The global move toward digital platforms has significantly impacted financial operations, including invoicing. e-Invoicing (electronic invoicing) is steadily becoming the standard for B2B and B2C transactions across various jurisdictions. Explore what this digital revolution means for global business and how it is transforming financial landscapes.
What is e-Invoicing?
e-Invoicing is the electronic exchange of the invoice document between a supplier and a buyer. The practice replaces traditional, paper-based invoicing, making the process more efficient, cost-effective, and environmentally friendly. With various countries mandating e-Invoicing for tax reporting, digital invoicing ensures that you remain compliant.
Global Adoption and Standards
Different countries have different requirements for e-Invoicing, making it crucial for multinationals to understand and adapt to these unique regulatory landscapes.
RTC Suite e-Invoicing Solutions:
How does e-Invoice work?
There are significant differences between traditional invoicing and e-invoicing. The main differences are the processes and life-cycle of the invoice. Regular invoicing includes paper-based invoices. These invoices are printed out and delivered to the customer on a manual basis. The customer also enters the data of the invoice to the accounting system manually. However, these manual processes are eliminated with the e-invoicing. E-invoicing relies on structured data that devices can interpret and handle, enabling end-to-end automation throughout the entire invoicing process, starting from generation and to storage. In order to implement e-invoicing, an e-invoicing system which is capable of catching the necessary data from the ERP or other systems, converting this data into the necessary structured formats, and sending it to the designated destination is required. Depending on the technical and legal requirements, there are several options in this regard. This destination could be a direct receiver, the local tax authority, or an exchange network.
Benefits of e-Invoicing
There are multiple benefits of e-invoicing for businesses and authorities. It enables to save costs due to the diminishing of paper usage, saves time for processing the invoice from sending to issuing, improves accuracy, reduces errors, delays and manual interactions. Authorities benefit from e-invoicing in terms of the transparency, accuracy, and reduction the VAT gaps.
Legal Requirements of the e-Invoicing
There are several requirements for e-invoicing. These requirements may differentiate from country to country. However, there are also couple of standard format requirements such as; PEPPOL, XML, UBL, PDF and so on.
What is PEPPOL e-Invoicing?
Pan-European Public Procurement Online, also known as PEPPOL, is an invoice exchange network which has certain standards and requirements for exchanging electronic documents. Peppol network has been used in several European countries in addition to Japan, Singapore, Australia and New Zealand and so on.
Besides, Peppol has its own standards and requirements for electronic data and document exchange. It uses a model called the “four-corner model”. The four corners are: the sender, the sender’s service provider, the buyer’s service provider and the buyer. The electronic data shall be exchanged via these providers, or called Peppol Access Points.
Talk to Our Experts
Book a one-on-one session with our experienced team for personalized guidance on shaping your Tax Technology platform strategy.