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Exploring The Myths And Environmental Benefits of Electronic Invoicing

The Environmental Myths

If you ask anyone to guess the number one environmental benefit of electronic invoicing, you will almost certainly be told: “saving paper”. Some companies even label their invoicing products as “green invoicing”. The reality is that the environmental benefits around saving paper are dubious. Paper is most commonly made from cellulose pulp derived from farmed trees and that is a renewable source.

When you see articles about how saving paper means saving trees, be skeptical. The trees we want to save are the old established woodlands. To save those we need to stop slash-and-burn farming, and stop felling forests.

Most paper comes from coniferous trees which are very renewable and can grow within two-to-six years after being cut down. Additionally, recycling paper requires lots of energy. Most paper needs bleaching when it is recycled and that’s bad for the environment. It’s an issue the media has picked up on without understanding it fully.

We’ve seen this kind of misinformation before, around glass bottles. Ten years ago, everybody in the U.K. was recycling glass in bottle banks – but glass is just silicon, which is biodegradable. By contrast, it takes enormous amounts of energy to recycle it. These days plastic is a much bigger issue.

The Real Environmental Credentials of “Green” Invoicing

Despite the many environmental myths, environmental benefits do exist for digital invoicing. These include:

  • Sending invoices electronically uses less energy, and requires less printing.
  • Every time an item is physically sent it uses fossil fuels to do so, especially when it is sent around the world.
  • Saving paper may not have the impact we have been promised but ink is another matter. Most ink is toxic, so when the paper biodegrades, it left behind and can be damaging to the environment.
  • Coniferous forests used to make paper, are very thin and don’t have the same environmental benefits as other forests. By producing less paper, land used to grow coniferous trees can be repurposed for more environmentally friendly projects.

By outlining these significant environmental benefits, businesses can be encouraged to support the green agenda, and their own efficiency, by switching fully to electronic invoicing.

The Business Benefits of Electronic Invoicing

The primary benefit for business is the fast delivery of information making it easier to process. If it’s on screen, financial workflows can be simplified. Having it available as a PDF or electronic version also provides flexibility. Another overlooked benefit – is that resolution of queries is far quicker because it’s possible to respond immediately, without hunting for hard copy invoices in box storage.

In the past, people would say “I need the ‘original’ invoice or a ‘true copy’” before they could process a payment. Bypassing this with digital makes locating an invoice significantly easier, meaning faster payments.

The Future of Green Invoicing

The move to electronic invoicing is being driven primarily by big business, such as financial institutions, who are now demanding to be invoiced in this way. After all, this way of invoicing is something they have adopted for their own customers. It’s to be expected that they want their vendors to do the same.

The pace of change is quickening and small-to-medium sized enterprises (SMEs), which make up 70 per cent of our customers at Crown Records Management, are following suit. It’s clear that the world is headed in this direction, so the advice to all businesses is to do everything they can to adopt electronic invoicing processes in the long run.

Moreover, as the devices we use for reading, sharing and manipulating information (such as smartphones) improve, electronic invoicing becomes even more relevant.

People increasingly don’t need hard copy, and as the generations change and business is populated by people who are less accustomed to paper, that will be the deciding factor in driving electronic invoicing adoption. It’s about mindset, but it’s also cultural in some regions where the resistance to letting go of paper is stronger.

Being a global company, we see big differences across the world in how businesses invoice and the level of comfort with new technology. There are still countries where it’s currently not possible to offer only electronic invoicing.

However, it’s a diminishing number and we must keep pushing, both for more seamless commercial transactions and the immense environmental dividend.

In China, for instance, when you send an invoice you must also send the government a copy, in which the government confirms it’s a true invoice. In the past that had to be a hard copy. But last year they brought in electronic invoicing, and that’s a big change in a substantial market. It’s likely to influence others and we’ve already seen other countries following suit.

In mature markets, in countries such as Australia, the U.K. and Hong Kong, governments are developing policy to try and encourage even more digital and environmentally friendly policies. Gas bills, electric bills, banking statements are all electronic, in many cases if you want a hard copy you’re charged for it.

In Conclusion

The benefits of electronic invoicing for business and for the environment make it even more certain that we are heading for a digital future, so it’s important we talk honestly about it, including the many myths associated with paper.

By embracing the process as a business, you are using less energy, are no long sending physical items around the world and no longer using toxic inks. This list of environmental benefits should be the focus rather than an ill-informed agenda around saving trees and recycling paper, which is not reality based.

What is real are the benefits to both the issuer of an invoice and its client because the information is cheaper and quicker to produce, easier to access, easier to share and makes the resolution of any queries more efficient. Electronic data can be stored cheaply and securely and can be purged to ensure it is not kept beyond its required lifetime. The last point has become pressingly relevant as regulation around data protection develops.

All these positives have knock-on benefits for the planet. However, many of them are negated if businesses choose to ask for a hard copy in addition to an electronic invoice and if they opt to print an invoice once it has been delivered digitally. Learn more about electronic invoicing.

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