In the first of three guest blogs, Emmanouil Schizas, Senior Economic Analyst at the Association of Chartered Certified Accountants (ACCA), and a participant of the statistics working group for the European Multi-stakeholder Forum (EMSF) on e-Invoicing, describes how ACCA, the UK banks and their partners are helping address the lack of meaningful national data on the take-up of electronic invoicing.
Historically, the state of national statistics among EU member states on e-Invoicing adoption has been woeful. We can cite Eurostat data, for example, on which countries are ahead of the game in terms of the percentage of businesses sending or receiving electronic invoices, but they are meaningless without context. Our level of understanding of e-Invoicing adoption among small-to-medium-sized enterprises (SMEs) in the UK however, could be about to change.
A half-painted picture
Eurostat (the statistical office of the EU) provides some insight into how many businesses in the UK, Ireland or other EU countries send customers fully automated electronic invoices. It doesn’t, however, record the amount of money involved; whether e-Invoicing is being triggered by major customers mandating its use; or if there is a link to businesses’ ability to access finance.
This is not a criticism of Eurostat; with a broad focus on technology adoption in business its survey considers e-Invoicing as another business tool (see the questionnaire here). This is not a bad approach but it is not the right lens to understand how policy or industry practice can increase adoption.
Setting up a statistics working group
The European Commission identified this dearth of statistics as a problem and asked the EMSF to improve what we know about how widespread e-Invoicing is in the EU so that policies could be evaluated against their outcomes. The result was the creation of a working party on e-Invoicing statistics. The group agreed that, while the Eurostat figures were incomplete, other highly respected sources of data had their own limitations. Some were proprietary and collated in a rigorous but essentially ad-hoc manner; others used such different metrics from each other that they were irreconcilable.
In theory, service providers are sitting on tons of information about the e-invoices they handle, the clients they serve and the supply chains they are part of, but this information is commercially sensitive and aligned to business needs, not statistical reporting and policy needs.
The working party therefore opted to collect what information it could (see its interim report here) and ask the Commission to outsource the enormous task of reconciling the evidence. This, however, could take years.
Knowing this, some members also looked for existing large surveys in their countries where we could add e-Invoicing-specific questions. In the UK, the quarterly SME Finance Monitor of 5,000 small-and-medium-sized businesses, produced by BDRC Continental for the British Banking Association’s Business Banking Taskforce, was an ideal opportunity.
The survey carries a high degree of credibility among industry bodies, banks and the government, and also gives us information on a wide range of business characteristics and behaviours that can be associated with e-Invoicing adoption. The data could also help us make the case for e-Invoicing as a way to help SMEs access finance. A great deal of lobbying and policy work is already based on this data.
The results are in
We have received and analysed the results from the SME Finance Monitor from Q2 and Q3 2012. While it’s still early days, it is clear that the quality of this information is beginning to fill some holes in our understanding of e-Invoicing take-up among SMEs in the UK.
The results will identify the characteristics of companies most likely to adopt e-Invoicing, help test the relationship between e-Invoicing and improved access to finance, and – given the fetish that policymakers have for numbers – be invaluable when trying to influence government and policy makers to encourage further the use of e-Invoicing.
I will explore these areas in more detail in my following posts.