Gartner Says Business-to-Business Internet Billing to Triple by End of 2002.(Brief Article)

According to a recent Gartner Group, Inc. study, the number of companies sending out business invoices over the web will nearly triple by the end of 2002 to 26 percent, up from today's 9 percent. By the end of 2004, this number is projected to rise to 35 percent. Business-to-business electronic invoicing and payments (EIP) will dramatically reduce the current 41 day average time to collect payments, allowing companies to reduce debt and invest cash more quickly.

"Three times more companies sell products or services over the Internet than invoice customers using Internet channels," said Avivah Litan, research director at Gartner. "The primary challenges will be convincing buyers to give up their checks in order to take advantage of Internet payment benefits."

According to Gartner, EIP will enable 10 key business process improvements:

Improved Payment Services -- Automatic application of payments to accounts receivable, online payment guarantees and multicurrency payment management will all be possible with EIP. Currently, sellers receive one payment for every three invoices sent through tradition al channels.

Reduced Billing Costs -- According to the Gartner study, companies expect to lower the typical cost of producing a paper invoice from $5 to $1.65 for an electronic invoice, by reducing labor, postage, paper and equipment costs. The cost of manually resolving an invoice dispute is also expected to decrease from $20 per call to $10 per dispute that is handled electronically. Other more significant savings come from streamlining accounts payable and receivable system processes and ultimately reducing inventory.

Links With Shipping and Logistical Systems -- Linking EIP with logistical systems will enable the automatic triggering of a payment once buyers receive their goods.

Improved Financing Services -- More than 60 percent of the companies surveyed finance sales using the open account method, so automation that ...