E-invoicing and Small Business

E-Invoicing and Small Business – A Study of Half a Million Invoices

The EU is close to publishing its final standard on electronic invoicing, which it hopes to make the dominant form of invoicing in Europe by 2020. When you consider that 99% of all businesses in Europe are small businesses, it’s fair to say that the way SMEs invoice is set for some dramatic changes in the next few years.

Despite this, not much has been written about small businesses and e-invoicing. Most studies tend to focus on bigger businesses, whilst microbusinesses and sole traders have been largely overlooked.

This poses a few obvious questions:

  • Do small businesses use e-invoicing?
  • Does it help them get paid quicker?

Zervant provides free invoicing software for small businesses all over Europe, so of course it’s a topic we’re interested in. We decided to analyse our own data to see if we could find some answers.


To do this we set about gathering information on invoices sent by Zervant users based in Finland, going back as far as 2015. We chose Finland for the study because it’s a global leader in e-invoicing, and the technology is widespread here. This meant we had more data to look at, and hopefully provide some meaningful answers.

Half a million invoices

All in all we’ve analysed data from 500,000 invoices, all sent by sole traders and microbusiness owners.

In this study, we’ve tried to answer the following questions:

  • What percentage of invoices are sent as e-invoices? Has this changed over time?
  • Do e-invoices get paid quicker than “normal” invoices?
  • Are higher value invoices more likely to be sent as e-invoices?

First, a few definitions

If you’re well versed with e-invoicing then you can skip this part and jump to the ‘Results’ section. Otherwise it may well be worth taking a moment to go through these explainers.

What is e-invoicing?

The first thing to note is that electronic invoicing is NOT the same thing as emailing a client an invoice, or sending them a PDF attachment. E-invoicing, simply put, is a type of invoicing where no human interaction is required. Information flows automatically from seller to buyer, machine to machine, in a pre-defined format (such as EDI or XML).

With the likes of email or PDF, human intervention is still needed to download and/ or print the invoice, but with e-invoicing the process is fully automated. If you’d like to find out more take a look at our infographic on e-invoicing.

Benefits of e-invoicing

How can e-invoicing help small businesses?

Technology is all about making our lives easier, and e-invoicing is no exception. In the long run it helps save both time and money – up to 4.5 minutes and £5.50/ €6.50 for the sender, and up to £22/ €25 for the receiver,  per invoice. But for small businesses it is perhaps most useful when it comes to fraud.

The average small businesses currently loses over £1,600 a year (€1,900) due to invoice fraud, a number that looks set to rise in the next few years. This fraud can be done in many ways, and includes viruses in email attachments, duplicate invoices, or invoices sent from unknown suppliers.

E-invoicing tackles this problem as only preapproved suppliers are able to send their customers invoices, all of which are validated before being paid.

Results of the study

We decided to split the the invoices into two groups, B2B and B2C. This is because e-invoicing is already widespread in the B2C market in Finland (most utility, phone and other consumer bills, for example, are already sent in this format). What was of most interest to us was the B2B segment.

Of the 500,000 invoices analysed it turns out approximately half were B2C invoices, and half B2B. All of the analysis below focuses on this B2B segment, so some 250,000 invoices.
First up we took a look at what percentage of these invoices were sent as e-invoices. We looked at a monthly average from January 2015 up until March 2017.

E-invoicing Study in Finland

The Y-axis shows what percentage of invoices were sent as e-invoices, the X-axis plots the individual months. As you can see from the graph the number has stayed fairly consistent, with an average of 23% of invoices sent as e-invoices (shown by the black dotted line). In other words almost one in four invoices.

One of the main challenges that small business owners face is getting paid on time. Late payment can have a really negative effect on cash flow, and in the worst cases lead to a business going under. So over and above time and cost saving benefits, we also really wanted to know if using e-invoicing is helping entrepreneurs to get paid faster.

To do this we grouped the B2B invoices by month, and looked at data going back to the start of 2016, continuing up until March 2017. We split invoices into two groups, those sent as e-invoices, and those sent as ‘normal’ invoices (eg. all other formats).

Here’s our results (for ease we’ve only included the average for each group over the 15 month period). E-invoices and late payment graph

The number of “normal” invoices paid on time was around 65%, but with e-invoices the number went up to 74%, in other words a difference of 9% points.

As part of our study we were also able to look at the amounts invoiced, and to see if this had any correlation to e-invoicing. When small businesses invoice larger amounts, are they more likely to send them as e-invoices?

Looking at data from the start of 2016 up until March 2017, we grouped all invoices together based on their value, and looked at the percentage that were sent as e-invoices in each group. Invoices were grouped by value at thousand Euro intervals eg. 0 – €1,000, €2,000 – €3,000, all the way up to €10,000.

Invoice Value vs. E-Invoice

One problem with this data is that it doesn’t show you the spread of invoices per value group. So it’s impossible to know what percentage of all the invoices analysed fall into each group. Given that we’re analysing data for microbusinesses and sole traders, a logical assumption would be that the majority of invoices are in the lower value groups.

By checking our data we actually found that 70% of all invoices analysed fell into the €0 – €1,000 group, and that 15% of all invoices in this group were sent as e-invoices. By removing this group and then re-plotting the graph, we got the following.

Average by Invoice Value

The bars in this graph represent each value group, starting from €1,000 (as with all the graphs in this post, you can click on the image to make it bigger). The green/ teal shows the total number of e-invoices sent in each value group, the black the number of “normal” invoices. The red line plots what percentage of invoices were sent as e-invoices in each group.

As you can see, when taking into account total volumes, the graph still shows that there is a marked increase in the percentage of invoices sent as e-invoices as the value increases (and given that we’re looking at the microbusiness segment, it also follows that there are higher volumes of the lower value invoices).

But it’s clear that the higher the value, the more likely an invoice is to be sent electronically. So it’s fair to assume that small businesses see e-invoicing as a safer, more reliable way to get paid.


Microbusinesses are often late adopters when it comes to big technological changes (and e-invoicing is no exception). But our study shows that e-invoicing is already fairly well used in this segment (almost one in four of all B2B invoices).

Granted, we are only looking at Finland, which is one of the global leaders in this space. Nonetheless it does prove that the technology is of use to microbusinesses, and that provided they have the means to send e-invoices (eg. an affordable, easy to use system), then they will.

Over the next few months we’ll be doing several more studies that look at small business invoicing habits, so if you found this one interesting make sure you stay tuned!

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