This item was originally posted by Stefan Foryszewski on his “The E-invoicing Blog”. Stefan Foryszewski is one of the founders of OB10. He is now responsible for Business Development at OB10 and sit on the main Board. He currently also supported the European Commission Expert Group on Electronic Invoicing.
Electronic invoicing (e-Invoicing) networks are helping to save business customers vast amounts of paper each year by completely eliminating the need for printed invoices. e-Invoicing networks help to simplify and streamline the invoice-to-pay process by extracting invoice data from a supplier’s billing system and sending it to their customer’s accounting system – eliminating the need to process, manually key-in, or store paper invoices.
The sending and receiving of paper-based invoices can cause organisations to waste high volumes of paper, due to the fact that invoices are often wrong or inaccurate. Industry figures suggest that anywhere between 8 and 20% of invoice transations regularly have errors in them. With e-Invoicing, this issue is avoided as the inaccuracy is picked up straight away in an electronic format so there is no need for sending paper duplicates; it even eliminates the late payment notification that is also sent out when problems occur.
Many companies worldwide – including HP, GM, Dixons Retail Group, GSK, Barclays, Kellog’s and others in the UK public sector – have adopted an e-Invoicing solution to save valuable environmental resources and improve their corporate responsibility mandates.
The numerous ways in which e-Invoicing can assist companies to improve their CSR and “green” credentials are impressive. Significant, measurable improvements can be made by switching to e-Invoicing, by reducing paper usage, fuel consumption, and storage space.
The amount of paper we waste each year is staggering; the UK consumes around 12.4 million tonnes of paper each year, and approximately 60-80% of all office waste is made up of paper, according to Envirowise. Paper invoicing significantly contributes to the UK’s office waste. Each invoice takes an average of 3 sheets of paper, which adds up to a lot of waste when the amount of daily transactions is taken into account.
Furthermore, the global impact of wasted paper is a serious concern. According to recent statistics, within 15 years some 20% of Africa’s forests will be gone. The World Conservation Union’s Red List has said that more than 12,000 species (out of 40,000 assessed) face the risk of extinction. This amounts to 1 bird species in 8, 13% of all flowering species and 25% of all mammal species being affected.
Paper invoicing also raises the issue of storage and ensuring implications for the environment. e-Invoicing removes the need for physical storage space, by providing digital copies of each invoice. Without it, however, each invoice must be archived for several years before being disposed of.
Reduction in fuel and energy usage is another of the key benefits of e-Invoicing. e-Invoicing dramatically cuts fuel consumption, and by doing so helps conserve limited fuel resources. OB10 has calculated that in the last year our customers have saved enough fuel to run the average home for over 290 years and over 34,000 pounds of air pollutants through their adoption of e-Invoicing.
By eliminating the need for printed invoices, e-Invoicing is addressing environmental concerns by helping to save trees, conserve energy, and reduce waste at the same time.
But there are sound business reasons for adopting e-Invoicing too. When companies switch to e-Invoicing, accounts also become more of a streamlined and simplified process. As a result, with the reduced hassle of manual tasks, transactional costs are also noticeably reduced, typically by 60%. By replacing printed invoices with electronic ones, companies can reduce their impact on the environment every single day, and in a number of different ways. e-Invoicing aims to help companies improve processing for themselves, but also to help them make a contribution in an effort to help the environment.
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I’m afraid that the environmental impact of paper in this post is highly misleading and inaccurate.
Encouraging customers to get their bills online and also stating that this is better for the environment is increasingly being questioned. In the past two months, faced with being reported to the Advertising Standards Association, (ASA), several very large nationally known UK organisations have stopped similar messages, having accepted they were being made without adequate research, contravening CSR Europe and CAP (Code of Advertising Practice) guidelines.
Whilst the efficiency of electronic communication is clear and initiatives to reduce waste are to be encouraged, the Two Sides organisation, which exists to explore the Myths and Facts concerning the sustainability of Print and Paper, and has members spanning the whole Graphic Communications Value Chain, is concerned that incorrect and damaging impressions are being given if ‘go paperless’ initiatives are promoted as ‘green’ or seek to gain credibility by purporting to aid sustainability at the expense of the print and paper industry.
It is increasingly clear that electronic communication and in particular the energy requirements of the increasing worldwide network of servers which are necessary to store all the information needed for immediate access, has a significant and increasing carbon footprint. Electronic document storage must be recognised as delivering efficiency but not sustainability. In the UK it has been suggested that PC’s and servers may consume up to 50% of household energy requirements in the next 10 years. Greenpeace has reported that electronic waste is the fastest growing waste stream and there are extremely serious disposal costs emerging.
All those who encourage customers to switch to e-billing, or any other form of electronic communication, largely to reduce costs, should re-examine their messages as it is certainly questionable whether e-billing or e-communication has a lower carbon footprint. In fact, with all the environmental costs of electronic communication and with many customers printing out their bills at home for reference, (a recent study has assumed this between 10% and 30 % depending upon whether you are a business or private consumer), at a possible higher environmental cost than a centrally produced and distributed bill, print and paper may well be the environmentally sustainable way to communicate.
Paper is a renewable and recyclable product that, if responsibly produced and consumed, is an environmentally sustainable media. It is often surprising to learn that in Europe, where 93% of our paper comes from, the area of forest has grown by 30% since 1950 and is increasing at a rate of 1.5 million football pitches every year.
And with 55% of the worldwide forest harvest being consumed for fuel and 34% for construction and other uses, only 11% is actually directly used for making paper.
So, if your organisation is using messages that e-billing, or any other form of electronic communication, is more environmentally friendly than traditional print and paper, please check that you have not only calculated your own savings but also accurately assessed and calculated the downstream consequential costs.
Misleading environmental claims are not only increasingly being examined by regulators but jeopardise the livelihood of the many thousands of people employed in the Graphic Communications Value Chain.
It is encouraging that responsible organisations are now thinking carefully about the statements they make and ensuring that they are not simply repeating old misconceptions.
So, perhaps a time to reflect on whether environmental claims have any place in advocating electronic channels?