Electronic Invoicing in Finland - attitudes towards
electronic invoicing by financial managers in small- to
Master’s of Science Thesis in Accounting
Swedish School of Economics and Business Administration
SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION
Department: Accounting Type of work: Master of Science Thesis
Author: Anna Rofhök-Björni Date: 25.01.2006
Title: Electronic Invoicing in Finland - attitudes towards electronic invoicing by
financial managers in small- to mid-sized companies
Electronic invoicing is a fairly new phenomenon that is facing a surge in popularity
in Finland at the moment. There has not been a lot of research made previously on
electronic invoicing and attitudes towards using it by potential users. This thesis aims
to fill this gap.
The research objective is to ascertain what the attitudes are towards electronic
invoicing by financial managers employed by SMEs in Finland. A questionnaire has
been sent to financial managers with questions about electronic invoicing. The
response rate was good.
The result of the study showed that the attitudes towards electronic invoicing are
positive. There were some concerns regarding the cost and safety of using electronic
invoicing but the majority of the respondents believe that using electronic invoicing
would be beneficial.
Keywords: electronic invoicing, XML, ebXML, eInvoice, Finvoice, electronic
commerce, TEAPPSXML, PostiXML, EDIFACT
Table of Contents
1 Introduction ______________________________________________________ 1
1.1 Background ________________________________________________________ 1
1.2 Research objective __________________________________________________ 1
1.3 Structure of the thesis________________________________________________ 1
2 Electronic Invoicing in Finland ______________________________________ 3
2.1 Introduction________________________________________________________ 3
2.2 The invoice_________________________________________________________ 3
2.3 Electronic invoicing _________________________________________________ 4
2.4 Techniques and standards ___________________________________________ 10
2.5 Electronic invoicing in Finland _______________________________________ 13
2.6 Laws and regulations _______________________________________________ 18
2.7 Summary _________________________________________________________ 19
3 Theories and prior research ________________________________________ 20
3.1 Introduction_______________________________________________________ 20
3.2 Theories of adoption of new information technology _____________________ 20
3.3 Previous research-findings on factors affecting attitudes towards adoption __ 23
3.4 Summary _________________________________________________________ 28
4 Research model and Methodology ___________________________________ 29
4.1 Introduction_______________________________________________________ 29
4.2 Research model and hypotheses ______________________________________ 29
4.3 Data collection _____________________________________________________ 34
4.4 The results ________________________________________________________ 37
5 Discussion ______________________________________________________ 62
5.1 The research and its limitations ______________________________________ 62
5.2 The results and their implications _____________________________________ 62
5.3 Suggestions for further study_________________________________________ 66
5.4 Conclusion ________________________________________________________ 66
6 Bibliography_____________________________________________________ 67
7 Appendix _______________________________________________________ 71
7.1 Appendix 1________________________________________________________ 71
7.2 Appendix 2________________________________________________________ 77
List of Tables
Table 2.1 Costs of paper invoices versus electronic invoices (Elma Electronic Trading, 2006) ...............10
Table 4.1 Current electronic invoicing status ............................................................................................38
Table 4.2 Preferred electronic-invoicing solution......................................................................................39
Table 4.3 Electronic invoicing is hard to understand ................................................................................39
Table 4.4 There is a risk of error increase when using electronic invoicing .............................................40
Table 4.5 Electronic invoicing is tiresome to learn....................................................................................40
Table 4.6 It would be difficult to check accuracy when using electronic invoicing ...................................41
Table 4.7 Technically safe..........................................................................................................................41
Table 4.8 There are financial restrictions in our company to acquire electronic invoicing ......................42
Table 4.9 ERP Systems in use in our company...........................................................................................43
Table 4.10 Regression analysis 1 ...............................................................................................................45
Table 4.11 Regression analysis 2 ...............................................................................................................47
Table 4.12 Regression analysis 3 ...............................................................................................................50
Table 4.13 Regression analysis 4 ...............................................................................................................52
Table 4.14 Regression analysis 5 ...............................................................................................................55
Table 4.15 Summary of hypotheses ............................................................................................................59
Table 4.16 Correlation Matrix ...................................................................................................................60
Table 4.17 Questions for correlation matrix in table 4.14 .........................................................................60
List of Figures
Figure 2.1 Elma for RosettaNet (Elma Electronic Trading, 2006) ______________________________12
Figure 2.2 eInvoice model (e-invoice consortium, 2005)_____________________________________14
Figure 3.1 The Technology Acceptance Model (TAM) (Gullkvist, 2005) _________________________21
Figure 3.2 The Theory of Reasoned Action (TRA) (Gullkvist, 2005) ____________________________22
Figure 4.1 Research model ____________________________________________________________30
Figure 4.2 Technically safe ___________________________________________________________41
Figure 4.3 Normality Probability Plot Regression No1 ______________________________________45
Figure 4.4 Normality Probability Plot Regression No 2 ______________________________________48
Figure 4.5 Normality Probability Plot Regression No 3 ______________________________________50
Figure 4.6 Normality Probability Plot Regression No 4 ______________________________________53
Figure 4.7 Normality Probability Plot Regression No 5 ______________________________________56
Table 4.17 Questions for correlation matrix in table 4.14 ____________________________________60
Figure 4.8 Correlations in research model ________________________________________________61
Figure 5.1 The significant factors in the research model_____________________________________63
I would like to thank everybody who has helped me during the time I have been writing
this thesis. I want to thank Thomas Lönnquist at eCraft Oy Ab who gave me the idea to
write about electronic invoicing as well as Johan Andersson at Iversum who has sent me
lots of information. Additionally, I would like to thank Janneke von Wendt and Tove
Gordin-Lydman who translated the questionnaire from English to Finnish. Also, Oana
Velcu, thank you so much for helping me out with all the technical stuff as well as
giving me information on how to analyse my results. I would also like to thank Heli
Salmi who agreed to meet with me and discuss electronic invoicing in Finland. And of
course, Professor Anders Tallberg who has given advice on how to write the thesis and
how not to. Last but not least, I want to thank my husband Janne for putting up with me
and my writing – it took longer than I planned. Thanks for your support!!
In Finland, the Finns can use information networks for almost any everyday activity.
Dealings with governmental departments, bank transactions and purchasing flight or concert
tickets can be handled online. Eighty percent of the population in Finland is familiar with
the Internet and almost fifty percent of them use the Internet daily. Finland has been ranked
three times as one of the most developed IT economies by World Economic Forum (WEF)
in the beginning of the 21st century. Additionally, Finland has many times been cited as a
good “test laboratory” for innovations and services because the Finnish people are
technically oriented and interested in trying new products. Exploring electronic invoicing
and financial managers’ views on its use and adoption in Finland will therefore give an
interesting picture of the future of electronic invoicing (ICT Cluster Finland Review 2005).
There has been a lot of research made regarding attitudes towards and adoption of
electronic commerce by SMEs (Small and Middle-sized Enterprises) which has shown that
SMEs are reluctant to adopt e-commerce (Grandon & Mykyton, 2004). Considering these
findings, it is of interest to establish financial managers’ thoughts regarding electronic
1.2 Research objective
Electronic invoicing is currently a much discussed topic because of the time and cost
reductions it can offer. Many different solutions and techniques have been introduced and
tested. Even though there are numerous studies on attitudes towards information technology
and electronic commerce and their adoption, there is no current research available on the
attitudes towards electronic invoicing. The main purpose of this thesis is to fill this gap.
The objective is to identify the attitudes towards electronic invoicing and its adoption
among financial managers and accountants working for SMEs in Finland. This study will as
a consequence increase our knowledge of attitudes towards new technology in general and
electronic invoicing in particular.
1.3 Structure of the thesis
The first chapter of the thesis serves as an introduction to the topic of electronic invoicing.
The second chapter will discuss electronic invoicing in Finland. A general description of the
traditional invoice will be offered and discussed before continuing with the electronic
invoice. There will be definitions and introductions of what kinds of electronic invoicing
there are. Subsequently, benefits that can be won by using electronic invoicing are
discussed. Chapter two continues by discussing techniques and standards that are used to
make electronic invoices and also the most common solutions available on the Finnish
market. The chapter will end by briefly introducing laws and regulations that need to be
Chapter three discusses theories on new information technology adoption and previous
research in this area. In this chapter various factors influencing adoption decisions and
attitudes are identified.
Next part of the thesis, chapter four outlines the research methodology, the research itself
and the results. The last part, chapter five will discuss the findings and their limitations and
2 Electronic Invoicing in Finland
Electronic invoicing is facing a surge in popularity at the moment and especially in Finland
suppliers of electronic invoicing and new solutions are increasing. In this section I will
establish what an electronic invoice is, what options are available, the techniques and
standards and finally some solutions on the market in Finland and the laws and regulations.
2.2 The invoice
To understand the electronic invoice, it is useful to be aware of what an invoice is. The
commercial invoice is according to the CEN/ISSS e-Invoicing Focus Group (2005) the most
important document exchanged between business partners. It is not only of commercial
value but it is also an accounting document and it has legal implications for both the sender
and the receiver of the invoice. According to Verohallinto (2005), an invoice is
verification or a message in either paper or electronic format that fulfils the regulations of
VAT (Value Added Tax) laws. In Finland, the invoice forms the basis for the VAT
declaration and reclamation as well as the statistics declaration for intra community trade
and the export and import declaration for extra community trade (CEN/ISSS e-invoicing
focus Group, 2005). The invoice is made by the seller for a sale made to document the
transaction and it subsequently supports accounting and auditing functions. In Finland, a
typical invoice includes the following items:
• Date of invoice
• Number of invoice
• The issuer’s VAT-number
• Issuer’s and recipient’s name and address
• The amount and kind of goods or services
• Date of delivery, date of performance or date of payment (if it is a prepayment)
• The tax-base for every taxable item, price per unit excluding VAT as well as price
reductions and discounts.
• Amount of VAT to be paid (Verohallinto, 2005)
2.3 Electronic invoicing
According to the e-invoice consortium (2005), an electronic invoice is a modern, reliable,
cost-efficient and practically paperless method of handling and processing invoices for
goods, services and other expenses. Electronic invoicing is suitable for both large and small
firms and companies as well as private customers and both large and small volumes of
invoices can be sent. It is an especially efficient method of invoicing when there are many
recipients. The recipient is sent the invoicing data and an invoice image for circulation,
approval and archiving in electronic format (Elma Electronic Trading, 2005). The electronic
invoice can be graphically displayed on the computer screen similarly to a traditional
invoice. Consequently, archiving, distribution and approval procedures are improved.
Business customers can receive the electronic invoice straight into their financial
information system (e-invoice consortium, 2005). Private customers can receive invoices in
their internet bank. Private customers will not be dealt with in depth as this thesis will
mainly concentrate on B2B (Business to Business) invoicing solutions.
2.3.2 Invoicing electronically
To be able to receive electronic invoices there has to be at least an internet connection, a
workstation, and an agreement with an internet bank or similar where the invoices will
arrive. Sending is usually done through the company’s invoicing system but it can be done
through the Internet as well (Tieke, 2005).
Most financial administration services can send electronic invoices through the Internet
without anything but a browser. The invoices are divided into electronic invoices,
EDIFACT invoices or eKirje invoices to be printed in paper format and subsequently sent
forward to the recipients. The recipient can also receive the invoices electronically straight
into the financial information system provided that the account entries are already marked
on the invoice. All the recipient has to do is to approve the invoice for payment. Sales and
purchase invoices can for example be accessed and transmitted while performing other
bank-transactions (Vahtera Pauli, 2005).
22.214.171.124 Scanning of invoices
The most basic method of electronic invoicing is scanning. The invoice is issued by the
sender in paper format and subsequently scanned so that the receiver can process them
electronically. The receiver or a third party usually performs the scanning. In this case, the
invoices do not use any electronic messaging.
The receiver has good control of the internal handling of invoices, the processing system
and the status right through the processing as well as the archiving (CEN/ISSS e-Invoicing
Focus Group, 2005). However, the benefits from electronic invoicing compared to paper
invoices are non-existent if the financial information system does not use a system which
can handle the electronic invoice. Consequently, scanning of invoices is only using a small
part of the possibilities that electronic invoices can offer (Vahtera, 2002).
126.96.36.199 Insular electronic invoice
The next type of electronic invoice is the insular electronic invoice. This is when the
receiver wishes to receive invoices electronically in his/her system but where the preceding
messages have not been electronic. This may help to streamline the receiver’s internal
processing of invoices but the processing will nevertheless involve many manual actions
such as verification and matching of the invoice against orders, and cut-and-paste
operations to make the invoice information possible to manage in the ERP system. These
invoices could be in text format (HTML, Word, Excel and the like) or graphical format (for
example PDF or TIFF) (CEN/ISSS e-Invoicing Focus Group, 2005).
188.8.131.52 Electronic invoicing on Web forms
This option involves a web site where the invoices are entered. An example would be a
large, powerful buyer who wants to receive electronic invoices but buys irregularly or not
very often from small suppliers. The supplier is then referred to a web site, usually one that
is accessed through user id and password and he/she can enter the invoice manually there.
The web site might also offer additional services such as storing of invoices and printed or
electronic copies of the invoices entered. If the web site is also the point of access for orders
to the supplier, his/her amount of invoicing data to be inserted may be considerably
reduced. The buyer has full authority on the format of the invoices so that they can be
processed automatically when received. The buyer or a third party runs the web site and is
in control of how the invoices are stored and the security surrounding the invoices.
The web site could be in the supplier’s control if the situation is reversed and the supplier is
influential and can persuade the buyers to collect invoices from there. In this scenario the
supplier controls the invoice format and procedures. Using a web site for electronic
invoicing could however cause duplication of data entry for the receiver (CEN/ISSS e-
Invoicing Focus Group, 2005).
184.108.40.206 Electronic invoicing through a consolidator
Many companies find using a consolidator convenient. A third party such as a bank or an
ASP (Application Service Provider) operator is used to overcome differences in networks,
communication protocols and message formatting standards by converting the invoice data
between the sender and the receiver. The invoices are electronic throughout the process and
even though the invoices are formatted differently, they are structured and intended for
automatic processing. Consequently, a company only has to have one format of invoices
instead of matching formats for every recipient (CEN/ISSS e-Invoicing Focus Group,
The consolidator is responsible for the sender’s invoice traffic, the format of the invoice and
the transfer to the recipient. The electronic invoices to be sent are gathered from the sender
by the consolidator. Credit invoices can be sent separately or included. The consolidator
subsequently checks the sender and its right to send electronic invoices and distributes the
electronic invoice to the recipient according to the recipient’s identifier. If the recipient
cannot be identified or if the data is erroneous, an error message is received. If the recipient
uses a service provider, it is his/her responsibility to collect his/her electronic invoices. If
the service provider is a bank for example, electronic invoices could be accessed when
collecting bank statements or paying invoices (e-invoice consortium, 2005)
220.127.116.11 Electronic Invoicing under trading partner framework agreement
In this scenario, the business partners have an agreement for a period of time stating the
conditions for trade. The business process is agreed upon as well as products and prices. A
Price List transaction may be used to change products and prices during the period. A Call-
off/Order transaction is used for individual deliveries followed by an order response. When
the sale is fulfilled an invoice is used to request payment (CEN/ISSS e-Invoicing Focus
18.104.22.168 Direct Electronic Invoices
An electronic invoice can also be collected directly from the electronic invoice provider or
straight from the sender. Software-specific direct connections have been developed for key
accounting and workflow applications in association with software providers and ASP-
operators (e-invoice consortium, 2005).
2.3.3 Benefits to issuers and recipients
The potential benefits have caused a fast growing interest in electronic invoicing. According
to Luo et al. (2000), the most obvious benefits for using electronic invoicing are the
reductions in time and cost when processing invoices. It has been estimated that around 200
million business-to-business (B2B) invoices and 150 million business-to-customer (B2C)
invoices are sent in Finland yearly. On average, when including both issuer’s and
recipient’s costs the handling of a B2B invoice is around EUR30. Eighty percent of this
amount constitutes the handling of a received invoice (e-Finland Forum, 2004).
The process of receiving an invoice payment in Finland is largely automated using
reference numbers, with the introduction of electronic invoicing, the recipient’s accounting
and payment of invoices could be automated as well. The cost reduction could be up to as
much as 80-90% (Vahtera, 2005). In addition, the automation of the invoice processing
reduces the risk of incorrect entries. Electronic invoices are also more environmentally
friendly because of its paperless system (Rautajoki, 2003). According to the e-invoicing
focus group, the introduction of electronic invoicing will furthermore aid tax administrators
to implement new tools and procedures for controlling purposes that are less intrusive on
the trading partners. It has also been said to offer better competitiveness to the economy as a
whole if the number of users is large enough (ICT Cluster Finland Review 2005).
The sender of electronic invoices can reap the following benefits:
Lowering of costs of material
Better customer service and cost-savings for customers
Less manual work process - enhanced efficiency and reduced human error risk
Possibility for electronic storage
Possibility for outsourcing
The receiver of electronic invoices can reap the following benefits:
No manual invoice entry
Automation of VAT services
Fast circulation of invoices
Less errors in data entry and handling
Automation of accounting
Reduced cost of invoice handling (Tieke, 2005, Elma Electronic Trading, 2006)
Typically, large companies have more bureaucracy when processing an invoice. Different
companies have different processes for handling invoices and different invoices have
different handling requirements. Pauli Vahtera and Heli Salmi have made a calculation (see
table 2.1), where two companies with different needs are compared on the time it takes to
handle an incoming paper invoice as well as the time and cost-savings when using
Company A Paper Electronic
(based on Internet and EDI in Effective Accounting Invoice
Handling phase Time (min) Time (min)
Opening the mail 1
Date stamping the invoice 1
Copying the original 1
Organising copy in a folder according to alphabetical 1
Checking and posting the invoice 2
Entry into the purchase ledger 2
Checking 1 1
Approval 2 1
Posting the invoice to the data system 1,5
Approval of payment 0,5
Archiving the invoice (in numerical order) 1
In-house mailing (9 copies of the invoice) 10
Error handling (10% of invoices) 2 1
TOTAL (min) 26 3
Hourly rate 34 EUR
Minute rate 0,6 EUR
Cost / invoice EUR 14,57 1,68
Savings / invoice 12,89 EUR
Savings as a percent 88,5 %
Company B Invoice
(based on Paperiton kirjanpito [Paper-free
Bookkeeping] by Vahtera-Salmi):
Handling phase Time (min) Time (min)
Purchase invoice from the post
Supplier number, receipt stamp and receipt number 0,5
marked onto the invoice
Entry into the ledger 1
Entry into the order processing system
Finding the despatch note for the invoice; the despatch
note is clipped to the invoice, the invoice is placed in a
post box, someone takes it to the purchase team
Approval in the team 0,5
The invoice returns to bookkeeping 10
A copy of the invoice is taken
The despatch note is stapled to the copy 0,5
The copy and the despatch note are placed into a 0,5
folder in receipt order
The original invoice is approved
Approval 0,5 0,5
The chief accountant checks the invoice posting 0,5
The invoice is taken from the ledger and posted 0,5
The invoice is archived in receipt number order 0,5
TOTAL (min) 14 1,5
Hourly rate 34 EUR
Minute rate 0,6 EUR
Cost / invoice EUR 7,8 0,8
Savings / invoice 7,0 EUR
Savings as a percent 89,3%
Table 2.1 Costs of paper invoices versus electronic invoices (Elma Electronic
2.4 Techniques and standards
There are many different techniques and standards available on the international market for
electronic invoicing. As this thesis’ focus is on the Finnish market I will concentrate on the
techniques and standards used in Finland. The main ones are the eInvoice, the Finvoice,
TEAPPSXML, PostiXML, VaLo and EDIFACT but there are others.
The eInvoice was developed by an organisation which was formed to facilitate the
development of electronic invoicing in Finland , the e-invoicing consortium. The e-
invoicing consortium agreed on technical data content as well as the information to be
included in the electronic invoice supported (the eInvoice). The eInvoice standard has two
possibilities: XML or ASCII. The Finvoice was introduced by the Finnish Bank Association
and was developed according to ebXML. In addition to these, TietoEnator has its own
product TEAPPSXML which is compatible with both the eInvoice standard and the
Finvoice. Having many standards on the market is not a problem as the service providers
transform the electronic invoices to the format required. In Finland, large corporations still
use EDIFACT but according to Vahtera this will diminish as the other alternatives are
stronger and less expensive (Vahtera, 2005).
2.4.2 EDIFACT & ANSI
EDIFACT (Electronic Data Interchange for Administartions, Commerce and Transport) and
ANSI (American National Standards Institute) are traditional standards of EDI. These
standards set fields for documents such as purchase orders, invoices and payments
(Hasselbring & Weigand, 2001).
2.4.3 XML (eXtensible Markup Language)
XML is a mark-up language and is used to create self-descriptive data. It is a meta-
language. XML is independent of any application or platform and both humans and
machines can read its syntax. (Hasselbring & Weigand, 2001) It has been widely used to
describe data and creating mark-up languages (Deitel et al, 2003).
Rosetta Net a consortium that develops an electronic business framework for business
processes definition. It is a non-profit organisation and it is creating open standards so that
supply-chain partners can coordinate business processes more efficiently. To accomplish
this goal, RosettaNet has developed dictionaries and frameworks that assist organisations in
implementing business-process standards. The core properties of RosettaNet is the
definition of terms called PIPs (Partner Interface Processes). PIPs are XML specifications
and describe processes and business documents shared in the supply chain (Deitel et al,
2003). The RosettaNet framework is for example used by Elma Electronic Trading in their
Elma for RosettaNet.
Figure 2.1 Elma for RosettaNet (Elma Electronic Trading, 2006)
2.4.5 EbXML (Electronic Business XML)
This technical framework was developed jointly by OASIS (Organization for the
Advancement of Structured Information Standards) and UN/CEFACT (United Nations
Centre for Trade Facilitation and Electronic Business) to standardise XML business
specifications and make it possible for XML to be used consistently for electronic business
data exchange. EbXML provides a technical framework through which companies
regardless of size and industry can communicate and exchange data using XML or EDI
syntax. EbXML draws on extensive experience with EDI syntax and semantics and on
current initiatives for converting EDI to XML (ebXML forum, 2005). In Finland, the
Finvoice was developed using ebXML.
BizTalk is a tool developed by Microsoft for communication between different systems.
With BizTalk, data can be marked up as XML and subsequently transferred between
different applications regardless of different platforms or programming languages. BizTalk
actually includes three things; the BizTalk Server, the BizTalk Framework and the BizTalk
Schema Library. The server parses and translates every message and the framework is a
schema structuring the messages to be sent (Deitel et al 2003). Biztalk has been used in
Finland for electronic invoicing solutions by ASP operators.
2.5 Electronic invoicing in Finland
As Finland is one of the forerunners in electronic banking, there is considerable expertise in
the electronic business area and the internet banking and payment infrastructure is greatly
developed. In addition, there has been a great deal of collaboration between banks, ASPs
and others and this has resulted in a development of functional and cost-efficient
procedures, standards, models and instructions for electronic invoicing. As a consequence,
Finland has proven to be a good market for solutions for electronic invoicing to be
developed in (Vahtera, 2002).
2.5.2 Solutions available
Electronic invoicing has been used in Finland over 30 years already. The first electronic
invoices were sent between large corporations according to internal standards. In the 1970s,
the KOTVA-standard was introduced and many large businesses traded invoices. At the end
of the 80s, the international EDIFACT standard was established which is still used by big
firms today (Vahtera, 2002). In 1998, payment of electronic invoices through the internet
was commenced. International credit card-companies have their own electronic invoices
and also other large international corporations have their own systems which are based on
internal standards, EDIFACT and US ANSI standard. Invoices in pdf-format or email
invoices have also been used as electronic invoices. The Post’s eKirje can be printed but is
electronic in the seller’s accounting system (Vahtera, 2002). Tietoyhteiskynnan
kehittämiskeskus (Tieke, 2005) has developed a website where electronic invoice users can
register when they are able to receive and send electronic invoices (Tieke, 2005). The
biggest players on the Finnish market are according to Heli Salmi, Elma Electronic Trading,
Nordea, TietoEnator and BasWare. In this section, I will describe some of the most
common solutions available on the Finnish market.
22.214.171.124 The eInvoicing Consortium
The e-Invoice consortium was initiated in 1999 and the eInvoice solution was developed
(Elma Electronic Trading, 2006). Providers of electronic invoicing and banks in Finland
agreed upon a common standard so that electronic invoices could be sent and received in a
secure manner in a common trunk network. Consequently, invoicing between sellers and
buyers is made in a uniform way even though they are using different providers.
The eInvoicing consortium is focused on securing the eInvoice and making it reliable. The
providers install the connections the customer needs to be able to send and receive
electronic invoices. This can be done in collaboration with the financial administration
software providers or ASP operators or independently. The banks and the providers then
handle the set-up, maintenance, support and backup of the network connections as well as
format conversions that might be necessary to let the customers use the method of receiving
and sending e-invoices best suitable (e-invoice consortium, 2005).The parties in the
consortium transmit the data to the receiver according to the technical address in the
invoice. Standards for the invoice data has been developed by the consortium (Elma
Electronic Trading, 2006).
Figure 2.2 eInvoice model (e-invoice consortium, 2005)
The eInvoicing model is based on EDI (Electronic Data Interchange). EDI includes the
electronic transfer, from computer to computer, of commercial and administrative data with
the use of an agreed standard. In other words, EDI can mean both EDIFACT messages as
well as XML messages. Electronic invoicing is based on agreements between the parties
• the invoice issuer and the service provider or bank
• agreements between the parties in the consortium
• the invoice receiver and the service provider or bank. ¨
Verification of origin is established by the use of VPN (Virtual Private Network) protocol.
The VPN protocol secures the origin, integrity and confidentiality of the message. In FTP-
connections the FTP (File Transfer Protocol) user is identified with a user id and a
password. Banks demand MAC (Message Authentication Code) digest in their connections.
The verification of integrity is verified with start and end segments.
In international transactions the transmission can be secured by:
• The invoice sender and the receiver make an EDI-agreement where the security
methods are established
• Verification of origin is established by using VPN protocol
• The verification of integrity can be secured by a digest, which is included in the
data. In all cases the integrity of the data can and will be verified with start and end
segments (Elma Electronic Trading, 2006).
126.96.36.199 Elma E-Invoice
Elma is part of the eInvoicing consortium and offers several solutions to their customers
depending on the customers’ situation. Elma offers the Elma eInvoice, the Elma eInvoice
Basic and Elma eInvoice.com. The Elma eInvoice is suitable for large and mid-sized
organisations and the Elma eInvoice Basic and the Elma eInvoice.com are more fitted to
small and medium-sized companies. All of the products support several standards, message
descriptions and operational models available on the market. In addition, all Elma e-invoice
products are based on the standards and operating procedures identified by the eInvoice
consortium. Customers can therefore choose the method of receiving and sending electronic
invoices that suits them best. Elma’s products support, among others, the following
formats: PDF, TIFF, eInvoiceXML, eInvoice ASCII, TEAPPSXML (TietoEnator), EPL
(Finland Post Ltd), and EDIFACT.
The Elma eInvoice is made to look like a regular, printed invoice. According to Elma
Electronic Trading, this aids checking, circulation and archiving of the electronic invoice. It
can easily be linked to the organisation’s invoicing system. The recipient can receive the
invoice in whatever format required, whether it is another Elma eInvoice, an EDI invoice or
in paper format (printed by the Elma Invoice service). Invoice payment information is
automatically integrated into the recipient’s system. The invoices can be accessed and
viewed from the organisation’s ERP system. It can be printed, saved on a workstation or
forwarded by e-mail.
If the recipient uses the eInvoice Repository Connection (eRC) the Elma eInvoice can be
received directly into the financial information system. The eRC uses the Elma data
warehouse technology and an FTP (File Transfer Protocol) application interface to make
this possible. The recipient’s software supplier is then responsible for transferring the data
and integrating the invoices. With the eRC Plus, the recipient can also receive electronic
invoices from other operators and banks who are part of the eInvoice consortium.
EDI invoices are transferred automatically using the ElmaEDI connection from the sender’s
ERP system to the receiver’s system. Orders and order confirmations often forms the basis
for EDI invoices according to the SCM (Supply Chain Management) - model. EDI invoices
are mainly for companies sending many invoices.
For customers wanting invoices in paper format, the Elma Invoice service can be used. The
issuer sends the invoice files electronically to Elma and the Elma Invoice service prints the
invoices and sends them to the customer. A customer can furthermore receive scanned
paper invoices by using the Elma eCom Connection. Paper purchase invoices are then
converted into electronic format such as PDF or TIFF files.
In addition to the connections in Elma’s products, Elma eInvoices can be received through
several ASP operators. The operators then transmit the invoice data between themselves and
the operators are responsible for their service. Each operator can use different ways to send
the invoice data. The Elma eInvoice can be transmitted through the Internet as well as
through fixed connections. Currently, the Elma eInvoice supports the following distribution
channels: Finland Post Ltd, TietoEnator, Elisa Solutions Ltd, Proha Oyj, ProCountor.Com,
WM-data Novo, and BasWare Business Transactions.
Elma eInvoice Basic uses the same technology and distribution channels as the eInvoice but
has limited customisation.
The Elma eInvoice.com is a service where companies can send and receive invoices
electronically without installing a new application to their own system. An internet browser
is all that is needed. The invoices are subsequently sent straight to the recipient’s system.
For security, the invoice traffic is encrypted using SSL (Secure Socket Layer), MAC
(Message Authentication Code) and PATU (Banking standard for secure customer
connections). Automatic watchdog technologies are used to control the buffers for the
invoices and the servers are placed safely and securely and under constant supervision
(Elma Electronic Trading, 2006).
The European Committee for Banking Standards (ECBS) introduced in July 2003 a
standard for electronic invoicing called the electronic Payment Initiator (ePI). The ePI was
created to be used both domestically as well as internationally. In Finland, the ePI standard,
SOAP (Simple Object Access Protocol) and ebXML-compliant descriptions were employed
to develop a format for electronic invoices called Finvoice (ebxml forum, 2005). The
Finvoice was created by Finnish banks and uses XML syntax. The Finvoice can as such, be
presented in a browser in a form similar to a paper invoice as well as be understood by an
application. Consequently, the Finvoice can be printed as a paper invoice and processed
traditionally if the need arises (The Finnish Bankers‘ Association, 2005).
A Finvoice consists of three things; a transmission frame consisting the information
necessary for forwarding the invoice, a specification of the information needed for approval
and accounting purposes and payment information. As mentioned earlier, the Finvoice can
be opened for viewing and printing using a normal browser but it can also be processed
fully automatically (The Finnish Bankers‘ Association, 2005).
2.6 Laws and regulations
According to Directive 2001/115/EC, all Member States must accept documents or
messages in paper or electronic format as invoices if they meet the conditions outlined in
Directive 2001/115/EC. It is also stated in the Directive that Member States can require
special conditions, procedures or measures according to the national requirements. This can
cause conflicts in cross-border trading. In such cases, the VAT rules of the issuer’s Member
State will apply (e-Invoicing Focus Group, 2005).
Directive 2001/115/EC entails requirements on electronic invoices regarding the guarantee
of integrity of content and authenticity of origin for VAT purposes. As stated earlier, an
electronic invoice should be accepted as long as the authenticity of the origin and the
integrity of the contents are guaranteed. The authenticity of the origin is to know for a fact,
the identity of the sender of the electronic invoice. The integrity of the contents means that
any changes that have occurred during transport or storage can be detected. This should be
- an Advanced Electronic Signature (AES).
- or an electronic data interchange (EDI).
- or any other electronic means subject to acceptance by the Member State in question.
The conditions will if necessary be adjusted according to any future technological
developments in this field by 31.12.2008 the latest.
In addition to these conditions the following need to be considered:
- some Member countries might require a summary document in paper format of the
- some Member countries might require prior notification but only until the end of 2005.
- signed invoices should not be required.
- regarding cross border invoicing, the terms and conditions of the agreement and of the
acceptance procedures are to be according to the regulations of the State in which the goods
or services are supplied.
- regarding non EU countries, the Member State where the taxable person is registered can
require specific conditions for electronic invoices issued from a country with which there is
no legal agreement regarding invoices if the goods and/or services are supplied in the
According to the e-Invoicing Focus Group (2005), the Directive furthermore states that
copies of all invoices whether received or issued are to be stored. The authenticity of the
origin, the integrity of the content and the invoices’ readability have to be guaranteed
throughout the period of storage. The content may not be changed and it has to be legible
throughout the period. If the invoices are stored in message format then the required
directory and code sets required for conversion to clear format must also be stored. The
place of storage is optional as long as the invoices or the information stored are available
without unnecessary delay to the authorities. Invoices are required to be stored for fiscal
administration for a period of six years (CEN/ISSS e-Invoicing Focus Group, 2005). In
Finland, electronic storage of invoices is allowed according to the Finnish accounting laws
as long as they can be retrieved easily (kirjanpitolautakunnan yleisohjeet, 2000).
The Finnish Ministry of Finance has proposed modifications in the national VAT legislation
based on the EU directive. These modifications were accepted by the Parliament in
February 2003. There will be no specific requirements for electronic invoicing in Finland.
The proposal declared that there have not been any taxation difficulties in electronic
invoicing and legislation should not include too strict requirements (Elma Electronic
As presented in this section, there are a number of options available for companies
interested in using electronic invoicing with the two main ones being electronic
invoicing using a consolidator and making a solutions especially fitted to serve the
company in question. The benefits of using electronic invoicing are several but the most
important ones are the savings a company can make in time and cost. In addition, entry
errors are reduced. The main products on the Finnish market are the eInvoice, the Finvoice,
TEAPPSXML, and EDIFACT. The eInvoice standard uses XML or ASCII, the Finvoice
was developed using ebXML and the TEAPPSXML is compatible with both the Finvoice
and the eInvoice. In Finland there are no laws especially for electronic invoicing.
3 Theories and prior research
The vast availability of new information technology, as well as the nature of the “global
village”, have changed the way organizations work. For example, adoption decisions have
now become more difficult for management to make (Dasgupta et al 1999). Adoption of
information technology has been greatly studied in recent years and has been defined as the
decision to invest in, or to accept, a new technology (Dasgupta et al, 2002) and is
characterised by the making of the adoption decision and the investment following the
decision (Dasgupta et al 1999). As there is no set framework made for studying the attitudes
towards adoption of electronic invoicing I have decided to use a selection of theories on IT
adoption as a basis for my research. In this section I will present these theories and what has
been discovered to determine attitudes towards new information technology and its
adoption and how I will apply them in my study on attitudes towards electronic invoicing
and its adoption.
3.2 Theories of adoption of new information technology
Adoption of new information technology has been widely researched and there are several
theories that have been used to study this subject, for example the Theory of Reasoned
Action, the Technology Acceptance Model, the Motivational Model, the Theory of Planned
Behaviour, the Innovation Diffusion Theory and the Social Cognitive Theory (Venkatesh et
al 2003). A selection of these will be introduced below.
3.2.2 Technology Acceptance Model
The Technology Acceptance Model (TAM) was proposed by Davis in1989 as a tool to
predict acceptance of information technology. It has since then been widely used and
validated. The model states that adoption of information technology is dependent on the
perceived ease of use and the perceived usefulness of the technology by the user. More
recent research has extended the model to include factors such as perceived system quality,
performance and prior use. Social norms and prior performance showed to have an
influence on technology adoption. The TAM has mainly been used to predict adoption of
new technology by individuals but not by organisations (Dasgupta 2002). Many other
theories on information technology adoption are based on the TAM and previous research
often refers to the model. For example, Pavlou (2003) states that internet technology
acceptance can be partially explained with the TAM.
Attitude Behav ioural Actual
External variables Toward intentio to use
n systemu se
ease of use Technology Acceptance Model (TAM)
Figure 3.1 The Technology Acceptance Model (TAM) (Gullkvist, 2005)
3.2.3 The Theory of Reasoned Action and the Theory of
The Theory of Reasoned Action, TRA and the Theory of Planned Behavior, TPB, are both
well-known theories of intention and have been used with success in many different
settings. These two theories suggest that behaviour can be predicted according to the
intentions of the person in question. The intentions are in turn influenced by the person’s
attitude (favorable or unfavorable evaluation) and subjective norm (perceived social
pressure to perform) towards the behavior (Grandon and Mykytyn 2004).
The TRA involves using an individual’s attitude and his/her subjective norm towards the
behavior to predict intentions (Riemenschneider and McKinney, 2001-2002). The TRA has
been used to gain understanding of behavior and has been applied in many behavioral
science disciplines. The TRA has for example been used by Davis, Bagozzi and Warshaw
to examine user acceptance of computer technology and their conclusion was that
individuals’ use of computers can be predicted based on their intentions. (Riemenschneider
and McKinney, 1999, Grandon and Mykytyn, 2004).
The TPB builds on the TRA and has the addition of perceived behavioral control. (PBC).
PBC involves the influence of past experiences as well as anticipated barriers. The theory
with attitude, subjective norm and PCB is documented using belief-based measures and
direct measures (Grandon and Mykytyn 2004). This theory has been validated in many
different settings and situations and has proven to be useful in predicting managerial
behavior in regards to adoption of new information technology (Riemenschneider and
McKinney, 1999, Grandon and Mykytyn 2004).
Behav ioural Actual
Theory of Reasoned
Normativ Belief an
e s d Action (TRA)
M otivation to comply
Figure 3.2 The Theory of Reasoned Action (TRA) (Gullkvist, 2005)
3.2.4 Technology-Organization-Environment framework
The technology-organization-environment (TOE) framework uses three aspects of a firm’s
context as influences on adoption and implementation of an innovation: technological,
organizational and environmental context.
The technological context involves the internal and external technologies that are relevant
to the firm. The organizational context involves the size of the firm, centralization,
formalization and complexity of managerial structure, the quality of its human resources
and the availability of internal slack resources. The environmental context entails the
environment in which the firm is doing business i.e. industry, competitors, resources, and
government (Zhu et al 2004).
The TOE framework has been confirmed by many researchers such as Swanson, Kuan and
Chau and Iacovou. Iacovou et al (1995) discusses adoption of EDI by small firms. The
TOE-framework is used and different adopters and non-adopters are identified.
3.2.5 The theory of diffusion of innovation
The theory of Innovation Diffusion is increasing in popularity as a reference theory for
studying information technologies. It provides tools to assess adoption and identifies factors
that facilitate or inhibit technology adoption and implementation. It has many similarities to
the TAM. For example, diffusion theory involves relative advantage and complexity, which
can be seen as the same as TAM’s perceived usefulness and perceived ease of use. Fichman
(1992) explains that factors facilitating or hindering adoption of technology that can be
identified by diffusion innovation theory include characteristics of the technology,
characteristics of adopters, how adopters hear about the technology and how they are
persuaded to adopt (Fichman 1992).
3.3 Previous research-findings on factors affecting attitudes
In this section, previous research findings will be presented. Previous research in this area
has shown the following to be motivations for IT adoption
• sustaining competitive advantage
• improvement of efficiency
• protecting market share
• assisting in innovative activities
• increasing productivity and profitability (Wang et al (2004))
In addition to these motivations, many other factors have been introduced and validated or
discarded. I have decided to include personal factors, organizational factors, environmental
factors, technological factors and economical factors as these are the most prevalent in
3.3.2 Personal factors
Personal factors include attitude, perceived benefits, perceived ease of use and perceived
usefulness. These are included in the theories introduced in the previous section such as the
TAM and the TRA. Chau (2003) uses the TAM when studying acceptance of internet
banking but extends it by adding the variable attitude. In Chau’s study, perceived ease of
use showed to be the most significant determinant of acceptance. He therefore goes on to
conclude that perceived ease of use will be of importance for any new technology in the
early days of adoption. McCloskey (2003-2004) also found in her study that perceived ease
of use and perceived usefulness were determinants of acceptance. In addition, Gullkvist
(2005) learned in her study of the electronic paper in Finland that perceived usefulness and
perceived ease of use were important factors affecting attitudes toward the electronic paper.
Pavlou (2003) proposes an e-commerce acceptance model that draws on the TRA. He states
that perceived trust and risk are important variables when predicting B2C e-commerce
acceptance. He found that perceived usefulness was a determinant of acceptance but the
importance of trust is due to the high level of uncertainty concerning on line transactions.
The adopters of web-based e-commerce in Riemenschneider and McKinney’s study (2001-
2002) had stronger beliefs as to the advantages to be gained than non-adopters
(Riemenschneider and McKinney 2001-2002). This was also found in the research made by
Wang et al (2004) where higher perceived benefits led to a greater motivation to adopt.
Iacovou et al (1995) discovered in their study of EDI adoption in small firms that there was
low awareness of the benefits of EDI before adoption. As a consequence, the relationship
between perceived benefits and adoption of EDI was moderate (Iacovou et al, 1995).
3.3.3 Organisational factors
Organizational factors include culture, ownership, management skill and support among
others. Dasgupta et al (1999) discovered that if an organization has a high performance-
oriented culture the level of computerization tends to be higher. This type of culture
emphasizes people, team, detail, outcome orientation and innovativeness. Companies
sustaining a stability-oriented culture were believed to be less likely to adopt new
information technology as they tend to resist change but the study could not find any
support for this theory. The conclusion was that even change-resisting firms need to adopt
some amount of new technology to stay competitive. Foreign or domestic ownership did not
show to be significant either (Dasgupta et al 1999).
Chong (2000) identifies managerial factors such as lack of managerial and or technical skill
that influence adoption or non-adoption. In addition, lack of managerial support has been
found to influence adoption. This has been verified by Wang et al (2004) where strong
support from top managers was shown to have positive influence on IT adoption.
Availability of qualified personnel is another important factor discussed by Bertschek and
Fryges (2002). Dasgupta et al (1999) also found that greater involvement of Information
Systems staff in the decision making regarding adoption had a negative influence on
adoption. However, Gullkvist (2005) discovered that managerial support as well as IT
support did not have a big effect on the attitudes of accountants and auditors and states that
these factors affect actual usage and not attitudes.
3.3.4 Firm Size
Firm size is one of the most frequently studied factors on adoption and has been validated in
many different settings as a determinant of adoption of new information technology.
Riemenschneider and McKinney (2001-2002) found in their study of belief differences in
small business adopters and non-adopters of web-based e-commerce using the TPB, that
large firms were more likely to adopt e-commerce than small firms. This was also evident
in Bertschek and Fryges‘(2002) study of German companies regarding B2B e-commerce
adoption. Firm size is a factor that determines adoption, the larger the firm the more likely
adoption is. Dasgupta et al (1999) discovered the same thing. The degree of
computerization was found to be larger in larger firms. Iacovou et al (1995) looked at the
relationship between firm size and adoption of EDI and stated that adopters tend to be larger
firms (in terms of sales volume) than non-adopters. This is a result of the resources that are
available to the firm. Size measured as number of employees on the other hand does not
seem to have an impact (Iacovou et al 1995). Kelley and Helper (1999) state, that a
business’ likeliness to adopt new technology is a function of its organizational capabilities
in relation to its size and its history with similar technologies. Larger firms are more likely
to adopt new technology due to the fact that large firms have more liquidity and can
therefore more easily afford it. If the firm in addition has experience of similar technology
adoption the uncertainty is reduced. Then management has some idea of the disruption it
will cause and how to minimize it. This will reduce the cost of adoption and therefore it is
more likely to happen. Wang et al (2004) contradicted Zhu’s (Zhu et al, 2002) claim that
large firms are more likely to adopt commerce. Wang et al claimed that any firm, large or
small can adopt commerce and do business on the Internet. But their study contradicted this
claim and proved yet again that size does matter.
3.3.5 Technology characteristics
Technological factors such as the perceived relative advantage, compatibility, trialability,
complexity, observability have also been noted in Chong‘s study (2000). Wang et al (2004)
provide a new categorizing method for IT adoption using internal and external factors.
Internal factors include firm size, system support readiness and a clear IT strategy.
Accessibility, alliance services and personalization were also found to be important in
Chau‘s study of internet banking. Unexpectedly, task familiarity proved to have low
importance (Chau, 2003). Gullkvist (2005) found that trust in the technique was an
important variable determining perceived usefulness and perceived ease of use.
3.3.6 Environmental factors
Kelley and Helper (1999) claimed that if the firm is practicing in an environment where the
industry mix is diverse it is more likely that management hears of new technologies and the
benefits and therefore it is more likely that they adopt the technology. In addition, in such
an environment the new technology and the people needed to implement it are more
available. Smaller firms are especially influenced by their geographical and network
positions. In addition, Bertschek and Fryges (2002) found that international pressure is also
important as well as the industry the company is in. If other firms are adopting the
technology they have to follow. This was the most significant factor in their study. In
Chong’s study (2000), external factors such as fluctuating interest rates, reliability of
supply, competition, and critical mass were noted as important. If critical mass is limited
there might be a lack of infrastructure, suitable platforms and compatible technological
standards. In addition, national infrastructure and government support is also important.
3.3.7 Competitive effects
Dasgupta et al (1999) found in their study that firms facing heavy competition were more
likely to adopt new information technology than others. Wang et al (2004) found that the
network position in a supply chain is significant; the closer to the core the higher the
likeliness of adoption. Other competitive factors they found were stable business network
linkage, inter-firm collaboration and mutual IT adoption along the supply chain.
Zhu et al (2004) uses the Technology-Organization-Environment Framework to investigate
factors which may influence the value of e-business. They found among other things that
competitive pressure is a factor driving firms to adopt e-business. Iacovou et al found in
their study that the main reason for small firms to adopt EDI was external pressure
especially from trading partners (Iacovou et al, 1995).
3.3.8 Economic factors
Computer hardware and software prices also showed to influence adoption decisions
(Dasgupta et al 1999). Adopting new information technology not only requires investments
in hardware and software but also employee training and system integration (Zhu et al,
2004). Transaction costs per invoicing need also be considered. According to Heli Salmi,
who is coordinator of expert services at Elma Electronic Trading, cost was more of an issue
earlier. Nowadays, it is important that the cost per invoice is lower than postage fees. This is
also dependent of the size of the firm.
3.3.9 Paperless Accounting
Benita Gullkvist has made a study called the Electronic Paper in Accounting – Studies in
Attitudes and Consequences among Accounting Professionals (2005). Her main research
question was how accounting professionals in Finland view electronic accounting systems.
She used both surveys and interviews among accountants and auditors employed in
accounting agencies to accomplish this aim. Gullkvist has based her study on theories such
as the Technology Acceptance Model and the Theory of Reasoned Action among others.
She found that perceptions of the usefulness and ease of use of the system were important
factors determining attitudes towards paperless accounting. In addition, she found
experience, institution conformity (work routines, accounting norms, and the organization),
technical factors, economic factors, social norms and attitudes towards using to be
important. She could however, not find support for organizational factors such as
management support (Gullkvist, 2005).
Many theories have been developed about attitudes towards and implementation of new
information technology. In this section, I have introduced a selection of these; the
Technology Acceptance Model (TAM), the Theory of Reasoned Action (TRA), the Theory
of Planned Behaviour (TPB), the theory of diffusion of innovation and the Technology-
Organisation-Environment (TOE) framework. The theories that will be mostly used in my
research are the TAM and the TRA with some aspects of the TOE framework as well.
There has also been an overview of previous research findings. Many factors have been
verified as having an effect on attitudes towards new technology and adoption decisions and
a collection of these have been introduced in this section. I have included personal factors,
organizational factors, environmental factors, technological factors and economical factors
as these are the most prevalent in previous research. My research has furthermore been
influenced greatly by Benita Gullkvist’s study (2005) called Electronic Paper in
Accounting. Studies in Attitudes and Consequences among Accounting Professionals and
this study has also been introduced in this section.
4 Research model and Methodology
As attitudes towards electronic invoicing and its adoption in Finland have not been studied
previously, the aim of this research is to fill this gap. To accomplish this, a questionnaire
was sent to SMEs in Finland dealing in B2B activities. In the study, Benita Gullkvist’s
research (2005) was used as a roadmap. She studied the attitudes towards electronic
accounting among accountants and auditors and her questionnaire served as a model to
mine. The theories mentioned previously such as the TAM and the TRA were also used to
develop the questionnaire to investigate the attitudes toward electronic invoicing and its
adoption in Finland. In this section I will develop the research model and the hypotheses to
4.2 Research model and hypotheses
Using Gullkvist’s (2005) model as inspiration, my research model is similarly based on the
TRA-model and the TAM-model. These models have been validated in the past and have
proven useful in similar circumstances as indeed in Gullkvist’s study. Figure 4.1 has been
developed using Gullkvist’s research model. Since the purpose of the study is to find out
about attitudes, the focus is as in Gullkvist model, instead of on actual usage, on intention to
use. Also, since electronic accounting and electronic invoicing are quite novel, it might not
be possible to measure what affects actual usage.
There are a few differences between Gullkvist’s model and mine. The intention to use is
influenced by the attitudes towards usage and perceived usefulness in both models. In my
model however, intention to use is also affected by perceived ease of use. In Gullkvist’s
model, intention to use is influenced by a variable called social pressure which involves
attitudes among co-workers and the like. I have changed this factor to environmental factors
which involve customers, suppliers and competition as I felt this was more appropriate
since I am studying the attitudes of financial managers in SMEs. Attitude towards usage is
in my model, similar to Gullkvist’s model, affected by perceived usefulness and perceived
ease of use, but also by organisational factors and technical factors. Technical factors are
also affecting perceived ease of use in my model whereas in Gullkvist’s model they only
affect perceived usefulness. Gullkvist also has an additional factor in her study called
accounting practices which I excluded since my study is about electronic invoicing.
Personal factors Perceived
usage Intention to use
Technical factors Perceived
ease of use
Figure 4.1 Research model
In this segment, personal factors of the respondent such as age, sex, work experience as
well as experience of electronic invoicing are studied, to see if they affect the attitudes
towards electronic invoicing. Gullkvist (2005) discusses the likelihood of demographic
variables affecting attitudes towards electronic accounting. She points out that previous
research have found that older people and people with longer work experience are more
prone to feel negatively towards new technology. On the other hand, there is research that
point out that previous experience with the technique in question is associated with positive
attitudes (Gullkvist, 2005).
Previous experience of electronic invoicing or similar techniques affects perception of
Age and previous work-experience influence perceptions of electronic invoicing.
In this segment, factors such as availability of IT personnel, support from management and
the firm’s business activities are studied. Dasgupta et al (1999) investigated the possibility
that the availability of IT personnel to train employees and to facilitate the adoption process
have been influential on decisions to adopt a new product, but found that this had little
significance. Iacovou et al, (1995) found that most respondents were concerned with the
lack of know-how. I would like to see if the same holds true in this situation.
In addition, individuals seldom have the right to decide on investment decisions or new
information technology usage in the company and as a consequence the perception of
management support could influence attitudes (Fichman, 1992). Gullkvist (2005) found in
her study that implementing electronic accounting would not only introduce new
technology but to receive all potential benefits, processes were to be changed as well. I
would like to see whether the perceptions of a change in processes affect the attitudes
towards electronic invoicing.
Having qualified IT personnel in the company affects perceptions of electronic invoicing.
If there is a perception that management would support adoption, financial managers are
more positive towards electronic invoicing.
If there is a perception that changes in processes will be big, managers are less likely to
want to use electronic invoicing
Most firms have not implemented electronic invoicing but will within 5 years
Adoption depends on the business activities of the firm
Outside pressure such as opinions and actions of supplier and customers are studied in this
section. Especially for small firms, it has been found that the actions of suppliers and
competition affect adoption decisions made by SMEs, as small firm are more susceptible to
outside pressure (Iacovou et al, 1995).
Market share is also examined. When a company is faced with a great deal of competition
one of the options to achieve cost efficiencies may be to invest in new information
technology (Dasgupta et al, 1999). As a consequence, if there is little competition, there is
less need to invest in new information technology.
Pressure from suppliers and/or customers can determine intention to use electronic
The larger the market share the less important electronic invoicing will be.
Safety and implementation issues are studied in this part. Kelley and Helper (1999) found
that if a company has implemented similar technology before, it was more positively
inclined towards new technology. As SMEs aren’t likely to have invested in similar
technology before I wanted to see if recent ERP system adoption would affect attitudes
towards electronic invoicing. Trust in the safety of the technique has been found to
determine perceived usefulness and perceived ease of use (Gullkvist, 2005). According to
Heli Salmi, the technical safety of electronic invoicing is perceived as good nowadays and I
would like to see if this holds true. In addition, I wanted to see if electronic invoicing is
perceived to be easy to learn.
If other technology adoption has been made recently, the company is more likely to have a
positive attitude towards electronic invoicing.
Electronic invoicing is perceived as technically safe.
Electronic invoicing is perceived as easy to learn
In this part, economical issues are studied. Previous studies have shown that economical
reasons have an affect on the intention to adopt new information technology (Iacovou et al
1995). As SMEs often have less available financial resources than large corporations, the
costs associated with investing new information technology can be perceived as too high.
Economical reasons are often cited as reasons for not implementing.
Usefulness and ease of use
The perceived usefulness and ease of use is examined in this section. Perceived usefulness
and perceived ease of use have been found to be important determinant of acceptance of
new technology (Chau, 2003, McCloskey, 2003-2004) as well as affecting attitudes towards
electronic accounting (Gullkvist, 2005). Therefore, I anticipate that if electronic invoicing is
perceived as useful and easy to use the attitudes will be positive.
If electronic invoicing is perceived as useful, the attitude towards electronic invoicing is
If electronic invoicing is perceived as easy to use, the attitude towards using it is positive.
If electronic invoicing is perceived as useful, the intention to use is positive.
If electronic invoicing is perceived as easy to use, the intention to use is positive.
Attitudes and intention to use
The attitudes of the respondents are examined here to see whether the intention to use is
positive. Gullkvist’s (2005) results showed that attitudes towards using hade an affect on
the respondents’ intention to use.
If the attitude towards electronic invoicing is positive, the intention to use is positive.
4.3 Data collection
4.3.1 The method
To test the hypotheses, the best method was decided to be conducting a survey. A
questionnaire was formulated and sent to 200 SMEs in Finland by email. The email
contained a cover letter including a link to a web-page where the questionnaire was located.
The respondents were given two weeks to reply. When the first week had gone, a reminder
4.3.2 Questionnaire design
The questionnaire was based on the literature review in general and Gullkvist’s study in
particular. It was designed as a web-page and contained 52 questions. The questions were
either multiple choice or open text. The questions were formulated so that both adopters and
non-adopters of electronic invoicing could answer. As it was considered more likely that
respondents would prefer to answer in their mother-tongue, the questionnaire was translated
into Finnish to increase the response rate. Both the Finnish version and the original English
version can be found in the appendix.
The beginning of the questionnaire contained questions regarding the respondent such as
sex, age and work experience. Next, questions regarding the company were raised. These
included queries about number of employees, number of employees in the finance
department, market share and industry. After this, questions about the amount of import
export and purchase and sales invoices the company handles yearly. In addition, the
respondents were required to convey how many employees were occupied processing
invoices and if the company has domestic or foreign owners. After this, questions regarding
the electronic invoicing status and preferences were raised as well as queries into what kind
of ERP system is in use, when it was implemented and whether there was any automation of
the supply chain.
The next part of the survey included questions where the respondents were asked to express
their agreement or disagreement to posed statements on a five-point Likert scale. Number 1
is set as strongly disagree and number 5 is set as strongly agree. In this section, questions
regarding experience, organizational support, attitudes and opinions are posed.
The final part of the questionnaire invites the respondents to predict when all invoicing will
be electronic in Finland and internationally. The last questions involve the respondent
giving an opinion on the benefits and risks with electronic invoicing as well as the biggest
reasons, in their opinion, for not implementing electronic invoicing.
4.3.3 The Population
The objective of the study was to ascertain the opinions of financial managers and
accountants in small- to middle-sized companies in Finland. The target-group was therefore
individuals working with accounting and finance in small- to middle-sized companies in
Finland. The companies were selected randomly from Hanken’s voitto database according
to turnover (>1 million <100 million euro per year). Two hundred companies were deemed
to form a sufficient sample of the population for the study and were picked from the list
drawn from the database. All the companies in the sample conduct B2B activities.
Since the questionnaire was sent via email, email-addresses for the respondents were to be
found. This was accomplished by searching companies’ websites. This means that
companies that do not have a website were not included in the study neither were those not
posting the email address of the financial manager/accountant on the web. There is
therefore a possibility that the results are somewhat atypical but was deemed necessary
since many small companies outsource their accounting and invoicing.
4.3.4 The response rate
I received 43 replies out of 200 questionnaires sent, which constitutes a response rate of
21,5 percent. This amount of respondents is deemed to be sufficient to make statistical
analyses (Nyberg 1999) and is close to the response rate (26 percent) that Gullkvist (2005)
reached in her study of the electronic paper among accountants and auditors.
4.3.5 Descriptive statistics
Out of the 43 replies, 90, 7 percent were made by women (39 replies) and 9,3 percent (4
replies) by men..According to Gullkvist (2005) who had similar results, there is however, a
tendency that accounting professionals are female and therefore these results are not
Out of 43 respondents, 42 conveyed their age. Out of the 42, the oldest was born in 1944
and the youngest in 1974. The average year of birth of the respondents was 1958. This
means that the sample is a bit older than Gullkvist’s sample where the respondents had a
mean age of 40 years old (Gullkvist, 2005). Gullkvist commented on the fact that older
people can be more resistant to changes and new processes and they are therefore not
enthusiastic towards the idea of electronic accounting.
Years of experience among the respondents varied from four to forty-five with an average
of twenty-two years. The experience of this sample group is therefore longer than in
Gullkvist’s study where the average was fourteen years. This corresponds to the fact that the
average age also was higher.
The respondents were, as previously mentioned, employed by SMEs, the smallest company
employing five people and the largest forty-five people. The average amount of employees
was twenty-two people. In the finance department an average of two people were employed.
The largest number of personnel employed to do finance and accounting was five and the
smallest number was one. Out of the respondents only forty-two answered the question
about how many employees were processing invoices. The number ranged from 0.25 to four
people, with an average of one person. The yearly amount of purchase and sales invoices
was given by forty-one respondents. The amount of purchase invoices ranged from fifty-one
to 5000 with an average of 1746 and sales invoices ranged from 100 to 14000 with an
average of 2130.
Thirty-five respondents gave the amount of import and export the company is involved in.
The average amount of import was twenty-seven percent of purchases with the lowest
amount being zero and the highest 100. The corresponding figure for export was sixteen
percent on average and a low of zero and a high of ninety. Only fourteen people wanted or
could rate the amount of market share the company has. The smallest percentage of market
share was one and the highest sixty. The average showed thirty-two percent. Ninety-three
percent (40 companies) were wholly domestically owned while two companies (4,7
percent) were owned by foreign interests and one company was a mixture of both. Sixteen
companies (37 percent) were from metal-related industries while the others were from
A note should be made however, that the sample could have been affected by the fact that
the questionnaire was sent out electronically. People that are more interested or have a more
positive attitude towards new techniques could have been more prone to participate in the
survey as opposed to those who feel negatively about new techniques.
4.4 The results
To establish whether the hypothesis made in the earlier section have any relevance, a
statistical analysis were performed. All the statistical analyses were made using the statistics
program SPSS. The analyses made were t-tests, to compare the means between two groups
and regression analyses, to see if there were any connections between different variables.
The descriptive analyses were also made using SPSS.
4.4.2 Descriptive analyses
In order to ascertain how common it is for SMEs to have electronic invoicing or if they
intend to implement it in the future, the respondents were asked to select the option that
suited them the best. As can be seen from table 4.1, only three companies, or seven percent
are currently using electronic invoicing, but 32,6 percent or fourteen respondents answered
that they will adopt electronic invoicing within one year’s time and 30,2 percent or thirteen
respondents answered that they will adopt electronic invoicing within three years. Only five
respondents or 11,6 percent said that they will not adopt electronic invoicing at all. This
indicates that most of the respondents have a positive attitude towards electronic invoicing
and it supports hypothesis 6. On average, the respondents also believe that electronic
invoicing will be used by everyone in Finland within 10 years and internationally within 15
Hypothesis 6: Most firms have not implemented electronic invoicing but will within 5
Option Frequency Percent
Are using 3 7,0
Will not employ
Planning to employ within one year
Planning to employ within 3 years
Planning to employ within 5 years
Total 43 100,0
Table 4.1 Current electronic invoicing status
The respondents were asked to select which electronic invoicing solution they were using or
if they were not currently using one which one was their preference. Two of the respondents
using electronic invoicing, stated that they are using a bank as a consolidator and the third
one is using EDI. The respondents’ replies can be viewed in table 4.2. The majority would
prefer using banks as consolidators. As many as 51, 2 percent had chosen this option. Seven
respondents or 16, 3 percent each chose custom-made direct invoicing and through another
service provider as consolidator.
Options Frequency Percent
No answer 5 11,6
EDI 2 4,7
Custom-made direct invoicing 7 16,3
Trough a bank as consolidator 22 51,2
Through other consolidator 7 16,3
Table 4.2 Preferred electronic-invoicing solution
Table 4.3 outlines the replies to the statement that electronic invoicing is hard to
understand. Most, or 44,2 percent, selected the option that they did not agree at all. Only 3
respondents selected options 4 (somewhat agree) and 5 (Fully agree).
1 19 44,2
2 9 20,9
3 12 27,9
4 2 4,7
5 1 2,3
Total 43 100,0
Table 4.3 Electronic invoicing is hard to understand
In the statement that electronic invoicing causes the risk of error to increase most were
unsure. 39,5 percent or 17 respondents selected option number 3 which is non-committal.
However, as can be seen in table 4.4, only 6 respondents had selected an option agreeing
with the statement.
1 10 23,3
2 10 23,3
3 17 39,5
4 3 7,0
5 3 7,0
Total 43 100,0
Table 4.4 There is a risk of error increase when using electronic invoicing
Similar results were found in the statement that electronic invoicing would be tiresome to
learn. Table 4.5 shows that 27,9 percent selected the non-committal option while most, or
37,2 percent said they totally disagreed. This confirm hypothesis 12.
Hypothesis 12: Electronic invoicing is perceived as easy to learn
1 16 37,2
2 10 23,3
3 12 27,9
4 3 7,0
5 2 4,7
Total 43 100,0
Table 4.5 Electronic invoicing is tiresome to learn
The majority of respondents appear quite uncertain on the statement that it is difficult to
check the accuracy when using electronic invoicing. Table 4.6 shows that the tendency is
however leaning towards disagreeing with the statement.
No answer 1 2,3
1 8 18,6
2 12 27,9
3 14 32,6
4 4 9,3
5 4 9,3
Total 43 100,0
Table 4.6 It would be difficult to check accuracy when using electronic invoicing
To the question whether electronic invoicing is technically safe and trustworthy, the
majority were non-committal (37, 2 percent) while 27, 9 percent agreed somewhat and 23, 3
percent fully agreed. This confirms hypothesis no. 11 that electronic invoicing is perceived
to be technically safe.
Hypothesis 11: Electronic invoicing is perceived as technically safe.
1 3 4 5
Figure 4.2 Technically safe
1 1 2,3
2 4 9,3
3 16 37,2
4 12 27,9
5 10 23,3
Total 43 100,0
Table 4.7 Technically safe
Two respondents chose not to answer the question about whether there were any financial
restrictions in the company to implement electronic invoicing. The replies can be seen from
table 4.8. Nineteen respondents (44, 2 percent) disagreed to the statement that there were no
restrictions whereas fourteen respondents (32, 6 percent) agreed. This corresponds to the
hypothesis that economical reasons are often cited as reasons for not implementing. In the
last section of the questionnaire where the respondents could write freely on the most
important reasons for not adopting electronic invoicing the following statements could be
“Modifications to the existing software would be expensive”
“Invoicing costs, sending attachments, software prices and maintenance costs”
“Economic reasons – the investment is too large for an SME”
This suggests that even though the benefits are there, economic factors are considered more
Hypothesis 13: Economical reasons are often cited as reasons for not implementing.
No answer 2 4,7
1 9 20,9
2 10 23,3
3 8 18,6
4 10 23,3
5 4 9,3
Total 43 100,0
Table 4.8 There are financial restrictions in our company to acquire electronic invoicing
There were many different ERP (Enterprise Resource Planning) systems in use and 13
people chose not to respond to the question about what ERP system they were using. The
most prevalent software was Sonet with 14 percent, followed by Nova which was used by
11, 6 percent. Table 4.3 outlines the replies.
No answer 13 30,2
Sonet 6 14
Nova 5 11,6
Oscar 3 7
Liinos 2 4.7
Control 9000 2 4,7
Econet 2 4,7
Visio 2 4,7
Other 7 16,1
Nothing 1 2,3
Total 43 100
Table 4.9 ERP Systems in use in our company
A t-test was made to examine whether those who had implemented the ERP systems
recently i.e. in 2001 or after were more likely to implement electronic invoicing than those
with not so recent experience of IT implementation. There were, however no difference of
significance identified. In addition, a test was also made to ascertain whether the attitudes
were different. There were no significant differences in opinion except in the question about
liking to work with electronic invoicing. Those who had implemented a new ERP system in
the year 2001 or later were more positive towards electronic invoicing. The mean was 3,82
whereas the other group showed a mean of 3,00. The Sig (2-tailed) was 0,074. This gives a
weakly significant result to hypothesis 10.
Hypothesis 10: If other technology adoption has been made recently the company is more
likely to have a positive attitude towards electronic invoicing.
T-tests were also made testing if companies handling a larger amount of invoices were more
likely to adopt electronic invoicing but this was not the case. Importing and exporting did
not seem to effect the implementation decision either.
As previously mentioned, since so many of the respondents were part of the metal industry,
a t-test was performed to see if there were any differences in opinions between the metal
industry and the other industries regarding e-invoicing implementation but none were
discovered. Therefore, it was concluded that hypothesis 7 had no significance, at least not
for the metal industry compared to others.
Hypothesis 7: Adoption depends on the business activities of the firm
4.4.3 Multiple regression analysis
To establish whether the other hypothesis were valid and to find out more about what is
affecting attitudes towards electronic invoicing, a series of multiple regression analyses
were performed. By performing multiple regression analyses it can be ascertained whether a
combination of factors are contributing to a positive or negative attitude towards electronic
Regression model 1
In this model, variables for experience, an organizational factor such as availability of IT-
personnel, a technical factor such as trust in the technique, size in terms of employees and
age are used as independent variables. The model examines whether these variables can
explain how the respondents perceive the usefulness of electronic invoicing.
Y1 = a + X1 + X2 + X3 + X4 + X5
Y1 = Useful in work (Question 11c) -> perceived usefulness
X1 = previous experience of electronic invoicing (Question 1a)
X2 = trust that electronic invoicing is technically safe (Question 9)
X3 = available IT –personnel (Question 2)
X4 = Employees (Question 2 in company information section)
X5 = Year of birth (Question 3 in personal information)