Prepared for the Canada Revenue Agency
Supplier name: Sage Research Corporation
Contract number: # 46637-227534/001-CY
Contract value: $68,921.98 including HST
Award date: March 22, 2021
Delivery date: June 2021
Registration number: POR 138-20
For more information on this report, please contact the CRA at: cra-arc.media@cra-arc.gc.ca
Ce rapport est aussi disponible en français.
Final Report
Prepared for the Canada Revenue Agency by Sage Research Corporation
May 2021
TThe Canada Revenue Agency (CRA) commissioned Sage Research Corporation to conduct a qualitative public opinion research study with small and medium size businesses regarding e-invoicing. The CRA will use this research to inform the assessment of feasibility for the adoption of an e-invoicing policy measure for standardized e-invoicing for Canadian markets.
Ten online focus groups were conducted between April 22 and May 5, 2021, with two groups in each of the following regions: East, Quebec, Ontario, Prairies, and B.C. Five focus groups were conducted with Small Businesses and five with Medium Business.
Permission to Reproduce
This publication may be reproduced for non-commercial purposes only. Prior written permission must be obtained from the Canada Revenue Agency. For more information on this report, please contact the Canada Revenue Agency at: cra-arc.media@cra-arc.gc.ca
Catalogue Number: Rv4-152/1-2021E-PDF
International Standard Book Number (ISBN): 978-0-660-40338-0
Related Publication (Registration Number: POR 138-20)
Catalogue Number : Rv4-152/1-2021F-PDF (Final Report, French)
ISBN : 978-0-660-40340-3
© Her Majesty the Queen in Right of Canada, as represented by the Minister of National Revenue, 2021
Cette publication est aussi disponible en français sous le titre : Étude de faisabilité sur la facturation électronique de la taxe de vente – Recherche qualitative
The Compliance Programs Branch of the Canada Revenue Agency (CRA) has launched a multi-year initiative to examine the feasibility of adopting e-invoicing standards and technology that integrates with our tax system. Electronic invoicing (e-Invoicing) refers to the automated exchange and processing of invoice-related data between suppliers and buyers in a structured electronic format. It encompasses the transmission of data from the supplier in a manner that can be integrated into the buyer’s Accounts Payable (AP) system without requiring data input from the buyer’s AP administrator. E-invoicing is regarded as an integral part of efficient financial supply chain management, optimizing the end-to-end process of Business-to-Business (B2B) and Business-to-Government (B2G) transactions, linking the internal enterprise processes to payment systems.
The focus of the CRA’s E-invoicing Initiative is to evaluate how e-invoicing can benefit businesses through efficiencies, as well as to improve sales tax compliance, deter participation in the underground economy, and improve the taxpayer experience. It aims to advance thinking as to how the CRA can shift the focus of its compliance approach from relying on taxpayer completed tax returns and post-filing strategies to include the use of real-time/near-real-time data from business transactions via modern technologies.
The objectives of this research were to:
Results from the research will inform the assessment of feasibility for the adoption of an e-invoicing policy measure for standardized e-invoicing for Canadian markets, including providing input:
Ten two-hour online focus groups were conducted between April 22 and May 5, 2021, with two groups in each of the following regions: East, Quebec, Ontario, Prairies and B.C. The target group was small (less than 10 employees) and medium (10 to 249 employees) businesses. To qualify, the business had to send 20 or more invoices per year or receive 20 or more invoices per year. There were four to seven participants in each group, for a total of 59 participants. Participants were paid an honorarium of $175.
This research was qualitative in nature, not quantitative. As such, the results provide an indication of participants’ views about the topics explored, but cannot be statistically generalized to represent the full population. Qualitative research does, however, produce a richness and depth of response not readily available through other methods of research. It is the insight and direction provided by qualitative research that makes it an appropriate tool for exploring participants’ knowledge and opinions with respect to e-invoicing.
None of the participants used e-invoicing in the sense explored in this research (i.e. electronic data interchange between a buyer’s accounting system and a seller’s accounting system).
The number of invoices sent and received varied widely across participants. The numbers sent/received tended to be substantially smaller for small business participants compared to medium business participants, although there was some overlap in the ranges.
The use of email for sending and receiving invoices was widespread and extensive. Quite often the invoice is an attachment to the email, but it may also be in the form of a link which also gives the recipient an option to pay.
Mailed invoices are relatively uncommon, and none of the participants send or receive the majority of invoices via mail. This suggests that communication about e-invoicing should focus more on comparisons to emailing invoices than to mailing invoices.
Paper invoices may accompany delivery of goods, although this is not always the case. Sometimes only a tracking slip accompanies the delivery and the invoice is sent separately by email. There can also be paper invoices or receipts from goods purchased from local retailers.
There were two mechanisms used by some participants for direct entry of invoice data into a buyer’s accounting system: (1) some participants had large companies as customers who required invoices to be entered in an online portal, and one participant appeared to use a portal to receive invoices; (2) several participants used a third-party service to scan invoices and transmit the data into their accounting system.
The most time-consuming phase of sending an invoice is compiling the data driving the invoice amount and content. The most time-consuming phase of processing an incoming invoice is checking and approving the invoice, although the time required can vary widely from minutes to much longer. The time to manually enter invoice data was typically described as being "minutes."
Almost none of the participants were aware of e-invoicing in the sense intended in this project. When asked whether they thought they were using "electronic invoicing" or "e-invoicing", almost all thought they were because of their extensive use of email for invoicing. This indicates that from a communications perspective, the phrase "e-invoicing" is highly prone to be interpreted as something very different from what is intended in this project.
In order to get informed reactions to e-invoicing, participants were given a presentation on what e-invoicing is, how it works, and how to implement it.
Immediately following the presentation, there was a vote on how many would consider using e-invoicing in their business. Note that the question referred to "consider using e-invoicing", not the stronger "would you use e-invoicing."" Overall, about one-quarter of small business participants said they would consider it, and about half of the medium business participants said they would consider it. Quite a few of those who would consider using e-invoicing had some reservations, so it was not always a purely positive assessment of e-invoicing based on the information provided.
Qualitatively, the best predictor of likelihood of being interested in considering e-invoicing was number of invoices received per year: the more invoices received, the more likelihood of interest. This helps to explain the higher proportion of those interested among medium business participants compared to small business participants.
Following discussion of perceived benefits and concerns with e-invoicing, participants were asked again about their overall interest in considering using e-invoicing in their business. There was little change in overall interest. In some groups, the question was posed with an added condition, namely to assume that use of e-invoicing is widespread in Canada. This was added because one of the reasons quite a few gave for lack of interest was a belief that there is little value to using e-invoicing if most other businesses are not using it. Adding the condition resulted in a small increase in interest. The fact that adding this condition had only a relatively small effect indicates there were other significant perceived issues with e-invoicing.
Participants were asked on an open-ended basis what if any benefits they thought e-invoicing might provide to their business. This was followed by presentation and discussion of five types of benefits:
Increases cost savings
Improves payment times
Reduces fraud
Connect once, trade with many
Encourages trade
On an unaided basis, the primary reason for interest in considering using e-invoicing was that it could reduce time spent on manually entering data from incoming invoices. This is related to the aided benefit, Increases cost savings. Some participants did not think this benefit was meaningful for their business: they did not think that at their invoice volume the cost savings would be significant, and it was suggested this would be a more significant benefit for larger companies that receive large numbers of invoices.
On an unaided basis, some participants thought e-invoicing might facilitate payment of invoices. This was also the point of the aided benefit, Improves payment times. Reasons for perceiving the possibility of faster payment times included: elimination of the time between invoice receipt and data entry; elimination of some invoices getting lost; psychological impact in that the recipient knows that the sender knows that the invoice has been received and entered into the accounting system. The main reason the majority of participants said they did not think e-invoicing would lead to faster payment times was because they believed that what drives payment times are (a) payment terms – either as stated on the invoice or based on the payer’s payment practices, and/or (b) the payer’s cash flow and whether they have the money to make the payment.
E-invoicing was generally not perceived to offer a significant benefit in terms of sending invoices, with one exception associated with facilitating payment of invoices. Some participants said that as a sender it is good to have certainty that an invoice has been received and entered in the accounting system of the buyer. While this might or might not result in more rapid payment, it at least eliminates "lost invoices" as a reason or excuse for nonpayment.
The remaining three aided benefits did not really come up on an unaided basis – i.e. Reduces fraud; Connect once, trade with many, and Encourages trade.
There were two main reasons some participants gave for why Encourages trade would not be a benefit to their business: their business is domestic and does not trade with other countries, or they already do business with other countries and their current systems work well for this purpose.
Lack of widespread use of e-invoicing: One barrier to interest in considering using e-invoicing mentioned by quite a few participants is the current lack of widespread use in Canada. Their point was that if most or all of the businesses or organizations they deal with do not have e-invoicing, then there is no benefit to using e-invoicing and therefore no reason to pay to get e-invoicing.
Current system works fine: Those not interested in considering using e-invoicing quite often commented that how they handle invoicing now works fine, and they do not see any significant added value to using e-invoicing. This suggests a challenge will be how to convince these businesses there is a benefit to e-invoicing. This will particularly be a challenge for businesses that receive a relatively low volume of invoices, as the primary driver of interest in e-invoicing was more efficient processing of incoming invoices.
Participant concern about impact on checking incoming invoices: Some participants were quite concerned that e-invoicing would adversely affect the processes for checking and approving incoming invoices. Current checking and approval processes start with an actual invoice, but with e-invoicing the starting point is invoice information already entered into the accounting system. The concern was that errors in invoices might go undetected and such invoices could end up being paid. Essentially, these participants were concerned that invoices received via e-invoicing would go directly into accounts payable, without review or approval. Some noted they would need to build in new processes for checking and approving invoices. For example, one participant suggested the accounting system would need a "holding tank" for incoming invoices in order to allow for review and approval prior to going into accounts payable. These results suggest that communication about e-invoicing should address how checking and approval of incoming invoices can be accomplished and in an efficient fashion.
Participant concern over changing an invoice already sent or received: Some participants were concerned that with e-invoicing it could be difficult or overly time-consuming to change an invoice sent or received when, under e-invoicing, it has already been entered into the accounting system. Essentially this concern is related to the previous point about detecting errors under e-invoicing: if an error is detected, the concern is then how difficult will it be to correct the error. These results suggest communication about e-invoicing should address not only how invoices can be checked and approved in an efficient manner, but also how changes to invoice information can be made in an efficient manner when necessary.
Participant concern over e-invoicing network security: As noted above, some participants were concerned the e-invoicing network could be hacked, and indeed several suggested these networks would be an attractive target for hackers. This suggests that a communications challenge will be to convince businesses that the networks are secure, particularly in a news environment where stories about systems being hacked are not uncommon.
Participant concern over accuracy of coding of cost categories: A few participants were concerned about how accurately costs on an invoice will be categorized in the accounting system, given that no one is manually entering the data and assigning costs to categories.
Impact of the subscription cost for e-invoicing: In the presentation given to participants about e-invoicing, participants were told that typical costs for small businesses would be $15-$30 per month, and typical costs for medium businesses would be $40-$65 per month. Overall it appears that cost by itself was not a big issue. Participants who were interested in considering using e-invoicing did not complain about the cost. Some of those not interested did say the cost was too high, but our impression is that the issue was not really on the cost side but on the perceived "value for money" side. That is, they saw little or no benefit to using e-invoicing, and so really were objecting to paying anything at all for it.
A small number of participants believed that the only way to get to widespread adoption of e-invoicing would be for government to mandate it be used.
A few participants suggested that if large companies could be encouraged to adopt e-invoicing, then smaller companies that deal with those companies would be motivated to adopt e-invoicing.
Many participants essentially suggested making e-invoicing free, or at least very low cost:
Some participants suggested somehow incentivizing the accounting software/service vendors to promote use of e-invoicing among their business customers. This might include incentives to encourage them to offer a free trial period, or more generally a low cost.
In a brief presentation to participants about the CRA’s interest in e-invoicing, there was a reference to reducing GST/HST reporting burden. In this context, some participants said this would be a good thing. However, some other participants were less positive. Their reasons included:
Contract value: $68,921.98 including HST
Political Neutrality Certification
I hereby certify as Senior Officer of Sage Research Corporation that the deliverables fully comply with the Government of Canada political neutrality requirements outlined in the Communications Policy of the Government of Canada and Procedures for Planning and Contracting Public Opinion Research. Specifically, the deliverables do not include information on electoral voting intentions, political party preferences, and standings with the electorate or ratings of the performance of a political party or its leaders.
Rick Robson
Vice-President
Sage Research Corporation
This section describes the process for creating, sending and receiving invoices. The following are summary observations on the results:
None of the participants used e-invoicing in the form explored in this research (i.e. electronic data interchange) to send invoices.
The estimated number of invoices sent per year varied widely among those who offered an estimate. Among small business participants, over half sent 100 or fewer invoices per year, and over three-quarters sent 500 or fewer invoices per year. Among medium business, over two-thirds sent 100 or more invoices per year, and about half sent 1,000 or more invoices per year.
Most participants created invoices using accounting or invoicing software or an online service, including several who sometimes used software or a service and sometimes created invoices manually (i.e. using word processing software or a spreadsheet). Several participants did not have any in-house software or service, and created all invoices manually. Note that in order to use e-invoicing to send invoices, the sender needs to use a compatible software or service to create the invoice. Compatibility of software/services with e-invoicing is still developing in Canada, but the results indicate that most participants could potentially use e-invoicing to send and receive invoices, provided that their software/service vendor implements support for e-invoicing.
The following are some observations on the software/services used:
Email was widely and extensively used to send invoices. All of the participants at least sometimes used email to send invoices, and even when other methods were used to send invoices, email was the method used most often. With regard to how email was used to send invoices:
Some participants (all medium-size business) said they sell goods or services to a large company that requires them to use an online portal to input invoices. This method is interesting in that it partially replicates what e-invoicing does – i.e. invoice information is entered directly into the buyer’s accounting system. These participants commented that they did not like using these portals. Reasons mentioned included: takes more time than creating a regular invoice, have to do the work twice – once to create it for oneself and again to enter the information in the portal; lack of flexibility for dealing with changes; was required to pay a monthly fee to use the portal.
With regard to other methods of sending invoices:
Participants were asked what is the most time-consuming aspect of creating and sending invoices. For almost all it was the process of compiling the information that drives the invoice content and dollar amount. The time required can vary depending on the complexity of the invoice (e.g. number of line items) and how automated or organized the record-keeping is for the information that needs to be provided. Other time-consuming aspects, each mentioned by one or a few participants, included:
Some participants commented that sometimes they include supporting attachments with an invoice. In the later discussion of e-invoicing, this was not raised by any participants (nor was it probed), but we mention it here because this could come up as a question among businesses considering adopting e-invoicing.
None of the participants used e-invoicing in the form explored in this research (i.e. electronic data interchange) to receive invoices.
The number of invoices received per year varied widely among those who offered an estimate. Among small business participants, most received less than 500 invoices a year, and about two-thirds received 100 or fewer invoices. Among medium business participants, most received 100 or more invoices per year, and about a third received 1,000 or more invoices per year.
All participants receive invoices by email, and for almost all this is how they receive most of their invoices.
When an invoice is received, there is typically some sort of checking or verification, and manual data entry. The checking/verification may be minimal for simple invoices from trusted suppliers, or more time-consuming for more complex invoices. For example, an incoming invoice would be checked against a purchase order (PO), if there is one. It may also be checked against the goods or services actually received, e.g. the packing slip. The invoice may be checked for errors. The invoice may need to be approved for payment by an employee familiar with delivery of the goods or services received.
Several participants use a third-party service that scans invoices and provides the data in a form that integrates with the participant’s accounting system. They use the service by forwarding emailed invoices to the service. This partially replicates e-invoicing, in that the invoice data is received into the accounting system.
As most invoices are received electronically, they are also stored electronically. If the invoice is received in paper form, the paper invoice is typically saved. Some noted that they do print an emailed invoice for data entry purposes, and may keep the paper copy until the invoice is paid.
Potentially the most time-consuming aspect of processing an incoming invoice is the checking and verification process, although as noted the time required can vary considerably. In simple invoices from trusted suppliers the checking process may take a few minutes or less. For more complex invoices, where there is potentially a mismatch between the goods/services invoiced versus goods/services received, or where there are errors in the invoice, the processing time can be much longer.
The time required to manually enter invoice data is short. Participants had some difficulty estimating a typical amount of time required, but most said it takes a matter of minutes. Part of the difficulty some had in coming up with an estimate is that invoices may be entered in batches by a bookkeeper, and the participant doesn’t really think of this in terms of "time per invoice."
As noted in the previous section, none of the participants were using e-invoicing in the sense intended in this research project. As also noted above, among these participants the use of email for sending and receiving invoices is widespread and extensive. In this context, participants were asked about the phrase "electronic invoicing", or "e-invoicing" in short form. Specifically, participants were asked if they considered what their business does to be "e-invoicing." Almost all answered that they do think what they do is "e-invoicing." This indicates that from a communications perspective, the phrase "e-invoicing" (or "electronic invoicing") is highly prone to be interpreted as something very different from what is intended in this project.
The moderator then presented a description of e-invoicing consisting of four slides and an accompanying script (see Appendix). The four slides covered: 1. E-invoicing: What is it:?, 2. E-invoicing: How does it work?, 3. Example: Paper invoice vs. E-invoice, and 4. Implementing e-invoicing.
Note that based on the ensuing discussion, it was evident that this definition of e-invoicing was new to almost all participants: it was not something they recognized in general or specifically in the businesses they deal with. In conjunction with the above point about the high likelihood of interpreting "e-invoicing" as email-based invoicing, this highlights the challenge of designing clear communication about e-invoicing. As described below, this lack of familiarity with e-invoicing as intended here also led to one of the major concerns about invoicing – namely, that there is little benefit to using it if few other businesses are using it.
Immediately following the presentation, the moderator did a vote on how many would consider using e-invoicing in their business. Note that the question referred to "consider using e-invoicing", not the stronger "would you use e-invoicing." Overall, about one-quarter of small business participants said they would consider it, and about half of the medium business participants said they would consider it. Quite a few of those who would consider using e-invoicing had some reservations, so it was not always a purely positive assessment of e-invoicing based on the information provided.
Qualitatively, the best predictor of likelihood of being interested in considering e-invoicing was number of invoices received per year: the more invoices received, the more likelihood of interest. This helps to explain the higher proportion of those interested among medium business participants compared to small business participants. However, this was far from being a perfect predictor. There were participants who receive relatively few invoices per year (e.g. 50-100 per year) who were interested, and participants with large numbers (1,000 or more) who were not interested.
Following discussion of perceived benefits and concerns with e-invoicing, participants were asked again about their overall interest in considering using e-invoicing in their business. There was little change in overall interest. In some groups, the question was posed with an added condition, namely to assume that use of e-invoicing is widespread in Canada. This was added because one of the reasons quite a few gave for lack of interest was a belief that there is little value to using e-invoicing if most other businesses are not using it. Adding the condition resulted in a small increase in interest: several more participants said they would consider e-invoicing for their business. The fact that adding this condition had only a relatively small effect indicates there were other significant perceived issues with e-invoicing. The perceived benefits and issues are described in the next two sections.
Participants were asked on an open-ended basis what if any benefits they thought e-invoicing might provide to their business. This was followed by presentation and discussion of five types of benefits:
Increases cost savings
Improves payment times
Reduces fraud
Connect once, trade with many
Encourages trade
These five benefits were first presented on a slide with an accompanying script (see Appendix). Then each was discussed individually. For the purpose of the discussion the corresponding text from the slide was pasted into the chat box so that participants could see how the benefit was described on the slide. Note that in the initial presentation of the five benefits, it was emphasized that these are demonstrated benefits of e-invoicing – i.e., I’m going to show you a list of what are some of the demonstrated benefits of using e-invoicing. And the introduction also included the following statement, Furthermore, there have been several studies by reputable outside organizations and other governments that have documented the benefits that we’re showing here.
Overall:
Reduced time spent on entering invoice data
Among those interested overall in considering using e-invoicing in their business, this was the primary reason given. Some participants – mainly small business participants – said they could see this would be a benefit to larger companies that process large volumes of incoming invoices, but they did not feel the impact would be significant on their business.
Other perceived benefits of e-invoicing for processing incoming invoices each mentioned by one or several participants:
Reactions to the aided benefit, Increases cost savings
For reference, the following is the slide content and the accompanying script:
Slide
Increases Cost-savings: E-Invoicing reduces invoicing costs by approximately 60%-80%, from an average cost of CAN $20 per paper-based invoice to less than $8-10 per e-invoice
Script
It is estimated that it costs both the seller and purchaser about $20 to process a paper or emailed PDF invoice. In contrast, it costs less than $10 to process an e-invoice. The difference is due to the time saved not having to manually handle each invoice.
Participants were asked if they believed e-invoicing would reduce costs in their business. The result was about the same as for overall interest in considering e-invoicing – i.e. about one-quarter of small business participants said it would reduce costs, and about half the medium business participants said it would reduce costs.
Positive reactions: Those who said it would reduce costs agreed that the time saved by not manually entering data would meaningfully reduce costs. It is interesting that on an unaided basis, most talked about the time saved, not the money saved. This suggests that from a communications perspective, "time saved" should be prominent, and perhaps should be the leading point rather than a supporting point (as it was in the aided presentation).
Other positive reactions from one or a few participants:
Issues/negative reactions: There were two main issues:
Some participants believed that any cost savings would be largely offset by either the costs to set up e-invoicing, or ongoing costs of IT support to maintain e-invoicing. Note that earlier in the session in the presentation on e-invoicing, participants were told (Slide 3):
Talk to your accounting software or service provider to find out if they are or can be enabled for e-invoicing. If they are, they will handle all the work of connecting you to an e-invoicing service provider. They might charge a small one-time fee to do this.
It could be that by this point in the discussion these participants had forgotten this information, or perhaps they did not really believe it at the time. In any event, this suggests that communication about the cost of e-invoicing should also include communication about set-up and maintenance costs.
As described later in Perceived Issues with E-invoicing, quite a few participants were concerned that e-invoicing might somehow negatively impact the process of checking and approving incoming invoices. In this context, it was suggested e-invoicing could increase processing time for some invoices in cases where there were errors in an invoice, the invoice data was coded improperly in the accounting system, or changes need to be made to an invoice. The idea is that these could increase processing time because the issues are detected only after the data are entered into the accounting system, rather than before, and so added time is needed to "fix" the problem.
Facilitates invoice payment
On an unaided basis, some participants said they thought e-invoicing could facilitate payment of invoices. On an aided basis about a quarter of participants said e-invoicing might speed up payment times for their business. There was not much difference in this regard between small versus medium business participants.
Since the unaided and aided discussion were similar, the results are combined here.
For reference, the following is the slide content and the accompanying script:
Slide
Improves Payment Times: Faster transmission and faster processing can speed up payment times
Script
Faster transmission of the invoice and faster processing of the invoice by the recipient can lead to faster payment times. But keep in mind that e-invoicing does not automate payments. The payer remains in full control of when and how an invoice gets paid.
Note that the second sentence in the script was added because in the first groups it was found there was a little bit of confusion about e-invoicing somehow automating payments because of invoice data being automatically added into the recipient’s accounting system.
Positive reactions: The following were reasons some participants gave for thinking that e-invoicing could facilitate invoice payment:
Issues/negative reactions: The main reason the majority of participants said they did not think e-invoicing would lead to faster payment times for their business was because they did not think transmission and processing time is what primarily drives how long it takes to pay an invoice. Rather, what drives payment times are (a) payment terms – either as stated on the invoice or based on the payer’s payment practices, and/or (b) the payer’s cash flow and whether they have the money to make the payment. In this context, some commented that their current practice of emailing invoices already results in quick transmission, and that maybe only companies that mail a lot of invoices would see a benefit to e-invoicing (and none of the participants mailed a lot of invoices).
Reduces fraud
Note that the notion of reducing fraud did not really come up on an unaided basis.
For reference, the following is the slide content and the accompanying script:
Slide
Reduces Fraud: The e-invoicing network provides a safer and more secure channel than emailed or mailed invoices
Script
E-invoicing has the potential to greatly reduce fraud, by ensuring only secure and legitimate invoices are sent or received into a business’s financial systems. The e-invoicing network provides a safer and more secure channel than email, as noted by other government departments, such as the Australian Taxation Office. Only trusted and accredited service providers are able to transmit invoice data. This mitigates the risk of fraudulent invoice requests or interception. The only parties that see the e-invoices are the software providers, buyers and suppliers.
Only a rather small minority of participants believed that e-invoicing could reduce the risk of fraud in their business, with somewhat more medium business participants (about one-fifth) agreeing with this compared to small business participants (about one-tenth).
Positive reactions:
Issues/negative reactions: There were two main reasons why the majority of participants did not feel that e-invoicing would reduce the risk of fraud in their business:
Connect once, Trade with many
Note that this concept did not really come up on an unaided basis.
For reference, the following is the slide content and the accompanying script:
Slide
Connect Once, Trade with Many: E-invoicing can be used to allow all businesses, in all sectors, to trade with many partners, regardless of their size, location, or the financial software they each use through open networks
Script
An open-standards based approach to e-invoicing means that all businesses, in all sectors, can open their networks and trade with many partners, regardless of their size, location, or the financial software they each use.
About one-quarter of medium business participants perceived this to provide a benefit to their business, while only one small business participant perceived this to be a benefit.
Positive reactions: The reasons for being positive were somewhat diffuse, with one or a few participants citing each of the following:
Issues/negative reactions: The main reason given by those who did not see this as providing a benefit to their company was that they feel they can already do business with a variety of types and sizes of companies and with companies in different parts of the world. They do not see how e-invoicing adds to the capability they feel they already have.
Other reactions included:
Encourages trade
Note that this concept did not really come up on an unaided basis.
For reference, the following is the slide content and the accompanying script:
Slide
Encourages Trade: Standardized e-invoicing is now widely used. More than 65 countries have already adopted common requirements for the electronic exchange of invoices.
Script
Standardized e-invoicing is now widely used. More than 65 countries have already adopted common requirements for the electronic exchange of invoices.
About one-third of medium business participants perceived this to provide a benefit to their business, while only a few small business participants perceived this to be a benefit.
Positive reactions:
Issues/negative reactions: There were two main reasons some participants gave for why Encourages trade would not be a benefit to their business:
Several participants said that in their view what is much more important to trade with other countries is the relationships one builds with the other parties, and that how invoice information is exchanged is not a significant factor.
Lack of widespread use of e-invoicing: One barrier to interest in considering using e-invoicing mentioned by quite a few participants is the current lack of widespread use in Canada. Their point was that if most or all of the businesses or organizations they deal with do not have e-invoicing, then there is no benefit to using e-invoicing and therefore no reason to pay to get e-invoicing. Some related results:
As noted previously, when the moderator asked about interest assuming use of e-invoicing is widespread, several more participants did say they would be interested. These results suggest two conclusions:
Current system works fine: Those not interested in considering using e-invoicing quite often commented that how they handle invoicing now works fine, and they do not see any significant added value to using e-invoicing. As one participant put it, in their view e-invoicing is "a solution for a problem that doesn’t exist." This suggests a challenge will be how to convince these businesses there is a benefit to e-invoicing. This will particularly be a challenge for businesses that receive a relatively low volume of invoices, as the primary driver of interest in e-invoicing was more efficient processing of incoming invoices.
Participant concern about impact on checking incoming invoices: Some participants were quite concerned that e-invoicing would adversely affect the processes for checking and approving incoming invoices. Current checking and approval processes start with an actual invoice, but with e-invoicing the starting point is invoice information already entered into the accounting system. The concern was that errors in invoices might go undetected and such invoices could end up being paid. Essentially, these participants were concerned that invoices received via e-invoicing would go directly into accounts payable, without review or approval.
Some noted they would need to build in new processes for checking and approving invoices. For example, one participant suggested the accounting system would need a "holding tank" for incoming invoices in order to allow for review and approval prior to going into accounts payable. Some participants commented that currently an invoice they send or receive first needs approval by a non-accounting person (i.e. if receiving then the person who authorized the purchase, if sending then the purchaser at the other end). These participants were concerned about how these approvals by non-accounting people would be handled under e-invoicing. Another issue mentioned by several participants involved checking incoming invoices against POs. If everything ordered in the PO has been received, then approval is as simple as matching the incoming invoice to the corresponding PO. However, sometimes not everything ordered in the PO was delivered, or for a complicated PO there may be multiple deliveries and invoices. In these cases, matching an invoice to a PO is not sufficient, and there also has to be matching to what has actually been delivered. Again, there was concern about how this would work with e-invoicing.
These results suggest that communication about e-invoicing should address how checking and approval of incoming invoices can be accomplished and in an efficient fashion. The "efficiency" component is important so as not to work against the point that e-invoicing saves time handling invoices. With regard to the latter point, a several participants suggested e-invoicing would not meaningfully reduce time handling incoming invoices because there still needs to be process for checking and approving the invoices.
Several participants with relatively low volumes of incoming invoices commented that it is important for them to see actual invoices as this helps them to understand what is going on in their business and to manage the business.
Participant concern over changing an invoice already sent or received: Some participants were concerned that with e-invoicing it could be difficult or overly time-consuming to change an invoice sent or received when, under e-invoicing, it has already been entered into the accounting system. Essentially this concern is related to the previous point about detecting errors under e-invoicing: if an error is detected, the concern is then how difficult will it be to correct the error. As noted earlier, some participants had customers who required invoices to be submitted using an online portal, in which presumably the invoice data is going into the accounting system. A complaint participants made about these portals is inflexibility in handling changes, and a few pointed out that e-invoicing might have the same sort of problem.
These results suggest communication about e-invoicing should address not only how invoices can be checked and approved in an efficient manner, but also how changes to invoice information can be made in an efficient manner when necessary.
Participant concern over e-invoicing network security: As noted earlier in the discussion of the aided benefit proposition, Reduces fraud, some participants were concerned the e-invoicing network could be hacked, and indeed several suggested these networks would be an attractive target for hackers. A communications challenge will be to convince businesses that the networks are secure, particularly in a news environment where stories about systems being hacked are not uncommon.
Participant concern over cost of implementation and maintenance: As noted earlier in the discussion of the aided benefit proposition, Increases cost saving, some participants believed that any cost savings would be largely offset by either the costs to set up e-invoicing, or ongoing costs of IT support to maintain e-invoicing.
Participant concern over accuracy of coding of cost categories: A few participants were concerned about how accurately costs on an invoice will be categorized in the accounting system, given that nobody is manually entering the data and assigning costs to categories.
Impact of the subscription cost for e-invoicing: In the presentation given to participants about e-invoicing, participants were told that typical costs for small businesses would be $15-$30 per month, and typical costs for medium businesses would be $40-$65 per month. Overall it appears that cost by itself was not a big issue. Participants who were interested in considering using e-invoicing did not complain about the cost. Some of those not interested did say the cost was too high, but our impression is that the issue was not really on the cost side but on the perceived "value for money" side. That is, they saw little or no benefit to using e-invoicing, and so really were objecting to paying anything at all for it. None of them suggested they would consider using e-invoicing if the cost was reduced by X dollars (unless maybe if X dollars is zero).
In the final section of each discussion group, participants were shown a slide with some information on the CRA’s interest in e-invoicing (see Appendix), and then participants were asked for suggestions on what information or supports could encourage businesses to adopt e-invoicing.
Note that the discussion guide did not include any questions on reactions to the slide about the CRA’s interest in e-invoicing. The slide did refer to the possibility of e-invoicing reducing GST/HST reporting burden, and that is discussed further below under Supports to encourage adoption of e-invoicing. The slide also said e-invoicing could help in tax compliance and in reducing tax fraud. In response to the slide, some participants expressed unease over that the CRA might somehow have access to information about their business via the e-invoicing system. It should be noted though that the slide did not make any specific statements about whether, how or under what circumstances the CRA might access information in the e-invoicing network.
Participants were asked what information would be important to provide businesses about e-invoicing to encourage consideration or adoption of e-invoicing. In response to this, most participants focused on what could be done to motivate or incentivize businesses to try e-invoicing rather than specifically answering the question. Arguably, participants had already discussed what aspects of e-invoicing would be important to them. However, based on learning from previous parts of the discussion, the following are some observations:
In one of the focus groups, most of the participants were particularly critical of the CRA being a source for information about e-invoicing. They were skeptical about the extent to which the CRA has the interests of business foremost, and would prefer to get information from private sector companies, such as the accounting software vendors.
Supports to encourage adoption of e-invoicing
A small number of participants believed that the only way to get to widespread adoption of e-invoicing would be for government to mandate it be used.
A few participants suggested that if large companies could be encouraged to adopt e-invoicing, then smaller companies that trade with those companies would be motivated to adopt e-invoicing.
Many participants essentially suggested making e-invoicing free, or at least very low cost:
Some participants suggested somehow incentivizing the accounting software/service vendors to promote use of e-invoicing among their business customers. This might include incentives to encourage them to offer a free trial period, or more generally a low cost.
A few participants suggested that tools be provided that would allow them to assess the benefits to their business of adopting e-invoicing, including impact on costs.
As noted earlier, the slide presented on the CRA’s interest in e-invoicing included a reference to reducing GST/HST reporting burden. In this context, some participants said this would be a good thing. However, some other participants were less positive. Their reasons included:
Number, Composition and Location of Focus Groups
The research consisted of 10 two-hour online focus groups:
| Target group | Total | East | Quebec (Fr) | Ontario | Prairies | B.C. |
|---|---|---|---|---|---|---|
| Small business (1-9 employees) | 5 | 1 | 1 | 1 | 1 | 1 |
| Medium business (10-249 employees) | 5 | 1 | 1 | 1 | 1 | 1 |
| Total | 10 | 2 | 2 | 2 | 2 | 2 |
There were four to seven participants in each group, for a total of 59 participants (29 small business, 30 medium business).
Recruiting and Sample Sources
Recruiting for all English sessions was done by Synchro Research. Recruiting for the Quebec groups was done by Ad hoc recherche. Recruiting was done by telephone.
The sample source was Synchro’s and Ad hoc’s opt-in databases of people who have indicated an interest and willingness to be contacted for possible inclusion in a research study.
Participant Honoraria
The honorarium for all participants was $175.
Qualified Participants
For all groups, a business had to send 20 or more invoices per year or receive 20 or more invoices per year. The qualified participant was the senior person in the business who is responsible for overseeing accounting and tax-related matters for the business.
The following exclusions applied:
A wide variety of types of businesses were included in the research.
Sample Profile
The following summarizes the number of participants along several dimensions:
| Business structure | Total (#) | Small Business (#) | Medium Business (#) |
| Sole proprietor | 18 | 13 | 5 |
| Corporation or partnership | 41 | 16 | 25 |
| Number of employees | Total (#) | Small Business (#) | Medium Business (#) |
| One | 8 | 8 | - |
| 2 to 4 | 12 | 12 | - |
| 5 to 9 | 9 | 9 | - |
| 10 to 49 | 17 | - | 17 |
| 50 to 99 | 8 | - | 8 |
| 100 to 249 | 5 | - | 5 |
| How the business handles completing the business tax return and other tax forms | Total (#) | Small Business (#) | Medium Business (#) |
| Do all tax form completion internally | 17 | 9 | 8 |
| Hire accountant/tax preparer | 42 | 20 | 22 |
| Has in-house bookkeeping or accounting support* | Total (#) | Small Business (#) | Medium Business (#) |
| Yes | 49 | 24 | 25 |
| No | 10 | 5 | 5 |
*"Yes" to in-house bookkeeping or accounting support includes those who do all tax form completion internally
Moderators
Rick Robson moderated the English-language focus groups. Sylvain Laroche moderated the French-language focus groups.
Hello, I'm ___________ of (Synchro Research/Ad hoc recherche), a marketing research company.
| Would you prefer that I continue in English or in French? Préférez-vous continuer en français ou en anglais? [If prefers French, either switch to the French screener and continue, or say the following and then hang up and arrange French-language call-back] Nous vous rappellerons pour mener cette entrevue de recherche en français. Merci. Au revoir. |
First off, let me assure you that we are not trying to sell you anything. We are organizing a research project on behalf of the Government of Canada, and specifically for the Canada Revenue Agency. The study is about invoicing practices of businesses and the methods they use for this purpose. In this context, a "business" could mean a company, or a sole proprietor.
Note to recruiter: Should a participant require validation that this is a legitimate research project, please refer them to www.canada.ca/por-cra or to: Angela Muma |
May I please speak with the senior person in your business who is responsible for overseeing accounting and tax-related matters for the business? When connected, re-introduce yourself and ask:
Are you the senior person in the business who is responsible for or shares responsibility for overseeing accounting and tax-related matters?
If "no": Ask to speak to the senior person in the business who is responsible for or shares responsibility for overseeing accounting and tax-related matters
If "yes":
And what is your position in the business?
____________________________________________________
If the business needed to make some high-level decisions about accounting software or accounting services to be used by the business, would you likely be involved in the decision-making process?
If "no": Thank and terminate
If "yes": Continue
When connected to the right person, ask:
In this research project, an individual like yourself is chosen to sit down with five to seven other people representing different businesses and give ideas and opinions in a two-hour online discussion session. You will be paid an honorarium for your participation in the online group discussion.
[If prefers to continue in English for the Quebec French-language focus groups, ask:] The discussion will be held entirely in French, and participants will be asked to review and discuss written communication materials written only in French. Would you be comfortable doing this?
[Si préfère continuer en français pour les groupes de l'Ontario, des Prairies, du Pacifique ou de l'Atlantique qui seront dirigés en anglais, demandez : La discussion se déroulera entièrement en anglais et nous demanderons aux participants de passer en revue du matériel de communication écrite en anglais seulement, puis d'en discuter. Seriez-vous à l'aise avec cela ?
I’d like to tell you a bit more about this study to see if you are interested in possibly taking part in this study.
The discussion will be about invoicing practices in businesses. Topics will include how invoices are created and sent, how the business processes invoices it receives, and what role, if any, digital methods play in these processes. You’ll also be asked for your opinions about a possible automated process for handling incoming and outgoing invoices.
You will not be asked about any specific invoices sent or received by your business, but rather only general questions about how the business handles invoice-related processes.
Neither your personal identity nor the name of your business will be given to the Canada Revenue Agency.
The results of the research will be used by the Canada Revenue Agency to better understand how businesses handle processes related to incoming and outgoing invoices, and also what businesses may think about an automated process for handling invoices.
Participation is voluntary and an individual’s decision to take part will not affect any dealings they may have with the Government of Canada. All information collected will be used for research purposes only, in accordance with laws designed to protect your privacy. All opinions expressed will remain anonymous, and views will be grouped together to ensure no particular individual or business can be identified. May I continue?
Thank you. I need to ask you a few questions to see if you fit the profile of the types of companies we are looking for in this research. This will take about 6-7 minutes.
| Note to recruiter: When terminating a call with someone, say: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate. |
1) Record gender (no quotas):
2) Record regions (watch quotas)
3) Approximately, how many people does your business employ? In your count, please include yourself and all full-time and permanent part-time employees from all locations in Canada.
(Qualifies for Small Business)
(Qualifies for Medium Business)
(Thank and end the interview)
Quotas
Small Business: try to recruit a mix
Medium Business: Quotas out of 7 recruits:
4) Do you, or does anyone in your household, work for ... ? (Read list)
If "yes" to any, thank and end the interview
5) I have a few questions about the number of invoices sent and received by your company in a typical year. I’m interested in invoices involving businesses or organizations that you deal with. I’m not including invoices you send to individuals such as consumers.
5a) Firstly, in a typical year, does your businesses send any invoices to other businesses or organizations?
5b) And about how many invoices does your business send to other businesses or organizations in a typical year? Would you say you send… (read list):
5c) I’d now like to ask you about invoices your business receives from other businesses or organizations. About how many invoices does your business receive from other businesses or organizations in a typical year? Would you say receive … (read list):
To qualify, must either send 20 or more invoices per year at Q.5b, or receive 20 or more invoices per year (Q.5c). If does not meet this qualification, thank and terminate.
Quota: At least 4 of 7 recruits send 20 or more invoices at Q.5b
6) In which industry or sector does your business operate? If you are active in more than one sector, please identify the main sector. (Do not read list. Accept only one response. Confirm result with respondent as necessary)
Record response here and classify below:
__________________________________________________
Quotas: For each group:
7) How is your business structured? Is it …. (read list)
Small Business targets:
Medium business: No quotas
8a) How does your business handle completing the business tax return and other tax forms? Do you do all of these internally, or do you hire an accountant or other tax preparer to complete these tax forms?
8b) Do you have in-house bookkeeping or accounting support?
9) How long has your business been in operation? (Do not read list)
I have just a few more questions to ask you.
10) Have you ever participated in an in-depth research interview or a focus group involving a small group of people where people were asked to discuss different topics?
11a) What topics have you ever discussed?
__________________________________________________________________________
(If accounting or tax-related, thank participant for their time and end the interview)
11b) And when was the last time you attended an interview or discussion group?
11c) In the past 5 years, how many in-depth research interviews or discussion groups have you attended? Would you say less than 5 in total, or would you say 5 or more?
12) The discussion group will require you to go online using a desktop or laptop computer. For this project, you will not be able to use a tablet or mobile phone.
You will need a good internet connection, and preferably in a quiet location.
You will also need a webcam.
Will you be able to use a webcam and a desktop or laptop computer for the 2-hour group discussion?
Are there any other reasons, such as difficulty seeing things on the screen or hearing other participants speak that may prevent you from being able to fully participate in the group discussion?
Terminate if person gives a reason such as sight, hearing, or related to reading/writing ability.
Let me tell you some more about this study to see if you would like to take part.
13a) There may be someone from the Canada Revenue Agency who has been involved in this project observing the session. However, they will not take part in the discussion in any way, and they will not be given your name or the name of the business. The observers are there to obtain first-hand information to assist the research. Is this acceptable to you?
13b) The session will be video-recorded. These recordings are used by the research firm to help with analyzing the findings and writing the report, and will not be given to the Canada Revenue Agency. Neither your name nor the name of your business will appear in the research report. Is this acceptable to you?
INVITATION
The focus group will be held on [insert date], at [insert participant’s local time]. Would you be available to attend?
Thank you. We would like to invite you to participate in the 2-hour group discussion. Following your participation in the focus group, you will be paid $175 to thank you for your participation.
For the group discussion we will be using an online software company called itracks (pronounced eye-tracks). Prior to the group discussion, we will send you a link to the company’s website for a diagnostic check, to make sure that you do not have any problems logging on to the platform for the group discussion itself. Please make sure you do this check before the group. Please let us know if you run in to any problems.
The person leading the discussion will be Rick Robson/Sylvain Laroche of Sage Research, which is a public opinion research company.
As I mentioned earlier, this is a research project being done on behalf of the Canada Revenue Agency.
I want to reassure you that your name will not be given to them, nor will your decisions about participating affect any dealings you have with the Government of Canada.
Would you be willing to attend?
| Region | Date | Type | Time EST | Local Time |
|---|---|---|---|---|
| Ontario | Thursday, April 22 | Small business | 7:00 pm | 7:00 pm |
| Ontario | Tuesday, April 27 | Medium business | 7:00 pm | 7:00 pm |
| Prairies | Wednesday, April 28 | Small business | 8:00 pm | Man: 7:00 pm Sask: 6:00 pm Alta: 6:00 pm |
| Prairies | Thursday, April 29 | Medium business | 8:00 pm | Man: 7:00 pm Sask: 6:00 pm Alta: 6:00 pm |
| Pacific | Tuesday, May 4 | Small business | 9:00 pm | 6:00 pm |
| Pacific | Wednesday, May 5 | Medium business | 9:00 pm | 6:00 pm |
| Atlantic | Tuesday, May 4 | Small business | 5:30 pm | NS: 6:30 pm NB: 6:30 pm PEI: 6:30 pm Nfld: 7:00 pm |
| Atlantic | Wednesday, May 5 | Medium business | 5:30 pm | NS: 6:30 pm NB: 6:30 pm PEI: 6:30 pm Nfld: 7:00 pm |
| Quebec | Tuesday, May 4 | Small business | 6:30 pm | 6:30 pm |
| Quebec | Wednesday, May 5 | Medium business | 6:30 pm | 6:30 pm |
We will email you instructions on how to log in for the technical check and to the online group discussion.
As we are only inviting a small number of people to attend, your participation is very important to us. If for some reason you are unable to attend, please call so that we can get someone to replace you. You can reach us at [Insert recruiter’s phone #]. Please ask for [Insert contact name]. Please note that you may not send someone else in your place if you are unable to attend.
Please also log-in 10 minutes prior to the starting time. The discussion will begin promptly at [Participant’s Local Time]
Someone from our company will call you back within two or three days to confirm these arrangements. To do that, we need to have your contact information.
Name:_______________________________________________________________
Evening phone:___________________ Day time phone:____________________
Email address:________________________________________________________
Thank you very much!
Recruited by:__________________________________________________________
Confirmed by:
Note: The discussion materials consisted of four components:
1) Introduction (15 minutes)
a) Introduce self (Rick Robson of Sage Research, an independent market research company). This is a research project we’re doing on behalf of the Government of Canada, and specifically for the Canada Revenue Agency (CRA).
This research project is about the invoicing practices of businesses. Specifically, I’m interested in invoices that a business sends to another business, or to an organization such as government. We’re not going to talk about invoices you might issue to an individual consumer.
Topics will include how invoices are created and sent, how your business processes invoices it receives, and what role, if any, digital methods play in these processes. I’ll also ask for your opinions on automated processes for handling incoming and outgoing invoices.
I will not ask you about any specific invoices sent or received by your business, but rather only general questions about how the business handles invoice-related processes.
One thing that all of you have in common is that you are associated with a business, and I’m talking with you in your role as a business person.
The results of the research will be used by the CRA to better understand how businesses handle processes related to incoming and outgoing invoices, and also what businesses may think about automated processes for handling invoices.
b) Review group discussion procedures:
c) Any questions?
d) Participant self-introductions: First name only, and the nature of your business (do not say the name of the business)
2) Invoicing practices (20 minutes)
a) I’d like to start out by hearing how your business handles invoicing involving other businesses or organizations. I’ll start with creating and sending invoices. How does your business create invoices that are to be sent to another business or organization, and how do you actually send the invoices? And as part of this I’m interested in any accounting software or service that you use as part of this process.
Probe: In a typical year, roughly about how many invoices do you send to businesses or organizations
Note to moderator: If participants bring up how COVID has impacted business, primary interest is in pre-COVID period, but can spend several minutes on COVID impact. If deemed useful, can tell participants there is other research with business specifically about impacts of COVID
[If variation in how they send, ask:] Does how you send an invoice affect how long it takes to get paid, or not really? (mail versus electronic)
What aspects of generating the invoice are most time consuming?
b) I’m now going to move to the other side of invoicing, which is receiving, processing and storing invoices that your business receives from other businesses or organizations. I’m not talking about paying invoices here, just what you do when an invoice arrives. How does your business receive these invoices, what do you do to verify and process the invoices, and how do you store the invoices?
Probe: In a typical year, roughly about how many invoices does your business receive from other businesses or organizations?
Do you have an idea of how much time it takes to process a typical invoice, or not really?
What aspects of processing an invoice are most time consuming?
3) Awareness and knowledge of e-invoicing (10 minutes)
NOTE: How this topic is introduced and discussed will depend to some extent on what participants say at Step #2
a) One way of handling invoicing between businesses is electronic invoicing, which is also called e-invoicing. What is your understanding of what e-invoicing is in terms of how invoices are created, sent and received?
b) [Ask those who understand e-invoicing to involve electronic data interchange (EDI) between two businesses]: Do you use this type of e-invoicing in your business? [Focus first on those who say "no"]
If no: Has your business considered using e-invoicing? What are your reasons?
If yes: [If necessary:] Please describe in a bit more detail how your e-invoicing system is set up.
4) Present e-invoicing description (10 minutes)
NOTE: How this topic is introduced and discussed will depend to some extent on what participants say at Step #3
I’m now going to describe what e-invoicing is, and how it works. When I’m done, I’ll ask you what you think of it. I’ll ask what you think might be benefits to your business of using e-invoicing, what challenges or difficulties you think your business would have if it were to use e-invoicing, and overall how interested your business might be in using e-invoicing.
[Read script for Slides 1 to 6]
5) Reactions to e-invoicing description (45 minutes)
a) Based on the information I’ve presented, how many of you would consider using e-invoicing for your business? (Do vote)
Note to moderator: If/when participants say that current lack of widespread adoption of e-invoicing is a barrier to them being interested in using e-invoicing, then:
b) I’m going to ask you both what you think could be benefits of e-invoicing to your business, as well as what you think could be challenges or difficulties for your business. Let’s start with the benefits. What do you think could be benefits of e-invoicing for your business?
c) I’m going to show a list of what are some of the demonstrated benefits of using e-invoicing, and I’d like to get your opinions about these. [Present Slide 6/script]
Discuss reactions to each of the benefits on Slide 6
d) What do you think could be challenges or difficulties for your business to get or use e-invoicing? I should tell you that at this point in time, e-invoicing is widely used by businesses of all sizes in many other countries (such as in the EU, Latin America, Australia, etc), but not as widely used by small businesses in Canada.
e) Leading e-invoicing solutions are in the order of $15 to $30/month for small businesses, and $40 to $65/month for medium businesses. I’d like to get your thoughts on these costs.
Note to moderator: these costs reflect Sage Accounting tool subscription costs.
f) Overall, now that we’ve talked quite a bit about the pros and cons of e-invoicing, how interested would your business be into looking into using e-invoicing?
6) Actions CRA can take to encourage e-invoicing (15 Minutes)
Read script for slide 7.
a) What information would you like to see coming from the CRA when communicating with small and medium-sized businesses about e-invoicing?
Probe: About how e-invoicing works or how to learn more about it
About how to implement e-invoicing
About benefits of e-invoicing
b) What kinds of support would business like to see from the CRA or other government department or agency to encourage e-invoicing adoption?
7) OPTIONAL (time permitting)
I’d like to take the last few minutes to talk about something completely different, and not related to e-invoicing. Namely, I’d like to ask you about your overall opinion of how the Government of Canada has supported businesses throughout the COVID-19 pandemic.
The question is: What has the Government of Canada done well in terms of supporting small and medium businesses, such as yours, and what could they have done better?
8) Wrap-up (5 minutes)
We’re just about finished. Is there anything else related to what we’ve discussed that you want to mention before we wrap up?
Thank you for coming this evening and giving us your opinions.
Slide 1: E-invoicing: What is it?
Electronic invoicing (or e-invoicing) is the automated digital exchange of invoice information directly between a buyer's and supplier's accounting and business systems through a secure e-invoicing network.
Slide 2: E-invoicing: How does it work?
(Image: Sender’s accounting system or service to E-invoicing Service Provider A to E-invoicing Service Provider B to Buyer’s accounting software or service)
Slide 3: Example: Paper invoice vs. E-invoice
(Image: Paper Invoice Process: Create Invoice to Print to Post (need address) to Deliver to Check to Manual data input to Receive)
(Image: E-Invoicing Process: Create invoice (seller) to E-Invoicing to Receive (buyer)
Slide 4: Implementing E-invoicing
How can I implement e-invoicing?
How much does it cost?
Slide 5: E-invoicing: How does it work?
(Image: Sender’s accounting system or service à E-invoicing Service Provider A à E-invoicing Service Provider B à Buyer’s accounting software or service)
Script
Display Slide 1:
The CRA has provided the following definition of e-invoicing. Electronic invoicing, or e-invoicing, is the automated digital exchange of invoice information directly between a buyer's and supplier's accounting systems through a secure e-invoicing network.
I found this definition a little hard to fully understand, so I’m going to give a longer explanation. This will take several slides.
Display Slide 2:
So, how does e-invoicing work? In this process, we have an invoice sender, and a buyer who receives the invoice.
First, the sender creates an invoice using their own accounting software or online accounting service.
Second, their accounting software or service sends the invoice electronically to the e-invoicing service provider.
Third, the invoice data is transmitted electronically to the e-invoicing service provider of the buyer.
And finally, the buyer’s e-invoice service provider transmits the invoice data directly into the buyer’s accounting software or service.
Display Slide 3:
On this slide I’ve shown an example of what a paper invoicing process looks like compared to the e-invoicing process.
With a paper invoicing process: you create the invoice either manually or using your accounting software or service, print the invoice, put it in envelope and mail it, or in the case of a PDF, email the invoice. The business receiving the invoice opens the envelope or email, checks the invoice, then manually enters the invoice data into their systemor into the accounting software or service they might be using.
With an e-invoicing process, there is no need for paper or PDFs. The invoice is created electronically and sent directly from the sender’s accounting software or service. The buyer receives the invoice directly into their own accounting software or service. Because it is direct transmission into the buyer’s system, there is no use of PDFs or email.
Display Slide 4:
So, how does a business get e-invoicing?
Talk to your accounting software or service provider to find out if they are or can be enabled for e-invoicing. If they are, they will handle all the work of connecting you to an e-invoicing service provider. They might charge a small one-time fee to do this.
You can either use an e-invoicing service provider they recommend, or choose one yourself.
In terms of the cost, the subscription cost will depend upon variables such as invoice volume, business size, accounting software as well as the service provider you choose.
For small businesses, the cost would typically be somewhere between $15 a month and $30 a month.
For medium businesses, the cost would typically be between $40 a month and $65 a month.
Display Slide 5 (same as Slide 2 How does it work), and return to discussion guide
Slide 6: Benefits of e-invoicing
Script
E-invoicing has many benefits for business by simplifying and automating the exchange and processing of invoices.
Furthermore, there have been several studies by reputable outside organizations and other governments that have documented the benefits that we’re showing here.
Increases Cost Savings:
It is estimated that it costs both the seller and purchaser about $20 to process a paper or emailed PDF invoice. In contrast, it costs less than $10 to process an e-invoice. The difference is due to the time saved not having to manually handle each invoice.
Reduces Fraud:
E-invoicing has the potential to greatly reduce fraud, by ensuring only secure and legitimate invoices are sent or received into a business’s financial systems. The e-invoicing network provides a safer and more secure channel than email, as noted by other government departments, such as the Australian Taxation Office. Only trusted and accredited service providers are able to transmit invoice data. This mitigates the risk of fraudulent invoice requests or interception.The only parties that see the e-invoices are the software providers, buyers and suppliers.
Improved Payment Times:
Faster transmission of the invoice and faster processing of the invoice by the recipient can lead to faster payment times. But keep in mind that e-invoicing does not automate payments. They payer remains in full control of when and how an invoice gets paid.
Connect Once, Trade with Many:
A open-standards based approach to e-invoicing means that all businesses, in all sectors, can open their networks and trade with many partners, regardless of their size, location, or the financial software they each use.
Encourages Trade: Standardized e-invoicing is now widely used. More than 65 countries have already adopted common requirements for the electronic exchange of invoices.
Slide 7: CRA and E-invoicing
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