EDI, invoice portals and application generated PDF's are all complimentary submission methods of a successful e-invoicing service.
EDI e-invoicing and e-ordering is the exchange of EDI documentation (EDI or XML files) using standardised languages (including X12, EDIFACT, ODETTE, etc) transferred through internet protocols (FTP, HTTP or AS1, 2 and 4) between transacting organisations.
Because the adoption of this system requires complete business process change, this type of e-document exchange is often adopted by larger organisations who can afford to implement these systems. The disadvantage is that supplier adoption by smaller organisations (who sell to large organisations) is low. This is because the technical, process and financial constraints result in the supplier continuing to send paper documents.
Read more about EDI on Wikipedia
Invoice portals are often used by larger organisations to get suppliers to submit their invoices directly into their Accounts Payable systems. They are not particularly popular and unless mandated are often shunned so that paper invoices continue to be sent to the buyer. This is because it requires a supplier to produce its invoice from its own financial system and then raise the invoice all over again within the portal. Sometimes the supplier must download a program to use and sometimes pay to use the service, all of which are disincentives.
Recent Fintech developments mean that it is now possible to exchange other types of files (html, doc and pdf) between a supplier and buyer via email without human intervention. This is done through using patented software in the cloud to convert them to EDI or XML files that can be integrated direct to a buyers or suppliers ordering or financial system. What makes this possible? The development of software that utilises AI (artificial intelligence) languages and protocols to enable computers to map extractable data layers from electronic documents (i.e application generated PDF's). This enables computers to finally learn how to interpret human readable documents to acceptable levels of data accuracy. A quiet but significant revolution.
Paper is the traditional method for invoice submission. It is uneconomical to continue using it as part of any system that converts paper to electronic formats (including OCR). This is because of the many processing touch points required on both the supplier and buyer side during its continued use, which can be removed by e-invoicing as shown below.
OCR is a method by which paper is scanned and converted to an electronic format that can be accepted into an accounts payable system. However, the inherent inaccuracies of even the most advanced OCR and scanning methods require AP staff to check invoices often requiring manual intervention. Some cost and time benefits are realised in processing and organisational approval, however these can never match the savings realised by using true einvoicing systems.
PDF image files require the same level of processing and manual intervention as described above for OCR. This makes them uneconomical as a method of e-invoicing. However, most suppliers finance systems will produce an 'application generated' PDF. Within these the 'data layer' can be exploited in the Cloud and mapped across to either and EDI or XML format that can be accepted directly into a buyers AP system.