E-invoicing for SMBs is a growing market
Significant global e-commerce growth coupled with an increase in e‑invoicing government mandates¹ is driving a global shift towards e‑invoicing in the SMB market.
Global e-invoicing revenue projections¹
CAGR¹ 20.7%
Projected market size (projected by 2027)¹
E‑invoicing can help SMBs save time and money, increase efficiency, improve customer relations and ensure more secure record keeping.
Motivated by a desire to increase government transparency and decrease tax fraud, many countries — especially in LAC and the EU — have implemented new regulatory frameworks and e-invoicing mandates. Given that tax revenues account can for about 35% of a country’s gross domestic product (GDP), in many countries, reducing the tax gap can be essential to maintaining healthy economic growth.²
While most mandates are targeted at large corporate enterprises, small and medium-sized businesses (SMBs) may still be expected to comply which can lead many SMBs to struggle with regulatory compliance. Financial institutions (FIs) that offer SMB business services may want to consider incorporating an e‑invoicing solution into their portfolio to help SMBs stay ahead of regulatory demands. With so many solutions to choose from, many SMBs will likely need support to fully realize the benefits of today’s digital-first marketplace. Financial institutions that can help SMBs find the right path to digitalization will be able to differentiate themselves from competitors — and they may be able to gain a first-mover advantage in this fast-growing marketplace.
Many SMBs want to digitalize their invoicing systems, but need guidance and support from a trusted business partner
More than 70% of surveyed SMBs still use paper invoices and manual processes, but 64% indicate that they are looking to transition to e‑invoices.¹ In addition to adding difficulty to the process of complying with ever-evolving regulatory mandates, using traditional paper methodologies can also create challenges around inefficient resource management, cash flow uncertainty, the costs of paper invoicing and late payments, auditing issues due to manual reconciliation and reporting, human error and fraud risk.
E‑invoicing addresses many of these issues, and can help SMBs save time and money, increase efficiency, improve customer relations and ensure more secure record keeping.
Despite the many benefits, a recent study found that top FIs were not prioritizing e‑invoicing products for SMBs in B2B markets. Furthermore, in North America, where e‑invoicing adoption is being driven by SMBs’ desire for efficiency rather than regulatory mandates, only 25% of invoices are e‑invoices.¹ These gaps present an opportunity for FIs to deliver customized solutions that fit the needs of SMBs.
E‑invoicing providers are expanding services and developing novel solutions for SMBs
Recognizing this opportunity, some FIs have expanded their product offerings beyond their traditional silos to deliver the solutions that SMBs are looking for. Novel digital solutions for sourcing, contracting, payments, reconciliation and financing can help SMBs centralize their invoicing ecosystems, automate their operations, reduce errors and minimize risk.
E‑invoicing services can be bundled with electronic bill presentment and integrated payments solutions, which can help increase efficiency, transparency and security.
As more countries adopt e-invoicing mandates and more SMBs move towards digitalization, the e‑invoicing market will continue to present opportunities for FIs to design SMB-specific solutions, drive growth and increase revenue.
To learn more about how your organization can leverage the global e‑invoicing trend to help drive SMB growth, contact your Visa account executive.
ACCELERATING GROWTH
Ripe opportunity: embedded finance in agriculture ➔
Key global digitalization trends for SMBs ➔
E-invoicing for SMBs is a growing market ➔
AI in the financial industry ➔
Powering small and medium-sized businesses (SMBs) in the digital-first world ➔
Visa's travel predictions for 2023 ➔
White paper: Facilitating a new era in spend management ➔
Securing the payments ecosystem ➔
High-spending SMEs - an opportunity uncovered ➔
Fulfilling the potential of commercial cards in Central Europe, the Middle East, and Africa ➔
Are small businesses weathering the storm? ➔
Sources:
- “Visa: Global SMB EInvoicing Country Scan,” Korefusion, 2023
- “Tax revenue (% of GDP),” The World Bank, 2022
FEATURED CONTENT
©Copyright 2024. All Rights Reserved. All brand names, logos and/or trademarks are the property of their respective owners.