I am working on an interesting ROI study and business case for an electronic billing project. The client is in South Africa and due to the troubled state of their postal service, the client has been forced to send their invoices to their customers via courier service. This service is expensive. The client came to us to learn how we could help them automate their invoice processing. They wanted a system that would permit them to do invoice processing electronically and compliant with the e-Invoicing laws of their local tax authorities.
Implementing e-Invoicing and electronic billing are common requests, but reducing courier service fees as part of the ROI is a first.
Typically the savings would come from the following:
- Reduced Days Sales Outstanding (DSOs)
- Reduce Cash Conversion Cycles
- Best In Class – 5x Faster at converting Sales into Cash
- Faster Dispute Resolution
- Compliant with tax authorities
- 60% Print & Postage Reduction –from $5 to $2 (Gartner)
- Lower Call Center Volumes
–Up to 60% of calls relate to invoice disputes
Some of the requirements for using e-Invoicing in South Africa are:
- Authenticity and integrity can be guaranteed by Advanced e-Signature
- The customer needs to agree to receive electronic tax invoices (explicit, in writing)
- Outsourcing the issuing (e-Signing) to a third party is possible
- No specific invoices format requirements – and presenting an invoice in .pdf format on a website is considered as electronic invoicing in South Africa
- Archiving (sender and receiver) must be in electronic format (for 5 years) and can be abroad (prior notification to tax authority is recommended)
- Statutory Background (http://www.sars.gov.za):
•VAT Tax act 89 of 1991, section 16,20, 21, 55 and 57
•VAT Practice Note 2 of 25.9.91 (self-invoicing)
•VAT 404 VCAT guide for Vendors (2004 ed.) pager 56 (EDI)
•VATNEWS 20 – Sept 2002
