Electronic Invoicing | Netsend http://netsend.com e-invoicing and e-billing solutions for business Wed, 14 Mar 2018 17:44:50 +0000 en-GB hourly 1 http://netsend.com/wp-content/uploads/2016/10/cropped-Netsend_Stacked_CMYK_square-1-32x32.png Electronic Invoicing | Netsend http://netsend.com 32 32 Auditing and audit trail for e-invoicing and document distribution http://netsend.com/blog/auditing/auditing-audit-trail-e-invoicing-document-distribution/ Wed, 21 Feb 2018 11:15:18 +0000 http://netsend.com/?p=3534 Auditing in Accounts Receivable used to be a painful process, as it can still be for many businesses.  However, with the advent of e-invoicing this needn’t be the case.  Electronic documents, such as e-invoices, can be searched for and found programmatically – saving hours of rifling through filing cabinets. Since the 1st January 2013, the […]

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Auditing in Accounts Receivable used to be a painful process, as it can still be for many businesses.  However, with the advent of e-invoicing this needn’t be the case.  Electronic documents, such as e-invoices, can be searched for and found programmatically – saving hours of rifling through filing cabinets.

Since the 1st January 2013, the European Council Directive requires all EU members to afford the same legal status to electronic invoice processes as they do paper invoice processes.  As a result of this, e-invoices must have associated data guaranteeing the authenticity of the origin, integrity of the content and legibility of the invoice made accessible for auditing purposes.

Electronic invoicing systems are also required, by EU law, to store e-invoices in their original format, as well as an associated human-readable format if the original is purely machine-readable.

The consequence of these requirements is that electronic invoicing systems provide easy access to e-invoicing, invoicing histories and associated documents – typically enabling large-scale extraction and presentation of records for auditing purposes.

When electronic invoicing is done well, there should be full traceability of communication flow and engagement from customers with communications and associated invoicing processes.  Every point of contact and system engagement should leave an trace that can be used to determine the status of payment and/or awareness of payment requirements – supporting associated AR actions to bring the cash in to the business, and auditing this process.


Easy risk assessment for auditing requirements

e-invoicing systems enable the following risk assessments to be easily met and even automated.  Reporting on the scenarios below ensures accounts receivable are managed in an optimal fashion and no nasty surprises come to light through the auditing process.

  • Checking for receivables that do not exist
  • Checking for inaccurate receivable balances
  • Identifying incorrectly recognized revenue
  • Identifying collection problems with accounts receivable
  • Checking allowance for doubtful accounts reflects previous bad debt experience
  • Checking for sales transactions not processed in the correct periods


Beyond the audit trail – real-time visibility of invoicing progress

The benefits of e-invoicing in facilitating audit processes is clear, but audits should hopefully be few and far between.  A related benefit, more valuable in a day-to-day context, is the ability to have a real-time view of invoicing (and payment) processes.

Leading e-invoicing platforms, such as Netsend, emphasise the use of pull communications (rather than push communications) – meaning that customers are encouraged to click through from communications to an online portal to find their invoicing information.  This enables users to be tracked as they access their invoicing information and take any actions via the portal – e.g. acknowledging receipt of invoice, intention to pay or payment.

This online tracking provides AR departments and credit controllers that ability to quickly identify the status of specific invoices and accounts.  This real-time information can feed into management dashboards and be used to both track and improve business cash flow.


Audit trail for document distribution

It’s not just invoicing that can benefit from improvements in tracking and visibility.  Document distribution is becoming increasingly electronic in nature, even for business critical and legally sensitive documents.  With the advent of trust services, defined in the recent eIDAS regulation, more and more legal documents such as contracts are sent electronically; as there can be complete trust in recipient authenticity and content integrity.  This presents and opportunity for businesses who distribute their documents electronically to track receipt and engagement, in much the same way as e-invoicing systems do.

With systems designed to track and record which documents were sent to whom, when, and were engaged with in what specific way, this provides a detailed audit trail for sensitive documents.

Whether businesses need to meet compliance requirements of Sarbanes-Oxley, or other mandates to preserve records and interactions for a number of years, electronic records are a far easier format to store both documents and map the relation between these and communications involving them.


Why wait for an audit – turn communication insight into competitive advantage

Whilst e-invoicing and electronic document distribution enable ease of auditing, the insight they can provide is far more valuable for day-to-day business advantage.  Understanding the status of each invoice in the collections process, provides an unparalleled handle on cash flow into the business.  Where anomalies occur, these can be acted on immediately – even automatically.

Document distribution can also provide analytical insights to improve responses and reduce the requirement for exception handling by staff.  With the advent of robotic process automation, and indeed artificial intelligence as part of such systems, manual exception handling can be learned from to improve the scope of automated responses.

Whether communications directly affect cash flow or service delivery, or form part of the broader customer communication remit, knowing whether they have been received and the status of response provides valuable and actionable insight.

In high-churn markets, it’s critical to respond to delays or blockages in customer communications, or risk losing business.  Managing document distribution electronically, and automating where possible, presents competitive advantage in this regard.

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Blockchain in Accounts Receivable http://netsend.com/blog/blockchain-accounts-receivable/ Mon, 22 Jan 2018 09:24:28 +0000 http://netsend.com/?p=3523 The post Blockchain in Accounts Receivable appeared first on Netsend.


Whilst blockchain technology is most often associated with cryptocurrency (e.g. Bitcoin), there are enormous opportunities for this across the business.  One such potential application is within the Accounts Receivable department, as part of the e-invoicing process.

Currently, invoices are sent (either electronically, or by post) before they are reconciled against POs and purchasing systems data, and then paid – each step requiring approval and review, which slows the process down.  Whilst electronic invoicing enables swift, often automated, delivery of invoices and payment processing is becoming increasingly automated, there are still opportunities to improve speed and accuracy.

Blockchain-enabled e-invoicing can provide greater transparency of what has been invoiced and the progress of payments, as well as preserving an immutable record of previous transactions and enhancements in both speed and security of the invoicing process.

In order to understand the benefits of blockchain in Accounts Receivable processes, it is first important to understand the basic principles of blockchain technology.

“Blockchain-enabled e-invoicing can provide greater transparency of what has been involved”

What is Blockchain?

Blockchain technology gets its name from its structure.  It is a chain of blocks, where each block of information (typically transactions) is created in a way that checks the validity of the previous block and consequently all proceeding blocks in the chain.

Blockchain technology is typically used to enable distributed ledger books.  In such a case, each block would consist of the latest set of transaction records, and the chain would contain all transactions to date on the ledger.

Various approaches to ‘mining’ blocks and verifying the validity of the proceeding block and entire chain exist.  The overarching principle, and benefits, of this are universal however; the validation and visibility of the ledger is decentralised and therefore more secure against both attack and loss of availability.

For a more detailed explanation of blockchain technology, take a look at our Blockchain Technology FAQ document.

How can blockchain work in AR

The positive disruptive potential from blockchain in Account Receivable is enormous.  Transactions could exist pre-approved on a blockchain (from point of purchase) with the necessary information to ensure they are processed automatically when reaching Accounts Payable.  The shared access to a blockchain between Accounts Receivable (at a supplier) and Accounts Payable (at a buyer) removes the need to generate individual invoices – electronic or otherwise.  The Procure-to-Pay (P2P) process then becomes seamlessly supported from ordering through to invoicing and payment via access to a shared blockchain that is updated in near real-time between parties.

Access to a shared blockchain enables business partners to remove, or at least reduce, the need to pause for human validation and approval of agreed transactions.  This achieves faster transaction processing, leading to improved cashflow, an important goal for any Accounts Receivable department.

“Shared access to a blockchain between Accounts Receivable and Accounts Payable removes the need to generate individual invoices”

Realistically, not all invoices are going to be replaced by access to a shared blockchain any time soon.  But businesses who are quick to adopt blockchain as an integral part of their P2P process stand to benefit.  AR teams who can offer blockchain to support the invoicing process are creating competitive advantage through innovation.  However, thought needs to be given to how blockchain will sit alongside traditional paper invoicing and e-invoicing.

The most effective way to leverage fast-evolving business technology is typically through working with an expert service provider, or hooking into an as-a-Service solution.  Leading e-invoicing providers, such as Netsend, are well placed to support businesses seeking to integrate traditional invoicing, e-invoicing and blockchain as one service– enabling customers to progress from one format to another, as well as recording, managing and reporting on transactions from a centralised solution interface.

What is preventing the adoption of blockchain for AR?

The biggest barrier to blockchain adoption is corporate inertia and the fear of change.  Very often businesses will have embraced digital processes throughout much of the business, yet still produce and deliver paper invoices.  Due to the sensitive nature of invoices – integral to business cashflow – there is an inherent reluctance to modify invoicing processes.

“77% from the financial services industry expect to adopt blockchain as part of an in-production system or process by 2020”

However, channel shift is one of the most important topics in business.  Businesses need to seek out expert partners to facilitate moving from old ways to the new.  Kevin Gill, Insurance and Blockchain CTO, at IBM warns that “traditionalists face the threat of becoming irrelevant if they don’t move first”.  Kevin goes on to explain that “There is tremendous potential for change and disruption. The winners are going to be those who are blockchain-enabled quickly. The earlier you are in, the greater your competitive business advantage”.

These sentiments are supported by the Global FinTech Report 2017 from PriceWaterhouseCoopers, they report that 77% of survey respondents from the financial services industry expected “to adopt blockchain as part of an in-production system or process by 2020.”

How to prepare for the blockchain revolution

Whilst we wouldn’t recommend investing in a whole new team to identify and implement blockchain solutions just yet, it’s important to prepare for the future.  Talk to us today and find out how Netsend can enable your Accounts Receivable department to support invoicing in a vast range of formats and standards, including blockchain when this becomes relevant to your market.

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eIDAS and Changes to Electronic Signature Legislation http://netsend.com/blog/eidas-changes-electronic-signature-legislation/ Thu, 11 Jan 2018 11:36:45 +0000 http://netsend.com/?p=3494 The post eIDAS and Changes to Electronic Signature Legislation appeared first on Netsend.


Electronic signatures are widely used by businesses today.  It’s remarkable to think that they were only granted the same legal weight as their ‘wet ink’ counterparts from 1st July 2016 (in Europe).  Legislation around electronic signatures and associated ‘trust services’ continues to evolve, with the eIDAS (electronic IDentification, Authentication and trust Services) Regulation – Regulation (EU) No 910/2014 of the European Parliament and of the Council – providing an update to legislation across the EU.

The new eIDAS regulation has consolidated and replaced a confusing patchwork of laws pertaining to electronic signatures, making them consistent across every EU country.  With electronic signatures used to sign international documents, the eIDAS regulation ensures all parties produce and receive signatures that are legally binding.

eIDAS updates the original Electronic Signatures Directive (Directive 1999/93/EC), setting out a legal framework to enable mutual recognition of electronic identification systems between Member States, and establishes trust services that can be used to support, or in place of, electronic signatures.

For a more detailed explanation of how eIDAS changes existing legislation, take a look at our Trust Services for Electronic Documents white paper.  This blog post explains some of the key points to consider.

“The new eIDAS regulation replaces previous electronic signature laws and is now consistent across every EU country”


eIDAS Changes to Electronic Signatures

Previously, electronic signatures could be used by both individuals and by corporate organisations.  eIDAS updates this to make a distinction between natural and legal persons, requiring that an electronic signature relates to an individual – not an organisation – henceforth.  This change switches the onus on to individual responsibility, ensuring greater awareness of the legal responsibility of those applying signatures as part of automated processes.


eIDAS Changes to Advanced Electronic Signatures

eIDAS redefines Advanced Electronic Signatures to allow for mobile technology to form part of the identification and authorisation process – through connection to a Certificate Authority for the issuance of a digital certificate.


eIDAS Changes to Qualified Electronic Signatures

Qualified Electronic Signatures (QES) are an extension of the concept of Advanced Electronic Signatures.  QES are only possible to create from a qualified electronic signature creation device (SSCD) – which must store the signature creation data.  Such a device is qualified by issuance of a Qualified Certificate, from a qualified trust service provider.  In turn, a qualified trust service provider is granted such status by the Supervisory Body.

The electronic signature creation device provides a level of security above and beyond an Advanced Electronic Signature, which is appropriate in certain scenarios.


What are Trust Services?

Trust services are introduced, as a concept, via eIDAS to provide additional routes to verify integrity of document content and sender.  eIDAS sets out a legislative framework to put these services into practice in the EU.

Electronic Seals

As part of these changes, eIDAS introduces the concept of electronic seals.  Electronic seals are similar to electronic signatures, but only available to legal persons (rather than natural persons) – such as corporate entities.  These provide a route for corporate entity to apply a stamp of authentication to a document, without the fine-grained individual responsibility implicit in an electronic signature.

As the name suggests, an electronic seal works a little like its traditional, physical, counterpart.  The seal guarantees that the contents of the document has not been tampered with, as well as guaranteeing the authenticity of the sender.

Time Stamps

Time stamps are used to verify that the data contained in the document existed, and remains unchanged from, the data at the time and date of the stamp.  This is particularly useful to anchor documents, such as contracts or bills, to a time and date.

Delivery Service

The Electronic registered delivery service prevents risk of loss, theft, leakage or alteration of documents being sent from one party to another.  The service also provides evidence of receipt and proof of delivery.

Website Authentication

Website authentication, by way of electronic certificate added to the site, validates the authenticity of the site and link to entity or person(s) owning the site.


The Business Benefits of eIDAS

In the competitive and fast-paced world of business, capitalising on changing legislation provides a competitive edge.  Working with an expert partner, such as Netsend, enables your business to quickly offer the benefits of trust services and the full range of electronic signature types to your customers.

Whether incorporating the latest changes from eIDAS within internal document distribution processes, or as a way to improve security and assurance with partners and customers, these recent changes make document transactions more secure than ever before.

Move beyond the benefits of simple electronic signatures and turn trust services to your business advantage.

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How to beat the Christmas Post (with electronic delivery) http://netsend.com/blog/beat-christmas-post-electronic-delivery/ Wed, 13 Dec 2017 16:15:03 +0000 http://netsend.com/?p=2257 It’s the time of year to be jolly… but actually, when you’re trying to get important documents over to clients, you might be feeling a little less jolly.  The infamous Christmas Post has a lot to answer for.  As millions of cards and presents enter the system for just a few weeks, this throws delivery […]

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It’s the time of year to be jolly… but actually, when you’re trying to get important documents over to clients, you might be feeling a little less jolly.  The infamous Christmas Post has a lot to answer for.  As millions of cards and presents enter the system for just a few weeks, this throws delivery timescales into disarray.

Have you ever tried to get a document to a client urgently on the lead up to Christmas?  What normally takes a couple of days can take weeks.  That level of uncertainty and delay is a problem when waiting for signed documents, and can lead to significant cashflow impact when invoices and payments are directly affected.

With the volume of post increasing massively on the lead up to Christmas (up to 10 million parcels per day at its peak), it’s simply too much for the infrastructure to handle effectively.  This resulted in 4.8 million reported delivery problems over the Xmas period in 2015.  Last year saw £148 million worth of lost or damaged post this Christmas in the UK. And according to Citizens Advice, online shoppers will typically spend two-and-a-half hours sorting out a delivery problem this Christmas – because an item is late, turns up broken or doesn’t arrive at all.

In a survey carried out in December 2016, more than one in five had a parcel go missing*

A third of consumers who receive a damaged parcel don’t take action. For those that did try to complain, more than 40 per cent ran into problems – such as difficulty contacting the retailer or delivery company on the phone.

So, how can you avoid this as a business?

Electronic Document Distribution – for reliability and speed of delivery

As every Christmas shopper knows, the online world is without the queues and traffic of the high-street.  This is also one of the attractions of electronic document distribution, enabling businesses to send documents swiftly and securely irrespective of season.

Furthermore, electronic documents can be produced and sent automatically.  The paradigm of accounts receivable automation has sprung up in response to the demand for more streamlined and cost effective ways to generate and distribute invoices and other AR documents.

In the context of the accounts receivable department, electronic invoicing is growing at a rate of 20% year on year globally.  It’s not hard to see why, when you consider the value of getting invoices out quickly, as this brings the cash into the business sooner; Christmas post, or not.

Know when your documents arrive

Beyond the simple ability to avoid postal traffic, electronic document distribution systems, such as Netsend, afford the sender insight into how the document distribution is progressing at every step of the journey.  There is enormous value in determining who has actually received time-sensitive documents, and even whether they have opened them and, where appropriate, agreed to the content.

With an electronic document distribution system, it’s possible to see at a glance who has not yet responded to documents.  Reports can be generated for direct follow-up, or statements and/or dunning letters can be generated automatically to nudge slow-responders into action.

You’re not just saving time, but saving money too

Electronic documents are not just the fastest and most secure way to ensure business documents are delivered, they also present a significant cost saving.  Reducing the reliance on print and postage for the distribution of business documents brings paper, stamp and printing costs down considerably.

Many businesses go as far as outsourcing the remaining print and postal requirements to be handled through a single document distribution solution, such as Netsend.  This simplifies the process of distribution, as documents are directed to the distribution system and then either sent electronically (in most instances), or automatically printed and posted for recipients who are yet to convert to accepting electronic format documents.

Save throughout the year and be ready for next Christmas

Businesses making the most effective deployments of electronic document distribution are committed to onboarding as many customers to the new process as possible.  When you consider the average saving of €6.60 per invoice sent electronically, rather than by post, it’s clear that efforts to convert recipients are highly valuable.

At Netsend, we achieve an average conversion of over 80% within 6 months.  The industry standard sits a little lower at 60% after 1 year, but there are many techniques, as well as product nuances that can encourage an audience to convert to electronic documents more quickly.

Get in touch today and find out how quickly you can benefit from electronic document distribution, saving all year round and side-stepping postal strikes and seasonal fluctuations like the Christmas post.


*Shock figures reveal how many parcels are lost or damaged

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Improve Accounts Receivable Performance through Better Communications http://netsend.com/blog/improve-ar-performance-better-communication/ Mon, 23 Oct 2017 09:49:18 +0000 http://netsend.com/?p=3273 The post Improve Accounts Receivable Performance through Better Communications appeared first on Netsend.


Improving Accounts Receivable performance can provide a valuable impact on cash flow for any business.  This improvement can be thought of as spanning a number of focus areas, these are:

  • Communications – types, frequency and content
  • Production – systems and tools to create communications
  • Management – reporting, proactivity and escalation processes

We look at each of these here and outline recommendations to review your existing processes and improve AR performance.

Communication tactics to improve AR performance

The communications process in AR is all about striking the right balance between chasing prompt payments and maintaining good customer relations.  Invoices are sent with plenty of notice, and ideally customers pay promptly with no further reminder.

In reality, many customers require a little extra nudge.  Often this takes the form of a statement – outlining invoice details and reminding of the need to pay.  Or a dunning letter, which is typically sent after progressing from polite reminders and direct contact to the need for a firmer demand for payment.

Conventional wisdom is that if an invoice is not paid within an acceptable period, a statement is sent, followed by direct contact and then, if needed, a dunning letter.  However, it is valuable to identify whether a customer has actually seen the initial invoice, or statement, before sending the next communication.  One of the most common excuses for late payment is ‘not having seen the invoice’, but tools exist to reduce the risk of this now (see the later section on managing AR communications).

In the world of digital communications, many businesses are moving over to electronic invoicing as part of an e-billing intuitive.  This presents many benefits to the business, such as improvements in efficiency and accuracy, but increasingly electronic formats are preferred by customers too.

Consider your customers’ needs, do they have automated Accounts Payable systems, or require invoice submittal to a Value Added Network (VAN)?  In such cases, connectors exist to mesh invoicing systems from AR with their customer-side counterparts.  In some cases, customers will prefer to receive communications by email, or even SMS.

There have been countless studies showing how communication preferences have changed from Generation X, to Y, to Z.  Think carefully about your customer demographics, should you be targeting younger customers with SMS, WhatsApp messages, or other channels?  Where is the sweet spot for email communications, and when do you need to fall-back on sending printed letters by post?

Improve AR performance through better production

Once you have mapped out your customer communication needs and preferences, you need the tools to effectively deliver these communications.  Leading e-billing systems, such as Netsend, offer the ability to send communications in a variety of media types, spanning print and post, to email, to EDI and direct integration with AP systems and VANs.

Where possible, invoicing and other AR communications should be automated – flowing directly from accounting systems to reduce the risk of human error in the copy-paste of information.  Outsourcing to an e-billing specialist, such as Netsend, enables the AR team to deliver accurate communications quickly and efficiently, allowing them to focus on more profitable tasks, such as chasing late payments and dealing with anomalies.

In the era of electronic communications, it makes sense to allow customers access to their invoicing archives – through an online portal.  The use of such a portal can also provide a location for customers to self-service requests for reprints, or even pay invoices online with a card.

Managing AR communications to improve performance

Where modern, electronic, solutions are deployed for AR communications, there is an opportunity to use these to record engagement levels.  Forever removing the risk of customers claiming not to have received, or read, an invoice or similar communication.  Through the advent of such tracking, reports can be generated on a regular basis to understand who has indicated intent to pay, or paid, and who hasn’t even engaged to any degree.

Armed with the insight into who is engaging, or expressing intent to pay, AR teams can more effectively organise proactive communications to remind customers to pay, or identify who they need to pick up the phone to.

Given the linear, procedural, nature of AR communications, it’s not hard to see how many steps in the escalation process can be automated – further improving AR efficiency and performance.


A carefully balanced approach is required to ensure the best communications, production and management practices are in place and aligned to deliver optimal AR performance.  Working with an expert partner to outsource aspects of AR processes, such as electronic invoicing and associated communications is one of the most effective ways to achieve this.


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Metrics to analyse Accounts Receivable performance http://netsend.com/blog/metrics-accounts-receivable-performance/ Tue, 01 Aug 2017 08:08:10 +0000 http://netsend.com/?p=3060 The post Metrics to analyse Accounts Receivable performance appeared first on Netsend.


Measurement is the first step towards improving performance.  And measurement is only valuable in this regard if you’re measuring the right things.  Through the deployment of electronic invoicing, we help clients all over the world improve their accounts receivable performance, so we’ve established a clear list of the metrics that matter to determine performance improvement.

Browse the list below and evaluate your accounts receivable performance.  At Netsend, we can show you how significant improvements can be made in all of these important areas.  For instance, how The Guardian reduced their DSO by 2 days – read their case study here.

Days Sales Outstanding (DSO)

Probably one of the most important, and frequently measured, metrics for judging AR performance.  DSO is the length of time it takes to collect the money owed to the business.  Different industries, and different countries, have different average lengths of DSO.  One of the best resources for determining the average your business should be looking to meet, or improve upon, can be found in the quarterly Atradius Reports.

On average, in the UK, DSO is 31 days.  This is significantly better than the average of 44 days DSO across Europe.  With payment terms typically being in the range of 30 days, this equates to an average delay of just 1 day in the UK, but 14 days across Europe.

It’s important to realise that DSO can fluctuate significantly, so is best averaged over a year at least for general performance, or tracked more closely for regular late-payers and a means to chase sooner and shorten their typical delay time.

DSO is best contrasted against best possible DSO, with the goal of driving DSO down to as close to the best possible DSO as you can.  Best possible DSO is calculated as:

Best possible DSO = (current receivables x number of days in invoicing period) / credit sales for period

How to improve DSO?  One of the easiest ways to drive down DSO is to integrate with buyers’ payment systems and encourage automated payment – perhaps incentivising for payment within an acceptable timeframe.  Additionally, tracking invoice receipt and even intention to pay can provide an early indication of which customers’ payments will need to be chased down, and who is likely to pay on time.  At Netsend, our portal provides an easy route to track payments and our connectors provide deep integration with a vast range of payment systems and Value Added Networks (VANs).

Average Days Delinquent (ADD)

The measure of ADD provides insight into how effective AR processes are in collecting receivables on time.  ADD is calculated as:

ADD = DSO – best possible DSO

As mentioned in the section about DSO, above, it is important to use best possible DSO and actual DSO as comparative metrics – ADD provides exactly this measure.  Plotting ADD and DSO visually, over time, can provide an intuitive handle on performance fluctuations.

Collective Effectiveness Index (CEI)

CEI provides insight into how effective AR process are at collecting all outstanding money in a specific period (often one year).  CEI provides a quantitative handle on collections processes, rather than the more qualitative indication from DSO or ADD.

CEI is calculated as a percentage by:

CEI = (beginning receivables + monthly credit sales – ending total receivables) / (beginning receivables + monthly credit sales – ending current receivables) x 100

100% CEI implies a perfect collection process, so AR teams should strive for as close to this as possible.  Ongoing performance measurement should pick up any significant drops in CEI, as these indicate a problem with the collection processes.

CEI and DSO should move in different directions as performance enhancements are made to AR processes, such as e-invoicing or automation.  CEI provides an overall measure of quality of collection processes, rather than DSO or ADD which are measurements of time and reflect broader AR processes.

Accounts Receivable Turnover ratio (ART)

The ART ratio indicates cash flow and liquidity through a measurement of how frequently accounts receivable are turned into cash.  ART is measured over a period of time, typically a year.  ART is calculated as:

ART = net credit sales / average accounts receivable

As any CFO, CEO or senior financial role will be aware, cash flow is extremely important for the health of a business.  Free cash flow determines how much money is left to reward shareholders, or to reinvest for business growth.  Measuring ART keeps tabs on how effectively AR processes are supporting this.

Number of revised invoices

Whilst this isn’t a standard, formal, metric, the number of revised invoices generated over a given period is valuable to track.  This determines the quality of the outgoing invoices and can help identify needs to improve initial invoice quality through automation or better access to information.

And invoice revision that is required adds additional workload to the AR team, and time to the invoicing process.  AR automation is a proven approach to reducing inaccuracies in invoices and flows well into the wider remit of electronic invoicing.

Improving Accounts Receivable performance after measurement

Whichever metrics (hopefully all) you are measuring, you need to think what you intend to do with the learnings.  Determining that your DSO is well beyond your industry average, but without a plan to address this, measurement is meaningless.

Solutions such as electronic invoicing and AR automation present a popular route to addressing AR performance challenges.  The beauty of these solutions is that they support your existing AR team and processes, enabling AR teams to focus on more valuable work that can’t easily be automated or digitised.  The biggest threat to business success is, often, wasted time – at Netsend, our AR solutions improve productivity and enable you to focus on your business.

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Eradicating Negative Cash Flow http://netsend.com/blog/eradicating-negative-cash-flow/ Mon, 05 Jun 2017 08:56:32 +0000 http://netsend.com/?p=2776 By Arthur Kaufman, Independent writer and speaker  Let me start by saying I am eminently unqualified to write what you’re about to read.  I have no qualifications in finance, banking or the credit industry, nor any experience in running a business of any kind.   Even so, I am entitled to offer my thoughts or should […]

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By Arthur Kaufman, Independent writer and speaker 

Let me start by saying I am eminently unqualified to write what you’re about to read.  I have no qualifications in finance, banking or the credit industry, nor any experience in running a business of any kind.   Even so, I am entitled to offer my thoughts or should I say my wonder on the subject of credit, especially of a commercial and a personal nature, which together in the UK alone has reached the multi-trillion mark and which obviously worries many economists despite their lack of consistency in most other aspects of lending and borrowing money.

Negative Cash Flow a Thing of the Past

My wonder about such matters is as follows: If say, by any chance however remote, every business and person who had outstanding debts, whether for money owed on products, labour, loans or other commitments too numerous to mention, suddenly were able to settle all they owed and actually tried to do so, what would be the result?  Would it be good, bad, unpredictable or totally chaotic with no solution in sight?

The advantages of modern technology is that information can now move with the speed of light

Given that it would take a little time for all repayment transactions to go through (including penalties in cases of early settlement), the advantages of modern technology, where information can move with the speed of light thereby ensuring that on the ‘big’ day in question, everybody and every legally defined body would be free of debt, in line with the rare few who always pay their bills as soon as received.

For those worried over too much outstanding debt and often pressured (or chased) to honour what is long overdue, I suppose there would be instant relief.  For those firms or institutions who provide loans and credit, presumably they would be overwhelmed with more money than what they knew what to do with, even though the lack of cash flow would (at least in theory) be a thing of the past.

Déjà vu

If you’ve read this far, you will be aware that a state of ‘No Owe’ raises other problems.  Is having credit and its level increasing at what seems an unsustainable rate preferable to getting rid of it altogether, even if only temporarily?  In attempting to do so, would most businesses suffer beyond repair or, instead, then be able to have a good look at themselves, with a once in a lifetime opportunity of making a fresh start by allowing the best in their brain reserves to have a hard think about avoiding what could be another very black financial hole.

The system underlying this has collapsed under its own mass because of mismanagement, greed, or a seemingly uncontrollable momentum of its own, which occurred in the not so distant past.

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E-invoicing for Financial Shared Service Centres http://netsend.com/blog/e-invoicing-for-financial-shared-service-centres/ Tue, 23 May 2017 12:02:52 +0000 http://netsend.com/?p=2751 The post E-invoicing for Financial Shared Service Centres appeared first on Netsend.


Divesting authority and control away from Head Office and out to operations in the field has been a popular business model for many years.

In the 1700’s the East India Company allowed all of its factories around the world to operate locally and control their own affairs. This decentralized approach became the dominant structure for organizing and running any business that operated on a multinational basis. The business model worked and tea became a global commodity.

Of course, much of the popularity of decentralisation was driven by necessity. Before the availability of the Internet or even telephones there was little choice but to make local, on the spot decisions if you wanted to capitalize and react to events as they happened.

However, the popularity of decentralization endured long after technology had started to provide methods of collaboration and instant communication. In the 1980’s the UK Government began to devise measures to decentralize the economy by privatizing public sector enterprise. Seemingly in step with the political climate the majority of business consultants began to espouse the decentralized mantra and businesses strived to implement it as a key element in their business strategy.

By the early ‘90s organisations were waking-up to the idea that decentralisation (at least in some contexts) missed many of the opportunities for economies of scale and standardised working practices. The growth and rapid development of information technology began to turn the tables. The internet and other electronic information systems made the distribution of information ubiquitous and cheap. It became clear that centralising financial processing, particularly across borders, enabled economies of scale, improved control and provided greater visibility of these important processes. And the Financial Shared Service Centre (FSSC) was born.

Today over 60% of fortune 500 businesses have shared service centres, and this continues to grow. Consolidation of processes requires standardisation, but this standardised approach can prove costly to reintegrate with the wider business where internal or customer-facing touch points exist. One such touch point is invoicing.

Today over 60% of fortune 500 businesses have shared service centres

E-invoicing in an FSSC

Both e-invoicing and the shared service centre offer efficiency gains as well as centralised, aligned and more visible processes. In particular, the function of e-invoicing can help take a singular, standardised invoicing feed from financial systems and create the rich variety of invoice formats and template-driven layouts, with localised nuances, required across the breadth of recipients.

Equally the reverse can be true; FSSCs can operate separate and sometime disparate legacy systems, incorporated from various territories, divisions and acquisitions. In such circumstances an e-invoicing solution can become an aggregator, unifying the process into a single, brand consistent and uniform output.

E-invoicing to save costs whilst improving efficiency and flexibility

In some cases reductions in staff costs of up to 35% have been achieved. Often the maximizing of existing staffing resource isn’t about head count reduction but about reducing the need for costly and time consuming recruitment drives.

The reduction of print and paper invoicing supports this increase in efficiency further, enabling fewer credit control and collections staff to achieve far more in the same time.

Where there is still a requirement for printed and posted invoices and other financial documents, e-invoicing and document management solutions exist that take advantage of local postal fulfilment. This helps reintroduce the low, localised postage costs not often associated with centralised financial processing.

E-invoicing as a creator of value in the FSSC

Today, in addition to being an important part of the drive for financial and process efficiency, there is also a demand on Financial Shared Service Centres to increase the quality and professionalism of support processes for the business and its customers.

E-invoicing should form an essential component in the makeup of a FSSC as it can help achieve both goals. Without e-invoicing, an FSSC may be creating efficiencies in many areas and yet struggling to realise the impact of this due to the bottleneck in manual invoicing processes. Electronic invoicing also provides a platform to enable more immediate identification of bottlenecks, through greater analytical insight and accessibility of performance data.

The East India Company never survived long enough to see the pendulum swing towards centralisation. Running into financial difficulties, and providing the catalyst for revolution on at least two continents, the Company was eventually dissolved in 1874. Given their prominence and success in working the decentralized business model it’s perhaps ironic that today India hosts the largest number of shared service centres in the world. From the last quarter of 2014 India’s economy became the world’s fastest growing major economy, replacing the Peoples’ Republic of China.

I’m not sure if those two facts are related, but it’s certainly something to think about as I go and put the kettle on.


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How to be Smart with Multi-Channel Communications http://netsend.com/blog/smart-multi-channel-communications/ Mon, 15 May 2017 07:58:15 +0000 http://netsend.com/?p=2711 By Phil Hutchison, Neopost UK A good multi-channel communications strategy takes a customer view of your business’ communication. It gives them the choice over how they wish to interact with you and aims to deliver the best possible experience through each communication channel. Customer demand for multiple channels of communication is growing and firms that fail […]

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By Phil Hutchison, Neopost UK

A good multi-channel communications strategy takes a customer view of your business’ communication. It gives them the choice over how they wish to interact with you and aims to deliver the best possible experience through each communication channel.

Customer demand for multiple channels of communication is growing and firms that fail to provide options will inevitably be left behind. Customer-centric companies build their customer contact strategy from the outside-in, asking:

  • How do our customers prefer to be contacted?
  • How do they respond and purchase?

Of course, technology makes it easier and more convenient to keep in touch at work, at home and on the move. Many people now choose to make purchases, book appointments, check order progress and more through their smart phones.

That doesn’t mean however, that companies should neglect other ways of interacting with customers. In fact, 84% of adults don’t like it when companies take away their right to choose how they’re communicated with.

If that wasn’t reason enough for multi-channel communication, 56% of customers don’t return if a company doesn’t provide it.

Taking a cross-media approach can see on average a 33% higher ROI

An investment in channel communications pays off. Think print, email, online and mobile. When companies take a cross-media approach to a campaign, they see on average a 33% higher return on investment.

At Neopost, we are working with Netsend to help these returns a reality for our clients. Together, we’re enabling their own end-user customers to choose the communications channel that suits them the most.

But the benefits of multi-channel communications are more far-reaching than good customer service; there are cost and efficiency savings to be had too. Consider that:

  • Customers who like to use email save you printing and postage costs
  • Integrating digital communications with your business systems reduces manual processes, increasing staff efficiency
  • Digital methods are fast, so you’ll be able to respond to your customers more quickly

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Accounts Receivable Best Practice: 7 Steps for Improving Productivity http://netsend.com/blog/accounts-receivable-best-practice-7-steps-for-improving-productivity/ Mon, 08 May 2017 08:48:31 +0000 http://netsend.com/?p=2617 The post Accounts Receivable Best Practice: 7 Steps for Improving Productivity appeared first on Netsend.


Accounts Receivable best practice has at least one element in common with virtually any other best practice recommendation for business.  Lose the paper, go digital.  It’s staggering to think that, even in some global businesses, AR teams may be printing, folding and stuffing paper invoices into envelopes for post.

Paper is fast becoming a relic from bygone days, at least in a business sense.  It’s just not efficient enough for the pace of modern business.  Even at a personal level, it’s easy to identify with the inefficiencies of paper-based processes.  How frequently do you write letters these days, when instant communication is but an email away?

Working with global businesses, to improve productivity in Accounts Receivable teams, has enabled us to identity a number of key areas for AR process improvement.

Accounts Receivable Best Practice #1: Efficiency

Best practice in Accounts Receivable is driven by the need for improved business efficiency.  The biggest threat to business success is, often, wasted time.  Replacing paper-based invoice generation with electronic invoicing enables automation of AR processes, freeing up the AR team to focus on more profitable activities that require the nuances of a human touch – such as chasing down late payments and resolving credit issues.

Accounts Receivable Best Practice #2: Visibility of Payment Status

Beyond plain efficiency, AR best practice should include improved visibility of invoicing status.  E-invoicing achieves exactly this, with the ability to identify what was sent to whom, whether it was received, or even read, and when.  With advanced e-invoicing solutions, such as Netsend, customers can even mark an invoice, electronically, to indicate payment intent, or pay directly online there and then.

Improved visibility provides insight that can be acted on, to support credit controllers in reducing late-payments and disputes.

Accounts Receivable Best Practice #3: Chasing Payments

One of the most valuable roles AR teams play is to chase down payments and bring the cash into the business as quickly as possible.  Collecting money fast is always a major competitive edge.

A well-structured e-invoicing solution should be able to provide an at-a-glance view of outstanding payments, or even a pre-emptive list of habitual late payers to chase before they are due.  Sometimes a simple statement can be sent as a timely reminder, encouraging payment.  Automation rules can be set to assist with this process and preserve the AR team’s time for more complex or sensitive payment conversations.

Integrating e-invoicing with credit collection software such as Ero57 enables seamless and secure access to sensitive documents, and messaging workflows, expediting credit collection. Where possible, this should be a consideration for improving productivity in an AR team.

Accounts Receivable Best Practice #4: Security, Compliance and Ease of Auditing

Whilst security doesn’t necessarily enhance productivity, it’s still made it onto this list as an essential consideration for AR best practice.  Given the sensitivity of invoicing information and customer payments, it’s essential that any digital transformation of Accounts Receivable processes – from e-invoicing to automation – complies with industry standards such as ISO 27001:2013.

VAT compliance can be met most efficiently via the use of digital signatures and online record keeping, although many businesses still unnecessarily encumber themselves with paper-based records for the same purpose.

Auditing can prove painful for AR teams when invoice records are stored in paper format.  Modern, electronic, systems enable much faster access to documents via search and present the opportunity to generate reports for auditors at the touch of a button.

Accounts Receivable Best Practice #5: Integration with Accounts Payable

The flip-side of every invoice sent is the payment process.  In a B2B context, Accounts Payable teams, and increasingly automated AP systems, need to process invoices before payments can be made.  Integration of invoice distribution with AP systems is growing in importance as a way to simplify and expedite the payment process.

In some cases, Accounts Receivable teams are manually inputting invoices into customers’ AP systems.  Where possible, AR teams should deploy e-invoicing solutions that have connectors for the payment systems they need to integrate with, saving time on inefficient manual processing.

Accounts Receivable Best Practice #6: Supporting Paper

We do not live in a perfect world, consequently many businesses find the need to support a percentage of customers who still require paper invoices.  Industry average conversion rates for customers to accept electronic format invoices are around 60%, although at Netsend we often achieve in excess of 80% conversion within a matter of months.  To achieve the best efficiency gains from electronic invoicing and AR automation it’s essential to handle the remaining paper-based percentage via the same process.

Best practice in this regard is to process all invoices in the same manner, but directing those who require paper to be printed and posted by an offsite solution partner.  This removes the need to maintain print and postage hardware in-house and for the manual fulfilment of this time-consuming process.  Including within the same invoicing solution enables aggregation of invoicing records and improves reporting, auditing and overall efficiency.

Accounts Receivable Best Practice #7: Outsourcing

Few businesses stop to think about it, but we all outsource postal delivery to the postal service.  It’s simply not efficient to run your own postal service.

Indeed, the point above (#6: Supporting Paper) follows a similar line, in that best practice in supporting paper-based invoices is to outsource the whole print and postage process to enhance efficiency.  For instance, at Netsend, we often leverage print and post at a hub within the destination country for the invoices, saving time and cost on international delivery.  However, these efficiencies are only achievable through economies of scale brought about by the volume of printed invoices we handle for clients on a global scale.

So, printing and posting of invoices are best practice to outsource, but what of the electronic invoicing and AR automation solutions themselves?

As businesses embrace cloud-based and Infrastructure as a Service (IaaS) solutions, it’s common wisdom that high up-front investment in solutions is often better offset in favour of an as-a-service solution funded through savings in operational expenditure.

Companies who attempt to develop and maintain e-invoicing solutions in-house are faced with a massive task.  Whilst it’s certainly possible to do this, there’s a reason why global corporates such as 21st Century Fox, Pizza Hut and VF Corporation choose to outsource their e-invoicing to Netsend.  It is simply not economically viable for most businesses to develop and maintain an e-invoicing solution in-house, keeping on top of evolving invoicing standards and technology requirements.

Outsourcing may raise questions about control and risk, but these are easily addressed.  The control remains within the business, as you dictate the requirements, and the outsource partner provides assurances by way of contractual obligations and service level agreements.

By delegating the responsibility you’re allowing someone else to take care of the details and address any risks. Outsourcing allows you to tap in to the knowledge, experience and capabilities most suited to successfully realise the task.


For more information about the value of outsourcing your e-invoicing take a look at our FAQ document.


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