Business Management

Nigel Taylor (Global) - What Will It Take to Get CFOs and CIOs Talking?

CFOs and CIOs have long been used to presiding over their own separate domains, but with IT continuing to integrate with every area of business it's becoming ever more important for them to work closely together.

The rise of electronic invoicing is one of the many factors driving this need for collaboration. An increasing number of companies are cutting out the paper trail in favour of faster and more reliable electronic systems, and global invoice volumes have seen an increase of 20% in the last year alone.
As the role eInvoicing plays in maintaining an efficient supply chain grows, CFOs are being increasingly called upon to manage information and technology that would normally have been reserved for the CIO. But how can CFOs work with CIOs and IT to ensure that Finance has the right electronic invoicing system in place for the benefit of the entire business?

Electronic invoicing is already firmly on the Finance team's agenda as it offers multiple cost savings and process efficiencies for payables, receivables and treasury teams. But in many cases, the Finance department is unaware of other electronic transactions elsewhere within the business. Electronic Data Interchange (EDI) has been a staple of business-to-business (B2B) transactions for over 30 years, but when it comes to electronic invoicing, this proven model seems to be overlooked by Finance.
Many companies have conducted eInvoicing via EDI for years, however, now they have the opportunity to include country-specific tax compliance rules and work with more of their customers and suppliers who have had little exposure to the same transactional technology.

With the continued burden of processing paper invoices, Finance teams often take matters into their own hands by driving their own electronic invoicing initiatives and excluding supply chain and IT teams. However, since 2001, VAT rules for eInvoicing have mapped out how paper can be removed from the invoicing process. In 2006, more EU rules were set out for validation, authenticity, integrity and archiving, meaning that EDI can provide a completely compliant framework for the invoicing process. The question of whether Finance teams need a separate eInvoicing framework is a valid one to ask. And, it would appear they don't.

We believe it is up to the CIO to ensure their CFO is fully aware of their company's B2B capabilities. Modern EDI mirrors what is thought of as ‘eInvoicing', providing similar functionality through web-forms and community portals while retaining its core integration strengths. It is cost-effective and can be scaled starting simply with suppliers submitting invoices online. Most B2B eCommerce initiatives reflect the truly global nature of companies today, working across multiple geographic and legislative boundaries. Why would the CFO engage in an introspective initiative if they were made aware of the capabilities of its own supply chain team?

B2B eCommerce (and EDI) is a mature, secure data processing concept and an inexpensive method of B2B communication that can handle large volumes of automated information. More importantly, many finance teams are already involved in electronic purchase requests and purchase order processes so why not eInvoices in the same way?

With eInvoicing volumes continuing to increase, it's time for CFOs and CIOs to sit at the same table and discuss securing the true benefits of existing B2B capabilities and transaction management. Now is also the chance for the IT department in particular to shine as it demonstrates its value within the business and gets more vocal in explaining how CFOs can effectively harness an eInvoicing programme. Active collaboration between the IT and finance departments will soon see companies realising the rewards.

By Nigel Taylor, Marketing Director, Head of e-Invoicing Solutions, EMEA at GXS


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