Electronic Invoicing in Finland - attitudes towards
electronic invoicing by financial managers in small- to
              ...
II


SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION




Department: Accounting                          Type of w...
III


Table of Contents


1     Introduction ______________________________________________________ 1

    1.1   Backgroun...
IV


    5.3         Suggestions for further study_________________________________________ 66

    5.4         Conclusion...
V


Figure 4.4 Normality Probability Plot Regression No 2 ______________________________________48
Figure 4.5 Normality Pr...
1


1 Introduction

1.1 Background
In Finland, the Finns can use information networks for almost any everyday activity.
De...
2

The second chapter will discuss electronic invoicing in Finland. A general description of the
traditional invoice will ...
3


2 Electronic Invoicing in Finland

2.1 Introduction
Electronic invoicing is facing a surge in popularity at the moment...
4


2.3     Electronic invoicing

2.3.1             Definitions
According to the e-invoice consortium (2005), an electroni...
5


2.3.2.1 Scanning of invoices
The most basic method of electronic invoicing is scanning. The invoice is issued by the
s...
6

in control of how the invoices are stored and the security surrounding the invoices.


The web site could be in the sup...
7

the sale is fulfilled an invoice is used to request payment (CEN/ISSS e-Invoicing Focus
Group, 2005).



2.3.2.6 Direct...
8

 Less manual work process - enhanced efficiency and reduced human error risk
 Possibility for electronic storage
 Possi...
9

Approval of payment                                          0,5
Archiving the invoice (in numerical order)            ...
10

The copy and the despatch note are placed into a 0,5
folder in receipt order
The original invoice is approved
Approval...
11

Finvoice. Having many standards on the market is not a problem as the service providers
transform the electronic invoi...
12




   Figure 2.1 Elma for RosettaNet (Elma Electronic Trading, 2006)




2.4.5                EbXML (Electronic Busine...
13

Finland for electronic invoicing solutions by ASP operators.



2.5    Electronic invoicing in Finland

2.5.1 Introduc...
14

agreed upon a common standard so that electronic invoices could be sent and received in a
secure manner in a common tr...
15

The eInvoicing model is based on EDI (Electronic Data Interchange). EDI includes the
electronic transfer, from compute...
16

invoices that suits them best.     Elma’s products support, among others, the following
formats: PDF, TIFF, eInvoiceXM...
17

through fixed connections. Currently, the Elma eInvoice supports the following distribution
channels: Finland Post Ltd...
18


2.6     Laws and regulations
According to Directive 2001/115/EC, all Member States must accept documents or
messages ...
19

copies of all invoices whether received or issued are to be stored. The authenticity of the
origin, the integrity of t...
20


3 Theories and prior research

3.1 Introduction
The vast availability of new information technology, as well as the n...
21

influence on technology adoption. The TAM has mainly been used to predict adoption of
new technology by individuals bu...
22

individuals’ use of computers can be predicted based on their intentions. (Riemenschneider
and McKinney, 1999, Grandon...
23

and the availability of internal slack resources. The environmental context entails the
environment in which the firm ...
24

In addition to these motivations, many other factors have been introduced and validated or
discarded. I have decided t...
25

oriented culture the level of computerization tends to be higher. This type of culture
emphasizes people, team, detail...
26

in relation to its size and its history with similar technologies. Larger firms are more likely
to adopt new technolog...
27

there might be a lack of infrastructure, suitable platforms and compatible technological
standards. In addition, natio...
28

factors determining attitudes towards paperless accounting. In addition, she found
experience, institution conformity ...
29


4 Research model and Methodology

4.1 Introduction
As attitudes towards electronic invoicing and its adoption in Finl...
30

accounting practices which I excluded since my study is about electronic invoicing.




        Personal factors      ...
31

Hypothesis 2:
Age and previous work-experience influence perceptions of electronic invoicing.


Organizational factors...
32



Environmental factors
Outside pressure such as opinions and actions of supplier and customers are studied in this
se...
33

Hypothesis 11
Electronic invoicing is perceived as technically safe.


Hypothesis 12
Electronic invoicing is perceived...
34

Attitudes and intention to use
The attitudes of the respondents are examined here to see whether the intention to use ...
35

the electronic invoicing status and preferences were raised as well as queries into what kind
of ERP system is in use,...
36

analyses (Nyberg 1999) and is close to the response rate (26 percent) that Gullkvist (2005)
reached in her study of th...
37

amount being zero and the highest 100. The corresponding figure for export was sixteen
percent on average and a low of...
38

invoicing will be used by everyone in Finland within 10 years and internationally within 15
years.


Hypothesis 6: Mos...
39


                      Options                              Frequency       Percent



                      No answer...
40

                                           Frequency      Percent


                                  1        10     ...
41

                                                   Frequency       Percent


                                No answer...
42

Two respondents chose not to answer the question about whether there were any financial
restrictions in the company to...
43

                                                     Frequency       Percent
                  No answer              ...
44

industry and the other industries regarding e-invoicing implementation but none were
discovered. Therefore, it was con...
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
Attitudes Towards Electronic Invoicing In Finland
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Attitudes Towards Electronic Invoicing In Finland

  1. 1. Electronic Invoicing in Finland - attitudes towards electronic invoicing by financial managers in small- to mid-sized companies Anna Rofhök-Björni Master’s of Science Thesis in Accounting Swedish School of Economics and Business Administration 2006
  2. 2. II 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 Abstract: 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
  3. 3. III 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
  4. 4. IV 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
  5. 5. V 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 Acknowledgements 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!!
  6. 6. 1 1 Introduction 1.1 Background 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 invoicing. 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.
  7. 7. 2 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 considered. 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 implications.
  8. 8. 3 2 Electronic Invoicing in Finland 2.1 Introduction 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. • Taxbase • Amount of VAT to be paid (Verohallinto, 2005)
  9. 9. 4 2.3 Electronic invoicing 2.3.1 Definitions 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).
  10. 10. 5 2.3.2.1 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). 2.3.2.2 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). 2.3.2.3 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
  11. 11. 6 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). 2.3.2.4 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, 2005). 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) 2.3.2.5 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
  12. 12. 7 the sale is fulfilled an invoice is used to request payment (CEN/ISSS e-Invoicing Focus Group, 2005). 2.3.2.6 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: Fast invoicing Lowering of costs of material Better customer service and cost-savings for customers
  13. 13. 8 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 Easier filing 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 electronic invoicing. Company A Paper Electronic (based on Internet and EDI in Effective Accounting Invoice by Salmi-Vahtera): 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 order 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
  14. 14. 9 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 % Paper Electronic 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
  15. 15. 10 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 Trading, 2006) 2.4 Techniques and standards 2.4.1 Introduction 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
  16. 16. 11 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). 2.4.4 RosettaNet 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.
  17. 17. 12 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. 2.4.6 Biztalk 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
  18. 18. 13 Finland for electronic invoicing solutions by ASP operators. 2.5 Electronic invoicing in Finland 2.5.1 Introduction 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. 2.5.2.1 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
  19. 19. 14 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)
  20. 20. 15 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 involved: • 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). 2.5.2.2 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
  21. 21. 16 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
  22. 22. 17 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). 2.5.2.3 Finvoice 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).
  23. 23. 18 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 accomplished through: - 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 invoices issued. - 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 Member State. According to the e-Invoicing Focus Group (2005), the Directive furthermore states that
  24. 24. 19 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 Trading, 2006). 2.7 Summary 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.
  25. 25. 20 3 Theories and prior research 3.1 Introduction 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 3.2.1 Introduction 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
  26. 26. 21 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. Perceived usefuln ss e Attitude Behav ioural Actual External variables Toward intentio to use n systemu se using Perceived 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 Planned Behavior 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
  27. 27. 22 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). Belief an s d Evaluation Attitude toward Behav iour Behav ioural Actual Intention Behaviour Subjective Norm 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
  28. 28. 23 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 towards adoption 3.3.1 Introduction 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))
  29. 29. 24 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 previous research. 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-
  30. 30. 25 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
  31. 31. 26 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
  32. 32. 27 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
  33. 33. 28 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). 3.4 Summary 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.
  34. 34. 29 4 Research model and Methodology 4.1 Introduction 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 be tested. 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
  35. 35. 30 accounting practices which I excluded since my study is about electronic invoicing. Personal factors Perceived usefulness Organisational factors Attitude Towards usage Intention to use Technical factors Perceived ease of use Economical factors Environmental factors Figure 4.1 Research model Personal factors 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). Hypothesis 1: Previous experience of electronic invoicing or similar techniques affects perception of electronic invoicing.
  36. 36. 31 Hypothesis 2: Age and previous work-experience influence perceptions of electronic invoicing. Organizational factors 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. Hypothesis 3 Having qualified IT personnel in the company affects perceptions of electronic invoicing. Hypothesis 4 If there is a perception that management would support adoption, financial managers are more positive towards electronic invoicing. Hypothesis 5 If there is a perception that changes in processes will be big, managers are less likely to want to use electronic invoicing Hypothesis 6 Most firms have not implemented electronic invoicing but will within 5 years Hypothesis 7 Adoption depends on the business activities of the firm
  37. 37. 32 Environmental factors 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. Hypothesis 8 Pressure from suppliers and/or customers can determine intention to use electronic invoicing Hypothesis 9 The larger the market share the less important electronic invoicing will be. Technological factors 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. Hypothesis 10 If other technology adoption has been made recently, the company is more likely to have a positive attitude towards electronic invoicing.
  38. 38. 33 Hypothesis 11 Electronic invoicing is perceived as technically safe. Hypothesis 12 Electronic invoicing is perceived as easy to learn Economical factors 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. Hypothesis 13 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. Hypothesis 14: If electronic invoicing is perceived as useful, the attitude towards electronic invoicing is positive. Hypothesis 15: If electronic invoicing is perceived as easy to use, the attitude towards using it is positive. Hypothesis 16: If electronic invoicing is perceived as useful, the intention to use is positive. Hypothesis 17: If electronic invoicing is perceived as easy to use, the intention to use is positive.
  39. 39. 34 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. Hypothesis 18: 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 was sent. 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
  40. 40. 35 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
  41. 41. 36 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 surprising. 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
  42. 42. 37 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 various industries. 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 4.4.1 Introduction 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
  43. 43. 38 invoicing will be used by everyone in Finland within 10 years and internationally within 15 years. Hypothesis 6: Most firms have not implemented electronic invoicing but will within 5 years. Option Frequency Percent Are using 3 7,0 5 11,6 Will not employ 14 32,6 Planning to employ within one year 13 30,2 Planning to employ within 3 years 8 18,6 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.
  44. 44. 39 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 43 100,0 Total 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). Frequency Percent 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.
  45. 45. 40 Frequency Percent 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 Frequency Percent 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.
  46. 46. 41 Frequency Percent 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. 20 15 10 Count 5 0 1 3 4 5 Figure 4.2 Technically safe Frequency Percent 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
  47. 47. 42 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 found: “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 important. Hypothesis 13: Economical reasons are often cited as reasons for not implementing. Frequency Percent 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.
  48. 48. 43 Frequency Percent 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
  49. 49. 44 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 invoicing. 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 Where 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)

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