SaaS eliminates the need for hefty upfront investments. Unlike on-premise solutions, which require substantial capital for licenses, hardware, and infrastructure, SaaS uses a subscription model. This ensures cost predictability and accessibility, making advanced software available to businesses of all sizes. Outsourcing software maintenance and infrastructure management allows companies to focus on core activities, fostering innovation and strategic growth.

With SaaS, software updates and maintenance are handled by service providers, ensuring access to the latest features and security patches. This saves time and resources, enhancing performance and security. SaaS applications can be quickly deployed, enabling rapid implementation of new tools and functionalities for a competitive edge.

SaaS offers streamlined user support with cloud-based accessibility, efficient remote assistance, and prompt issue resolution. This leads to higher user satisfaction and productivity. Monitoring tools for software performance enable proactive identification and swift resolution of potential issues, minimising downtime. SaaS support teams also prioritise data security, addressing security concerns and compliance inquiries promptly.

SaaS solutions are designed for scalability. As businesses grow, they can easily adjust subscriptions to meet increased demands. This flexibility allows organisations to optimise costs by paying only for the resources they use.

By now, the vast majority of businesses have at least some digital elements in play when it comes to billing. This includes the use of accounting or customer relationship management (CRM) platforms for invoice generation and managing reminders. Or it could be as simple as pulling up ready-made templates from Google Drive as and when required.

However, true digital invoicing – aka e-invoicing – goes several stages further than this. This refers to a system whereby invoices are issued, transmitted, received, processed and stored automatically in a structured format.

Despite its business advantages, e-invoicing is one of those areas that often remains underexplored by finance leaders. For some, it’s a case of wait and see on the compliance front; a reluctance to take action until HMRC makes further inroads on mandated digital invoicing. For others, there’s a realisation that e-invoicing could well result in significant benefits to the business, but an overhaul of invoicing processes is considered too much of a hassle to contemplate.

So, are you missing an opportunity by not taking action in this area? What are the stumbling blocks to digital invoicing adoption – and how can they be overcome? Here’s how the land lies in 2024…

As our introductory guide explains, with e-invoicing, invoices are issued and transmitted in a standardised, machine-readable format – very often XML (Extensible Markup Language). This structured format characteristic means that invoice data can be read, captured, extracted, and acted upon automatically by buyers’ and sellers’ accounts solutions without the need for human input and without interoperability issues.

The same technology also allows key information to be automatically captured and logged with third parties – hence why tax authorities are big fans of it. If you make digital invoicing compulsory and combine it with an e-reporting requirement, you can capture details of all transactions at the point when an invoice is generated, thereby significantly reducing leeway for VAT fraud and error.

So far, more than 50 countries – including France, Spain, Italy, and Germany – have started implementing compulsory e-invoicing. Various countries – including those within the EU – are at different stages, but the rollout process is similar in each case: a mandate for B2G transactions in the first instance, followed by B2B (the timetable for implementation is usually dependent on the size of the company). Some countries (Italy, for instance) have extended the requirement as far as B2C transactions.

The UK is barely out of the starting blocks on this. If you supply to the NHS, e-invoicing is mandatory. Furthermore, there’s a general requirement for public authorities to receive and process digital invoices if their suppliers want to use them. Other than that, e-invoicing is not mandatory at either B2G or B2B level.

However, the direction of travel is pretty clear. HMRC’s overarching ‘Making Tax Digital’ strategy is focused squarely on reducing the tax gap, with a clear emphasis on “bringing the tax system closer to real-time”. In this context, it is generally accepted that it is only a matter of time until HMRC turns its attention to e-invoicing.

For businesses involved in cross-border transactions, there’s an obvious need to keep a close eye on the new requirements that are coming thick and fast throughout Europe and globally. This includes the need to comply with whatever invoice formatting requirements and required fields are stipulated by various tax regulators.

But even if this cross-border element is not relevant to your operating model, as Millennium Consulting’s digital invoicing guide recently highlighted, the wider business benefits of e-invoicing are compelling. This includes the possibility of being paid quicker, with less admin, a lower carbon footprint, lower costs, and fewer errors – not to mention stronger client relationships.

One of Millennium Consulting’s customers reports using their digital invoicing solution to post hundreds of invoices per minute while also automating in the region of 95% of the invoices they receive from their suppliers. More widely, digital invoicing has been reported to result in a reduction of cycle time by 65%, processing cost by 30-90%, and an improvement of on-time payment by 15-59%.

You could wait until a mandate arrives before considering e-invoicing adoption. Or you could start realising these benefits much sooner.

Some of the concerns about e-invoicing that we encounter most often include the following:

• Local compliance and customer preferences. The various countries we do business in have various and often very different e-reporting requirements in play. Alongside this, different clients have their own standards and preferences for formatting and required fields. Will we need a bunch of different solutions and processes for different contracts?
• Internal interoperability. Will any new e-invoicing solution be able to work with our existing accounting and/or ERP software?
• Cost. Will e-invoicing mean significant extra outlay?
• Operational disruption. Should we expect cash flow issues if we switch from our existing process to a new one?
• Buy-in. Will any new system be easy-to-use for both internal staff and customers?

As Deloitte stressed in its 2024 global insurance outlook report, “merely reacting to risks and challenges is no longer good enough”. Most insurers are either undertaking – or thinking about undertaking – transformation efforts with a very clear aim in mind: namely, preventing losses happening in the first place.

This transformation typically involves adopting new technologies, including advanced analytics, to extract actionable insights from growing volumes of data. To react rapidly and make the right decisions, savvy insurance finance leaders also realise that they need a joined-up picture of performance; making the reduction of data silos a particularly important priority.

Here’s a closer look at some of the insurance sector’s most pressing current concerns, and at how these are directly shaping transformation initiatives.

IFRS 17 was billed – understandably – as a “once-in-a-generation” regulatory shift. New accounting and reporting methodologies demanded a raft of new calculation capabilities, as well as the ability to validate and utilise vast amounts of data at a granular level.

For the majority of insurers, IFRS 17 implementation meant an overhaul of processes and technologies. Many considered this to be the ideal opportunity to modernise their wider processes and boost their decision-making capabilities.

However, as our recent article highlighted, the majority of insurers have discovered that the IFRS 17 compliance journey has been harder than first envisaged. As KPMG explains, “[The] focus quickly narrowed to achieving compliance by meeting regulatory deadlines and getting back to business as usual. The initial vision of a transformed function was lost”.

The smart move for insurance finance leaders is to get that vision back – and build on the changes they have implemented already; as EY puts it, to “Think big, start small, and realize incremental value”.

One way of looking at this is to consider what capabilities you need to get a better handle on your compliance obligations, alongside the capabilities needed for better decision-making. Questions worth asking include the following:

• What critical information is needed – not just for regulatory reporting – but also to enable senior executives to better understand business performance and make key decisions?
• How do we develop a commonly-defined set of performance metrics, drawing from common data sources?
• How do we break down barriers across functions, policy areas, and branches, to establish common goals, and enable us to get a joined-up picture of performance?

In the US, 2022 was the eighth consecutive year featuring at least ten catastrophes, causing over $1 billion in losses. As Lloyd’s of London illustrates, absolute climate-related insurance losses are rising, driven by an increase in exposure in climate damage-prone areas. Economic factors such as inflation and supply chain disruptions also exacerbate losses; most notably through rising rectification costs.

When a major event looms on the horizon, what are its likely implications in terms of operational costs, cash flow, and profits? How do we provide appropriate coverage to customers without exposing the business to unacceptable levels of risk? Are we overexposed in particular areas?

EY found that “agility to adapt to continuous change” is the single most important ingredient for successful finance leaders and their teams. Insurance executives need the ability to act fast and make the right decisions when potentially catastrophic events occur. But rather than being constantly on the back foot, they also need to identify ways to increase business resilience, such as identifying ways to reduce operational costs, or in deciding where to focus customer acquisition efforts.

So how does this translate into action? What capabilities should be on every finance leader’s wish list? We would suggest the following:

• The ability to capture, collate and consume data from right across the business, including operational and policy-level information.
• An ability to integrate external data streams (e.g. weather patterns, IoT devices, government databases, supply chain partner information), alongside internal data.
• A move from reliance on static reports (which become quickly out-of-date when conditions change) to dynamic planning. When internal stakeholders have questions, finance should be able to drill into the data and produce reliable, evidence-backed answers – at speed.
• Multi-scenario and what-if analysis. No matter how comprehensive the data at your fingertips, there is rarely a single, simple answer to a complex question! It’s a case of weighing up options. This is why insurance finance leaders should prioritise the development of predictive analysis capabilities combined with driver-based and multi-scenario planning. You should be able to ask ‘what if?’, alter variables to consider multiple possible sets of circumstances, and make better-informed decisions on possible courses of action.

Whether it’s Solvency 2, IFRS 9, IFRS 17, LDTI or emerging ESG standards, all recent regulatory initiatives have at least one thing in common: the emphasis on transparency. This has two important implications for how your data is managed.

The first relates to access to data at a granular level. IFRS 17 is a prime example of this: it’s going to be pretty much impossible to maintain compliance unless you have the ability to collate, validate, and utilise vast amounts of data, right down to policy level.

The second relates to silos. If underwriting, risk, operations, and finance all have their own datasets and function-specific rules in play for recording, processing, and reporting data, it becomes even more difficult to deliver the type of clear, accurate, and consistent information required by regulators.

But if you look beyond compliance, the wider business case for reducing silos and improving access to granular data is clear. Consider pretty much any challenge faced by the insurance sector at present; volatile costs, geo-political disruption, and climate-related risks being three notable examples. The impact of these challenges is not limited to specific policy books or divisions. It affects the entire business.

Strategising in the context of these types of challenges demands a new approach to planning. Reliance on top-line data won’t suffice – and nor will silos. In their place, you should seriously consider establishing one trusted source for all data – meaning that everyone is on the same page, and everyone trusts the numbers.

The end goal should be real-time visibility, and the ability to create and amend dynamic plans, budgets, and forecasts. Drilling into granular data where necessary, you should be able to weigh up your options when new circumstances arise, choose the most appropriate course of action, spot new opportunities – with insights on the full impacts of your actions across all corners of the business.