulatory fulfilment, but look beyond it.
The electronic invoice and the EMIs
The PMS reacted to the introduction of the electronic invoicing obligation by taking the opportunity, including through the redesign of business processes, or by experiencing change as a mere regulatory imposition, limiting themselves to complying with the legal provisions. The Observatory has investigated the main factors that discourage SMEs from taking a digitalisation path and the levers that, on the contrary, have pushed more digital SMEs. The first is often linked to the lack of interest, trust and digital culture of the entrepreneur: failing to perceive the benefits, it sees digitalization as an additional problem to be addressed, both in terms of skills and costs. In non-digital SMEs, it is also clear that there is no long-term design, and that there is a chronic lack of regular organisational control over innovation, which is outside the product sector, and the difficulty of questioning consolidated work processes. In digital SMEs, on the contrary, the entrepreneur looks positively at change, the continuous updating and comparison with other realities allow to perceive new potential benefits for the company and there is a greater attention to training.
Solutions for integration of the supply chain
There are about 150 thousand companies that in 2018 have a digital solution to support their business processes, with a 15% increase compared to the previous year and a 16% increase per year since 2012, when the companies that used digital tools were 60 thousand. Among these 16 thousand are connected via EDI systems (+23% compared to 2017) to exchange the main documents of the order cycle (order, order confirmation, shipping notice and invoice). More than 97% of the related companies belong to five sectors: automotive, household appliances and consumer electronics, pharmaceuticals, large consumption and electrical equipment. The number of documents exchanged grew significantly in the last year, reaching 210 million, an increase of 27% on 2017 and 600% on 2009 (+24% on average annual growth). The most traded document via EDI is the invoice, with 55 million exchanges in 2018, representing 26% of the total of documents processed (+10%). The order, with 15% of the total, the shipping notice, with 23 million and 11.1% of the documents exchanged (+10%), and the confirmations of order, which record the most significant growth, from 3,2 to 8 million documents (+150%, 4% The growth stems from the fact that the more mature companies in the use of these digital tools have intensified the relationships covering also other documents of the cycle, including the logistic ones, that grow of 50%, from 62 to 93 million units.
In decrease, however, the Extranets active in 2018 that support the exchange of documents of the transactional cycle (orders, transport documents, invoices, administrative information), that go from 470 to 372 units (- 21%). 16% also support pre-transitional phase (eProcurement), 8% enable eSupply Chain Collaboration projects, while only 3% of Extranets cover all phases of customer-provider relationship (eProcure) The sector with the highest number of Extranet is metalworking (13%), followed by large consumption and textile clothing (9% respectively), car (8%), logistics (6%), utilities (5%), household appliances and consumer electronics (5%),
Riccardo Mangiaracina, Scientific Manager of the Observatory Electronic Billing & eCommerce B2b, said: • The trend of recent years is to switch from the Extranet • which typically connect In addition to marketplaces, one example is cloud platforms, i.e. software as a Service (SaaS) models where the end user accesses on demand a ready-to-use application, and costs based on actual use of the service. These solutions can also support eProcurement, eSupply Chain Execution and d eSupply Chain Collaboration phases.
Marketplaces are also growing in the B2b segment in recent years. The Observatory has listed 23 of them, which allow Italian and foreign products to be sold in Italy. Not all platforms allow you to make a transaction. About 40% of them support lead generation activities or serve as a product showcase (23%). Multi-sector marketplaces (65% of the platforms surveyed) are the main providers of a wide variety of products, from food to consumer electronics, from clothing to electrical equipment. Marketplaces are predominantly American (35%) or Chinese (18%), but there are also Italian initiatives, which have very different characteristics compared to those of large international operators. The Observatory has identified 7 Italian B2b platforms, of which 2 allow to complete the acquired directly on the platform, while the other 5 enable lead generation activities or function as showcases with the aim of promoting abroad the excellence of food and textiles
The payment instruments mainly used in B2b are digital bank transfers, used by 79% of large companies by 78% of SMEs, and traditional credit transfers, used by 58% of large companies and 38% of SMEs. Remote payment instruments are used in B2b trade for more than half of payments made (67% of large business transactions and 64% of SMEs transactions). The most widespread payment systems among large companies are credit cards (38%), digital Riba (36%) and digital MAV (32%), while SMEs rely more often on digital Riba (35%), traditional Riba (33%) and cheques. Cash is still fairly widespread in both situations, with 19% of large companies using it in 11% of transactions to suppliers and 23% of SMEs using it in 12% of transactions. One large company in four (24%) uses more innovative payment systems (such as l’e-payment, mobile payment, digital wallets, real time payments), compared with 7% of SMEs, but both use these tools in just 10% of the
Innovative payment instruments are most common in companies that adopt Supply Chain Finance (SCF) solutions. Indeed, 38% of large companies and 11% of SMEs using innovative payment instruments also use SCF solutions, compared with 7% of large companies and 6% of SMEs not using such solutions. On the other hand, the spread of cryptocurrencies in B2b transactions, used by only 1% of SMEs and by no large company, but which is of great interest in the future, is still marginal. 28% of large companies plan to use it by next year (4%) or later (24%) and 13% of SMEs also seem to be willing to test this currency, 3% of cases by next year and 10% of cases in the long term. Of the SMEs that used cryptocurrencies, 42% used them in transactions with a utility company, 23% in the automotive sector and 20% in large consumption. The reasons that led to the test of the use of cryptocurrencies compared to other instruments were the higher transaction speed (57%) and the higher security (43%).
AI applied to supply chain
The Observatory has reported 72 cases of application of artificial intelligence in B2b processes and chain reports. In Italy there are 5 active projects, compared with 7 in the United Kingdom, 8 in France and Germany and 21 in the United States. The first sector by number of projects started is large consumption, with almost half of the cases recorded and initiatives in the fields of demand forecasting, stock management, transactions. Automotive (8 projects), logistics and clothing (6) follow. Most of the supply chain artificial intelligence projects concern planning processes (e.g. demand forecasting and stock management) for which companies have a large amount of data available, which can feed artificial intelligence algorithms. In 71% of projects, the data used by algorithms were produced by the company or come from exchanges with partners, while 29% of the data are collected and processed in real time according to needs. The research takes three types of artificial intelligence projects: executive (8%), which concern projects related to the management of documents supporting the cycle of the order; collaborative (28%), which focus on inventory management, supply chain monitoring, planning of the
Blockchain in Digital B2B
The research results also show an increase in blockchain applications in supply chain, with 202 international projects (+54% compared to 2017 census). Most of the initiatives surveyed support eSupply Chain Control processes (40%), where the goal is to exploit the chain of blocks to better track the goods and have better control of the supply chain, and eSupply Chain Execution (36% Following the eSupply Chain Collaboration (13%), where the primary objective is to review existing processes and create new procedures, the eProcurement (6%), where the block chain serves to strengthen the search phase of new suppliers The sectors most affected by blockchain projects are large consumption (22%), finance (19%) and logistics (16%). Two thirds of the projects surveyed are in Asia (34%) and Europe (33%), a quarter in America (25%) a minority in Oceania (6%) and Africa (2%). The United States is the nation hosting the highest number of initiatives (40), followed by China (17), Japan (12), United Kingdom (12), Italy (12) and Australia (11). Most projects are still being announced (45%) or tested (43%), while the cases already in operation are 25, especially in finance (9 projects) and in large consumption (6).
On the electronic billing topic, you may be interested in the article . e-invoice, as it changes: all clarifications of the Revenue Agency, which you can read at this link.