There is a considerable shift happening across the globe right now as governments and tax authorities are embracing e-invoicing as a method of ensuring the accuracy of transactional data. An $11.2 billion dollar market in 2022, e-invoicing is expected to reach $35.9 billion by 2028. [source: ResearchAndMarkets]
There is a simple reason for this. Governments don’t trust your data and I’m here to tell you that as a business leader, you should be questioning the validity of it too. The fact that the data that comprises your systems of record can no longer stand up to government scrutiny is a concern. Not only in your ability to remain compliant and its associated risks. But this is also the same information you are basing critical business decisions upon.
Now you might say, Kevin, you are the CEO of a tax and compliance company, of course you are taking this position. Guilty. However, I’ve also been a senior leader and multiple time CEO at a number of other companies and can tell you that e-invoicing offers something that I would have paid almost anything for over the course of my career. Completely subjective, unfiltered information.
Businesses run on systems and people. One of these is incapable of being objective. Through both conscious and unconscious bias data is constantly being manipulated. Each time it is moved along the chain and into the next system, there is a filter being applied. Tax authorities figured this out and through e-invoicing, have replaced subjectivity for objectivity and its saving them billions.
Now, lets apply this same principle to your business. As a leader, how confident are you that your corporate data is completely subjective and accurate? We know from a survey earlier this year that almost 40% of CFOs worldwide do not completely trust the accuracy of their organization’s financial data. [source: Journal of Accountancy] So how do you make critical decisions based on data you aren’t sure about? What if, just like the tax authority, you could remove the subjectivity and have data at your disposal that represented the unvarnished truth. Think your decisions might look different?
I am fully aware that compliance is not a topic that gets executives excited. However, historically, its also been one of the proven ways of uncovering insights into your own organization that would not have been possible otherwise. I remember going through the implementation of Sarbanes-Oxley way back in the early 2000s and all the calls that it would cripple organizations financially. However, a funny thing happened, we began to learn things that enabled us to build efficiencies of scale previously thought impossible. Fast forward 20 years and we are seeing the same cycle repeated with e-invoicing.
To learn more about the details of the global transition to e-invoice and the complexities involved, I highly recommend you read, The Truth is in the Transaction: How the E-Invoice Ties the Global Economy Together by Christiaan Van Der Valk. Christiaan is one of the foremost experts in the world on this and his insights are invaluable.
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When you are ready to think about a global solution for your e-invoicing, talk to Sovos.
