Background

An increasing number of ABC clients and local governments require ABC (and all suppliers) to provide an
electronic invoice for goods and services. Clients require this to improve business process efficiencies, allowing
them a 3-way match of orders, invoices, and payments through automated ePurchasing systems. Governments are
mandating electronic invoices for all Public sector suppliers to provide transparency of tax payments and to
minimize corruption.In 2013, just over $10B of ABC’s revenue was electronically invoiced, representing around
400 clients and 100K transactions. This spans all countries (where electronic invoicing is permitted) and all ABC
lines of business.

Challenge

Over the past 4 years, ABC has established a core set of capabilities to send clients electronic invoices (as
transactions in XML, EDI, or in other vendor-specific formats). While investments have been made largely in
response to client demand and for client benefit, we believe that there is also a benefit to ABC. Specifically, there
is a belief that providing electronic invoices has an improvement on revenue collection and, therefore, on ABC’s
overall Cash Flow.

Question1:

Are clients paying ABC faster (in fewer days) after electronic invoice is enabled versus before?

Is the Payment Delay (PD) improved with the same client set in the same accounting period, after being enabled
for electronic invoicing? Measured as follows:

PD from Invoice Data

PD from Due Date

Calculate Percentage Improvement

We can express the improvement as a percentage to quantify the impact of electronic invoicing.

Steps:

 Calculate the average payment delay for paper invoices.

 Calculate the average payment delay for electronic invoices.
 Use the formula:

Percentage Improvement = ((Paper Invoice Delay - Electronic Invoice Delay) /

Paper Invoice Delay) * 100

 This will give us a percentage that shows how much faster clients are paying after switching to
electronic invoicing.

For Paper invoice:

3181 of 3505 invoices delayed the payment and rest gave the payment timely i.e before the due date =
90.73%
For E-invoice:
869 of 1171 invoices delayed the payment and rest gave the payment timely i.e before the due date = 74.21%

INTERPRETATION
THEREFORE, THE PAYMENT DELAY IS GREATER IN THE MANUAL PAPER INVOICES THAN THE E-INVOICES.
Question 2:

Is there a positive impact on disputes, pre- versus post-enablement? Measured as follows:

Fewer disputes (measured in both value and volume)

Time to identify a dispute (Identification Time)

Dispute Resolution Time (days between Dispute start date and settled date)

We need to measure dispute frequency and resolution times before and after electronic invoicing.

Steps:

1. Count the number of disputes:

o Look for the column Dispute Number (Disputenumber). Count how many non-empty
cells exist in this column for both paper and electronic invoices.
o Filter for Paper invoices and count how many disputes there were, then repeat the same
for Electronic invoices.
2. Calculate the average dispute resolution time:
o Use the Dispute Start Date (Startdate) and Resolution Date (Resdate)/ Enddate
columns.
o Create a new column for Dispute Resolution Time:
 Formula: =Resdate - Startdate
o Filter by paper invoices and calculate the average dispute resolution time, then repeat the
same for electronic invoices.
3. Compare the results:
o We should now have the total number of disputes and the average time it took to resolve
them for both paper and electronic invoices. Comparing the results to see if electronic
invoicing reduces the number of disputes and the time taken to resolve them.

Dispute Number: Non empty cells

Whole data:

Out of 4675 data 461 data are disputed (9.8%)

Paper invoices:

Out of 3506 data 271 data are disputed (7.7%)

E-invoices:

Out of 1171 data 190 data are disputed (16.22%)

Average Resolution time for:

Paper invoices: E-invoices:

54.5547. 45.9818.

Interpretation:

 Higher Dispute Rate for E-Invoices: E-invoices have a higher dispute rate than paper
invoices, possibly due to issues in transition like data inaccuracies or format discrepancies.
 Faster Dispute Resolution for E-Invoices: Despite the higher dispute rate, e-invoices are
resolved faster, likely due to improved traceability and automated workflows
Question 3:

Are there any other notable correlations between electronic invoicing and revenue collection?

Geography (Country)

Client set (Industry)

Brand(s) (per Brand column)

Step 1: Prepare Data by Category (Geography, Client Industry, Brand)

 Ensure that our dataset contains columns for Geography (Country) and Brand.
 Make sure the data is clean and has no missing values for these columns.

Step 2: Create Pivot Tables

We can use Pivot Tables to examine the correlations between electronic invoicing and revenue collection
for each dimension (Geography, Client Industry, and Brand).

1. Insert Pivot Table:

o Highlight the entire dataset.
o Go to the Insert tab and select Pivot Table.
o Choose New Worksheet as the location.
2. Set Up the Pivot Table for Geography:
o Drag Geography (Country) into the Rows area.
o Drag Invoice Type (Electronic vs. Paper) into the Columns area.
o Drag Revenue or Payment Delay (whichever metric you want to analyze for revenue
collection) into the Values area.
o You can change the Values field settings to display the Average of revenue or payment
delay.
3. Repeat for Brands:
o Repeat the same process, but this time drag Brand into the Rows area. And for the
Industry wise segmentation we can search each brand and what industry they are
associated and get some insights out of it.

Key Observations:

1. Portugal:
o E-invoice delay: 37.36 days
o Paper invoice delay: 28.15 days
o Conclusion: E-invoices are paid slower than paper invoices by approximately 9.2 days in
Portugal.
 2. Spain:
o E-invoice delay: 26.23 days
o Paper invoice delay: 34.24 days
o Conclusion: In Spain, E-invoices are paid faster than paper invoices by approximately 8
days, indicating improved efficiency with electronic invoicing.
3. UK:
o E-invoice delay: 69.23 days
o Paper invoice delay: 24.01 days
o Conclusion: The UK shows a significant delay with E-invoices compared to paper
invoices, with E-invoices taking 45.2 days longer to be paid.

Overall Conclusion:

 Spain benefits from faster revenue collection with electronic invoicing compared to paper
invoices.
 Portugal and especially the UK show slower payment with electronic invoicing, with the UK
experiencing the most significant delay for E-invoices.

This suggests that while electronic invoicing may improve efficiency in some regions (like Spain), there
are significant challenges in other regions, particularly the UK, where E-invoices are processed much
slower than paper invoices.

Analysis of Payment Delays by Industry/Client (E-Invoice vs. Paper Invoice):

From the data provided in the table, we can observe how different clients are performing with E-invoices
versus Paper invoices in terms of payment delays. Let's examine specific trends:

1. Ayuntamiento de Alzira (Government Entity):

o E-invoice delay: 15.73 days
o Paper invoice delay: 68.13 days
o Conclusion: Significant improvement with E-invoicing. E-invoices are paid faster by
around 52.4 days compared to paper invoices, showing that E-invoicing is very effective
for this government entity.
2. BMS (Pharmaceutical):
o E-invoice delay: 10.67 days
o Paper invoice delay: 11.03 days
o Conclusion: Minor improvement with E-invoicing, with a small reduction of 0.36 days in
payment delays.
3. CECA (Financial):
o E-invoice delay: 7.42 days
o Paper invoice delay: 11.70 days
o Conclusion: Significant improvement with E-invoicing, with payment delays reduced by
4.3 days, indicating efficiency gains in the financial sector.
4. Colgate (Consumer Goods):
o E-invoice delay: 35.04 days
o Paper invoice delay: 29.08 days
o Conclusion: Surprisingly, E-invoices are taking longer to be paid, with a delay of about 6
days compared to paper invoices, which may indicate issues in the electronic invoicing
process for this client.
5. CRTVE (Media):
o E-invoice delay: 38.11 days
o Paper invoice delay: 37.43 days
o Conclusion: No significant difference between E-invoices and paper invoices, with
payment delays being almost the same.
6. GM (Automotive):
o E-invoice delay: 57.71 days
o Paper invoice delay: 103.41 days
o Conclusion: Major improvement with E-invoicing. E-invoices are paid about 45.7 days
faster, suggesting that the automotive sector benefits greatly from electronic invoicing.
7. HP (Technology):
o E-invoice delay: 29.29 days
o Paper invoice delay: 24.33 days
o Conclusion: Paper invoices are paid slightly faster by around 5 days. This could point to
process inefficiencies in the E-invoicing system for this technology company.
8. Kelloggs (Food):
o E-invoice delay: 75.77 days
o Paper invoice delay: 23.10 days
o Conclusion: E-invoices are paid much more slowly, with a delay of 52.7 days compared
to paper invoices. This highlights significant challenges with E-invoicing in the food
sector.
9. Nestle (Food & Beverage):
o E-invoice delay: 26.83 days
o Paper invoice delay: 34.40 days
o Conclusion: E-invoices are paid about 7.6 days faster, showing that electronic invoicing is
more efficient for Nestle.
10. Repsol (Energy):
o E-invoice delay: 29.26 days
o Paper invoice delay: 56.27 days
o Conclusion: Significant improvement with E-invoicing, with payment delays reduced by
27 days in the energy sector.
11. Unilever (Consumer Goods):
o E-invoice delay: 47.82 days
o Paper invoice delay: 22.24 days
o Conclusion: E-invoices are paid more slowly by 25.6 days, indicating inefficiencies in the
electronic invoicing process for Unilever.
Interpretation:

 Industries/Clients Benefiting from E-Invoices:

o Ayuntamiento de Alzira (Government): Huge improvement with E-invoices.
o CECA (Financial) and Repsol (Energy): Significant improvement with E-invoicing.
o GM (Automotive): Great improvement in payment delays with E-invoices.
 Industries/Clients Facing Issues with E-Invoices:
o Kelloggs (Food): E-invoices are paid much slower compared to paper invoices.
o Colgate (Consumer Goods) and Unilever (Consumer Goods): E-invoices show slower
payments, which could indicate challenges in adopting electronic invoicing for consumer
goods companies.
 Mixed Performance:
o HP (Technology) and BMS (Pharmaceutical): Minor differences in payment delays,
indicating that E-invoicing does not drastically impact payment speed in these sectors.

Recommendations:

Overall, financial, energy, and automotive sectors seem to benefit more from electronic invoicing,
while consumer goods and food sectors show notable delays with E-invoicing. These industries might
need further process optimization to fully leverage the benefits of electronic invoicing.