On top of the world in e-invoicing: Finland’s success story

Why is Finland constantly ahead of the global game when it comes to e-invoicing, and how do Finland’s roughly 250 000 micro-entrepreneurs benefit from it? Let’s hear from the experts what other nations could learn from the Nordic rock star of e-invoicing.

“It’s hard to imagine going back to the old way of sending and paying invoices,” says Aki Rouvinen, a Finnish entrepreneur importing construction materials from Europe. “The amount of time and money you save is significant.”

When it comes to e-invoicing, Finland is an international star (and, perhaps not coincidentally, the home country of Zervant). According to statistics by the Bank of Finland, a total of 330 million electronic invoices were sent in the country in 2017.

“E-invoices are much more prevalent in Finland than anywhere else in the world in relative terms,” notes Bo Harald, known as the creator of online banking in Finland and awarded as one of the most influential technologists of the 20th century by Institutional Investor. “There has been a time when Nordea had more e-bank payments than any other bank and Finland more e-invoices than any other country in absolute terms, too, but now much larger countries have taken over.”

Harald has been involved in the development every step of the way. In his view, Finland’s success story has been – and continues to be – a long process that requires large networks and close co-operation between banks, governmental institutions and private companies.

The networks include smaller players that have entered the market to offer services for specific target groups. Companies like Zervant have disrupted the market complementing the offering for invoice senders, whereas the invoice receipt traditionally has been monopolised by established banks.

Mattias Hansson, CEO and Co-Founder of Zervant, believes that one of the key success factors has been that Finland created standards that ensured interoperability between systems and e-invoicing networks.

“Also, Finland invested early in the e-invoicing industry, several years before it was regulated through an EU directive.”

It’s about the money, money, money

One of the most important reasons for the keenness to promote e-invoicing is simple: money. The potential savings are immense not only per company but also nationwide.

“The Confederation of Finnish industries has calculated annual savings worth up to 2.8 billion euros for companies, the State Treasury has added a total of 150 million in the government sector, and The Association of Finnish Local and Regional Authorities another 150 million for local municipalities,” Harald explains. “This can lead to over three billion euros in savings nationally every single year.”

However, the developers of e-invoicing wanted to make sending an invoice just as easy as paying it. This was enabled by a shared standard, known as Finvoice and the well interoperable TEAPPS standard.

“The aim was to make it possible for anyone with functioning fingers to send e-invoices,” Harald tells, “particularly Finland’s over 200 thousand micro-entrepreneurs.”

Harald points out that as the field has been wide open for all kinds of players, the competition has brought about opportunities for smaller fintech companies. For example, Zervant focuses on small businesses that often don’t have their own invoicing systems and software in place.

“The industry has traditionally focused mostly on public sector and large corporations but we have to remember that more than 90% of companies have less than 10 employees”, explains Hansson. “A significant amount of these micro companies are suppliers to the larger ones and are required to send e-invoices, but they were lacking the technical solutions for this. We created Zervant so that micro and small businesses get easy access to e-invoicing as well.”

Spreading the good news – and practices

With large corporations and public organisations demanding e-invoices from their subcontractors and regulations encouraging e-invoicing, Finland has been able to set an example to other nations.

Harald thinks that Finland is both big and small enough to be able to build sufficient networks and bring all parties to the same table. On top of this, as there’s been room for competition, development has been rapid with fintechs aiming to outperform each other. Elsewhere, standardisation and getting banks involved in the process has been slower.

“The transition can’t happen overnight,” Harald emphasises. “Finland’s ground-breaking work has happened step by step, and others should follow a similar pattern.”

With the concrete evidence of the benefits of e-invoicing and the EU regulations guiding the way, Harald predicts that within a few years, we won’t even be talking about electronic invoicing separately from other forms. Instead, e-invoicing will be the new normal and soon the only acceptable one.

“It won’t take too long. We have billions of reasons to believe that’s the case.”

Aki Rouvinen has also witnessed the rising popularity of e-invoicing in the construction business. Though there is still a long way to go. “We recently got a letter via traditional mail from one of our partners in Germany saying they are finally moving to electronic invoicing. To agree to this, I need to sign the form and fax it to them. But it is a step forward!”