03.08.2018

Give Your Bookkeeper Finance-Director Powers

As e-invoices enjoy wider use, the fintech company Fitek sees bookkeepers dealing with bigger financial issues for companies, rather than just inputting purchase invoices.

by Karl-Eric Schneider, Fitek Managing Director

Sixty million invoices are sent and received in Estonia each year, the lion’s share sent as a file in an email. Under 10% are handled as machine-processed e-invoices.

The transaction revolution attracts us for different reasons. In Finland, machine-processed invoices are used by 70% of businesses. The private sector is showing interest in e-invoicing, and awareness is growing thanks to the nation’s reputation as an e-state.

The answer to “Why e-invoices?” is significant growth in the speed of transactions and the attendant benefit of saving hours of labor, not simply minutes. Additionally, invoices are no longer lost and fraud is reduced. The European Union Directive 2014/55/EL prescribes that at the end of November of this year, all businesses engaged in state tenders must be ready for e-invoicing.

The gain from e-invoices in terms of cost- and time savings is not always immediately apparent to those in the industry. Many businesses are of the opinion that they already have bookkeepers or a bookkeeping firm in place, which are compensated for their work. And there is comfort in these current roles where a company’s transactions happen – so why should we change?

The answer is largely rooted in making the entrepreneur’s life easier. The entrepreneur wants to receive payment for his goods or services in a timely manner. When both parties to a transaction are able to see all active invoices in their smart phones or computer screens, regardless of a party’s geographic, the transactions process becomes faster, and the money theoretically moves faster. Additionally, transactions are transparent: it’s easy to see when, how much, and to whom we must pay.

It sometimes seems that bookkeepers themselves dread e-invoices, since they reduce their amount of routine labor and, as a result, their incomes. But several years ago at a conference we learned the very opposite from bookkeepers: a full 66% of respondents said they were very ready to give up the manual input of purchase invoices, especially when their salaries are not reduced.

E-transactions embolden bookkeepers: life is improved without routine manual labor life and more time is made available for the consideration of financial topics. Bookkeepers, in effect, are promoted to Finance Director status.

We could surely more interest the private sector with e-invoices if the state would take the lead. Examples are Denmark and Norway where e-invoices enjoy great popularity. In Denmark, e-transactions have been required between businesses and the state since 2005. The deadline for when the law will go into effect requiring those doing business with the Estonian state to present e-invoices has been delayed several times. We hope that the law will come into effect in the near future. The European Union’s vision is that by 2020 transactions will mainly be machine-processed e-invoices.

The Estonian Tax Authority requiring the declaration of purchase invoices over 1,000 euros has been a positive move. But they could have taken it one step further: they could have also required the use of e-invoices.

Fitek is a member of international organizations dealing with transactions like EESPA and PEPPOL, which advocate a European standard for e-invoices. These organizations have influenced transactions significantly. Already we are able to exchange machine-processed e-invoices across Europe.

The near future will bring more automatization to the field. For example, invoices for regular expenses like rent, auto leasing, and internet services can be received and paid automatically, because they arrive regularly and the amounts are consistent. Also, invoices can be assigned a three-attribute status, and if they match they are automatically paid.

In the longer-term future we will see fully-automated transactions, with bookkeeping software capable of sending and receiving invoices. It may even happen that a human operator is no longer needed anywhere in the system.

Fitek, the Baltic and European fintech- and e-invoice solutions provider, has expanded to the UK market. The company is registered and its first employees are at work.

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Kertu Roosimägi became the new Sales Invoice Product Manager of financial technology company Fitek Estonia. She has been engaged in accounting for 9 years and encourages companies to use e-invoices because this makes the financial work processes more convenient and saves a lot of time.

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The financial service automator and fintech company Fitek Group has purchased 50% of the Serbian business New Image, which offers e-invoicing and digital printing solutions in Serbia and Bosnia and Herzegovina. The business will operate in new markets under the Fitek name.

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