For the first time, this report has been able to investigate in depth the effect of e-invoicing on SMEs’ access to finance.
Findings suggest that, while e-invoicing does not account for much of the advantage adopters appear to have when seeking finance, it does make access to alternative sources of finance (including invoice discounting and specialist export finance) significantly easier, particularly for smaller SMEs.
E-invoicing is still nowhere near dominant among UK SMEs; there is still no region in the UK where adopters account for more than one-fifth of SME turnover, and no sector in which they account for more than one-quarter.
The report hints at some of the influence of government policies; in Wales, for example, local councils’ intentions for adopting e-invoicing could be driving adoption rates.
Similarly, a significant bias towards e-invoicing adoption by firms just below the VAT threshold suggests that compliance concerns can be as much a driver as a barrier for e-invoicing penetration.
Much of the untapped potential for increasing penetration among SMEs may lie with the providers of key enabling technologies; this report has documented, for instance, the very close (and not entirely surprising) correlation between online business banking, online sales and e-invoicing adoption.