Findings on Singapore’s E-Invoicing network
An IndSights Research report summary
In 2019, the Info-communications Media Development Authority of Singapore (IMDA) implemented the nation’s E-invoicing network to help businesses improve efficiency, reduce cost, enjoy faster payment, and stay green. This e-invoicing network is an extension of the International PEPPOL E-Delivery Network, allowing businesses to transact internationally with other participating companies.
This is an abridged version of the findings and the detailed version has been shared with participants of the study.
ADOPTERS OF PEPPOL
IndSights Research wanted to find out about the sentiments of businesses about the E-invoicing initiative. We found that:
- 80% of companies believed that this initiative would be beneficial to their business; adopters were even more likely to think so.
- 71% would recommend to business partners
- 58% were positive about the installation process
About PEPPOL E-invoicing
According to IMDA, many companies issue invoices by extracting the data from their accounting/ERP systems, format them and send them via paper or email. The buyer will then need to manually enter or scan the information into their own systems. This process is time-consuming and error prone.
The PEPPOL E-invoice is one that is completely generated, transmitted, and processed digitally with little to no manual handling. The E-invoice is created digitally in a supplier’s financial system, transmitted electronically through the network to the recipient where it is processed automatically.
A question that some may ask is, “how is this different from the e-invoicing system I already have”? The network allows the businesses to use the Accounting/ERP solution of their choice. Many such solutions are already compliant with the requirements.
E-invoicing over the PEPPOL network reduces the risks for error which may delay payments. It also reduces printing of invoices, thereby reducing the carbon footprint and helping businesses stay green.
Cost savings can be estimated using this calculator (100.91KB).
NON-ADOPTERS OF PEPPOL
In our study, we found that of the companies which had not adopted PEPPOL, 25% described their current invoicing process as labor intensive and inefficient. Many were manually processing digital or hardcopy invoices. This corroborates IMDA’s observation above.
With the non-adopters, we were curious as to how they were currently sending or receiving invoices. We found that the two main methods were email (96%) and mail (75%).
In addition, we also observe that many of the non-adopters used both email and mail to send or receive invoices. This supports the survey finding that some companies considered their current processes to be manpower intensive and/or inefficient.
IndSights also asked the non-adopters about the main pain points with their current invoicing process. The top three that companies cited were: Different invoicing methods dictated by suppliers and partners (49%); slow process due to manual effort needed (48%), and being prone to human errors (43%).
From the pain points, we can also conversely see the benefits of adoption.
BENEFITS of PEPPOL
1. Access new financial options
Allows accurate and near-real time visibility of payment cycles. Enabling better business sustainability and growth through efficient cash flow management.
2. Get paid faster
Common standard allows quicker validation and reduce payment processing delays.
3. Improve efficiency
Streamline processes and do away with manual data entry which are error prone and cuts down the need to resolve errors.
4. Reduce cost
Moving away from paper eliminates or reduces storage and retrieval costs.
5. Transact cross border
Global network allows organizations to send e-invoices to participating business partners overseas. Given the pain points for non-adopters as well as the potential benefits of getting on the PEPPOL network, we wanted to look at what might be the potential take up in the near future. We found that 45% of companies intend to adopt PEPPOL in the next 12 months. In addition, 37% of companies who are still thinking about adopting the system are concerned about the costs and the current economic climate.
Separately, with the globe reeling from the COVID-19 pandemic, IndSights Research found in an earlier survey that while many ICT companies were negatively impacted, 18% saw opportunities and increased revenue in Jan-Mar due to the change in global economic performance. The health crisis has been the catalyst for wider and faster tech adoption worldwide
We think the adoption of a system on the PEPPOL network may be one such opportunity towards that of digitisation and innovative use of technology. In fact, as of Jun 2020, more than 10,000 businesses have already joined the e-invoicing network, up from 1,000 in March.
GOVERNMENT GRANTS & INITIATIVES
Singapore recognises the benefits of digitisation. There has been a strong push to help businesses improve productivity, reduce reliance on labour, or lower long-term labour cost. We see this in Singapore’s SMART Nation plan. An example of one such grant is: adopting e-invoicing is one of the conditions for companies to be eligible for a payout of up to $10,000 under the Digital Resilience Bonus. Listed here are some of the applicable grants potential adopters can avail themselves to.
1. E-invoicing Registration Grant (ERG)
One-time payment of $200 to businesses that register on PEPPOL by 31st Dec 2020. Click here to find out more.
2. Chain Leader Grant
Businesses with at least 500 suppliers and customers can get a 50% subsidy on PEPPOL solution implementation costs (maximum of $150,000), if they on-board at least 5 SMEs (small and medium sized enterprises). Click here to find out more.
3. Digital Resilience Bonus
Food Services and Retail enterprises that have PayNow Corporate, e-invoicing, and use pre-defined categories of digital solutions for Business Processes, Digital Presence and Data Mining and Analytics can receive bonus payouts of up to $10,000. Click here to find out more.
4. Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG)
The enhanced PSG encourages enterprises to continue their digitalisation and productivity upgrading efforts with expanded scope of generic solutions to help enterprises implement COVID-19 business continuity measures. The EDG funds qualifying project costs such as third-party consultancy fees, software, equipment, and internal labor cost in supporting Singapore companies to upgrade, innovate and venture overseas.
The maximum funding support level for both grants will be raised to 80% from 1 April 2020 to 31 December 2020. For enterprises that are most severely impacted by COVID-19, the maximum support level for EDG may be raised to 90% on a case-by-case basis. Click here to find out more.
About the study
This survey collected views from 607 companies across different industries from May to June 2020.
More about Singapore’s PEPPOL E-Invoicing network
IMDA joined as the Pan-European Public Procurement On-Line (PEPPOL) Authority in Singapore in May 2018, and is responsible for approving and certifying Access Point (AP) providers in Singapore. As the PEPPOL Authority, IMDA is also responsible for setting national rules and specifications that meet Singapore’s domestic requirements. Currently, there is no national extension of the PEPPOL BIS format. BIS 3.0 will be used as the standard for Singapore.
SGNIC, a subsidiary of IMDA, is the appointed Service Metadata Publisher (SMP) in Singapore. The Singapore APs will need to register the PEPPOL ID of Singapore businesses with the Singapore SMP. The format of the PEPPOL ID is made known to all Singapore APs.
IMDA is working with the relevant stakeholders, including other government agencies, trade associations, APs, solution providers, large businesses, and Small and Medium-sized Enterprises, to create a vibrant e-invoicing ecosystem in Singapore. In addition, IMDA is leading the adoption of PEPPOL in the ASEAN region. IMDA will help the neighbouring countries in the ASEAN (Association of Southeast Asian Nations) region who are interested in introducing a domestic standard of e-invoicing and promote more seamless cross-border businesses activities.
Singapore is the first Asian country to implement an electronic invoicing standard based on a similar process used in Europe. IMDA implemented the Pan-European Public Procurement On-Line, or PEPPOL, which will allow businesses to speed up transactions, lower operating costs and minimise errors.
Announced in 2018’s Budget, further details of the system were announced by Communications and Information Minister S Iswaran at the inaugural Singapore Digital (SG:D) Industry Day held at the Suntec City Convention Centre.
IMDA will work with government agencies, trade associations and chambers such as Enterprise Singapore and the Singapore Business Federation to implement the e-invoicing standard, and collectively drive adoption of a common framework for businesses. The push is part of efforts to help companies go digital. Efforts include enhancing the SMEs Go Digital programme with the introduction of an initiative called Digital Project Management Services, where professionals, managers and executives will be trained to be in-house digital project consultants to help small- and medium-sized companies execute their digital plans. There is also the Open Innovation Platform – a virtual crowd-sourcing platform that will match solution providers with firms that are facing challenges in their business.
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i. Nationwide E-Invoicing Initiative. (2019). From: https://www.imda.gov.sg/programme-listing/nationwide-e-invoicing-framework
ii. Nationwide E-Invoicing Framework in Singapore. From: https://peppol.eu/what-is-peppol/peppol-country-profiles/singapore-country-profile/
iii. Singapore to implement e-invoice network based on Europe’s PEPPOL. (2018). From: https://www.channelnewsasia.com/news/singapore/singapore-to-implement-e-invoice-framework-based-on-europe-s-10255456