Senders or Receivers? - Peppol's 'Chicken or Egg'​ challenge

By Kris Elliott

Every day I speak with organisations who are keen to learn more about Peppol e-invoicing.  More often than not their initial interest is being driven by a desire to connect to Peppol to receive e-invoices from their suppliers. 

Putting aside for the moment that Peppol is about more than just the e-invoice and encompasses a full range of e-procurement document types, this often one-sided approach to e-invoicing adoption does create a 'chicken or egg’ challenge of which comes first.

In order to receive an e-invoice your supplier first has to send one, but for them to want to send one their customers must be enabled to receive them.  So, which comes first - the senders or the receivers? 

While not diminishing the desire to change, this challenge adds a degree of uncertainty around timing with some of the more cautious adopters opting to wait until an undefined amount of ‘more volume’ starts occurring before committing to that change.

This uncertainty is being fuelled by some of the industry naysayers who, despite government endorsements/mandates and global examples of success, doubt e-invoicing will become the norm anytime soon. 

Perhaps because they can’t see the starting point, or perhaps because they only deal with one side of a transaction (e.g.: AP Automation but not AR Automation, or vice versa), nevertheless they can’t see the initial catalyst for change that drives the early adoption.  In an ironically self-fulling prophecy, they then become a barrier to the change which they doubt is going to happen. 

However, I would argue that we need to stop considering e-invoicing in the context of being just an Accounts Payable or an Accounts Receivable project and start framing it as an element of a Digital Transformation project that addresses both (although rarely is it a project by itself, independent from other finance-related processes & solutions). 

As an organisation, an invoice is conceptually the same document type regardless of whether you are the sender or the receiver.  Therefore, when considering the adoption of e-invoicing you ought to be considering both how you send them as well as how you can receive them. 

If you are suggesting your trading partners to adapt their systems to accommodate your processes, then there ought to be some level of digital reciprocity whereby you adapt yours for them. 

Granted you don’t necessarily have bi-direction trade with all vendors and there is an element of ‘paying it forward’, however it is selfish to expect others to change for you without also considering how you can also help others with their changes. If we've learned nothing else from 2020, it’s that we are all in this together.

The common approach for many e-invoicing projects, particularly the ones focusing on AP Automation, is for the Peppol Access Point vendors to talk to their potential clients about Supply Chain Enablement.  Basically, it’s a commitment to go out and encourage a client’s suppliers to start sending e-invoices for the betterment of the client. 

However, they quickly encounter a new problem which is that unless the client is a government agency, the supplier being asked to become a sender lacks the incentive to make changes. 

But the real problem isn’t one of incentive, it’s one of perspective. This approach to supply chain enablement is very one-sided whereby the one client is at the centre of a network of transactions.   

Just as I already mentioned how we need to consider both sending and receiving at the same time, we also need to consider the needs of those trading partners as well as those of the original client.

Access Point vendors need to widen their vision and stop thinking in terms of ‘How can I get that supplier to send e-invoices to my client’ and start thinking in terms of ‘How can I help that supplier transact with all of their trading partners, including my client, to both send and receive e-invoices for their own benefit’.

Change is happening now.  Organisations are adopting e-invoicing now.  Transactions are beginning to flow across the Peppol network.  I know this not because of a report or a personal prediction of what I think is going to happen.  I know this because we are seeing it. 

I know this because Storecove is an Access Point Provider and we are connecting organisations, partners, software vendors and government organisations to Peppol.  This isn’t to say the e-invoicing market is perfect because it’s not.  There will be a critical mass point where e-invoicing becomes the norm and I accept that this point isn’t here quite yet.  But let’s not let the perfect be the enemy of the good.

I’d like to close this out with a quote I’m fond of by Bernard Shaw:

“People who say it cannot be done should not interrupt those who are doing it”

The adoption of Peppol e-invoicing is happening now.  You can either lead the change or be forced to react to it once it happens. Now is the time that you need to choose whether you want to either listen to those that say it can’t be done, or listen to those that are doing it.

Kris Elliott is Sales Manager – AUS/NZ at Storecove.