In honor of earth day which took place on April 22, this week we are going to discuss the delivery and receipt of invoices. It’s impossible to know exactly how many invoices are sent globally on an annual basis, but Ardent Partners’ estimates the number to be well over one hundred billion, yes, billion, per year. In North America, the number is likely between 25 – 50 billion. Herein lies the problem, our 2019 State of ePayables market research showed that almost half (49.7% to be exact) of invoices are still being sent and received in paper format. Compounding our paper problem is the fact that every paper invoice requires an envelope in order for it to be mailed. Further exacerbating the issue is that many invoices require more than one page and sometimes, many, many pages such as utility bills. Any way you cut it, we are talking about hundreds of billions of pieces of paper being used in the invoicing process every year.
In isolation, our own myopic view of the paper invoices may not seem like very significant. However, if you take a step back and imagine all the paper invoices in the world, the situation and problem quickly becomes alarming. You might ask why should we care about the amount of paper being used for invoicing? Let’s start off by looking at the environmental impact of all this paper.
- 1 tree = 8,500 pieces of paper
- 1 million invoices = 118 trees
- 1 million invoices = 36 tons of carbon dioxide (CO2) footprint
- 1 billion invoices = 118,000 trees
It gets pretty scary when you do the math. The impact to the environment is significant. Global warming (yes, it has been scientifically proven to be real) is a genuine issue today as well as for the future well-being of our planet. Reducing the amount of trees and increasing the amount of CO2 into our atmosphere is not a value adding proposition. Every paper invoice we continue to send only adds to the problem.
Putting the environmental impact of paper invoices aside for a moment, Accounts Payable’s reliance on paper in today’s COVID-19 pandemic has caused significant operational problems for many organizations. Organizations reliant on paper are struggling to adapt and have been forced to enact newly-created contingency plans, mostly manual, labor-intensive in nature, in order to adapt and persevere in order to keep suppliers getting paid and businesses functioning.
The irony behind all of the paper being used for invoicing is that there are now, and have been for well over ten years, digital means of sending and receiving invoices that are not only much better for the environment but also more efficient and cost effective for suppliers and buyers alike. Additionally, in today’s remote, work from anywhere environment, electronic invoicing makes more sense than ever as an enabler for AP departments to provide seamless business continuity.
ePayables solution providers (Corcentric, Esker, Metafile, MineralTree, Tipalti, Tradeshift, and Transcepta) are all adept at helping organizations wean their suppliers from their paper invoice sending habits. In the past inertia may have been a primary contributing factor for suppliers making the switch to electronic invoicing but with all that is going on in the world at the moment, the wisdom of going digital makes more sense than ever. If not for the lower costs, higher efficiency, and business continuity, make the switch for the good of the environment.
