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Is your business compliant with e-invoicing regulations?
Electronic invoicing (e-invoicing) can increase efficiency and productivity while reducing costs.
In the public and private sector alike, the benefitsof e-invoicing are compelling but a lack of standardisation can be a barrier to companies adopting this time and cost-saving approach to issuing invoices.
Across the globe, steps have been taken to try and ease the way for businesses. Not surprisingly, many regions began by mandating e-invoicing to companies that do business (or wish to do business) with government departments. This is a huge area in itself. The European Commission estimates that e-invoicing in public procurement across the EU could generate savings of up to €2.3 billion.
What begins in public procurement can pave the way for wider adoption of e-invoicing. Standardisation helps to reassure businesses that the first steps they take towards digital invoicing will be the right ones for future expansion and possibly cross-border trading.
E-invoicing can reduce costs, increase efficiency and productivity and cut time to payment
We are likely to see the expansion of such initiatives that help businesses benefit from e-invoicing. Companies that get on board can hope to see improvements compared to paper-based, manual invoicing processes. These include:
Increased efficiency – e-invoices are created and sent digitally, eliminating multiple occurrences of manual data re-entry, which is not only time-consuming but also error-prone. When electronic signatures are added to documents they can also be approved without the need to print
Increased productivity – e-invoices can be more readily tracked and notifications can confirm that documents have been sent (and where to) and when they’ve been opened. This reduces the need for follow-ups while digital file storage makes document retrieval much simpler
Getting paid faster – time saved in the invoice process means invoices go out quicker. What’s more, when digital invoicing links into other business applications, such as quoting, it is much easier for invoices to be created as soon as work has been delivered. Not having to wait for a monthly billing cycle means that payments can come back into the business sooner
Reduced costs – time saved equates to costs saved and not only that but removing the cost of postage is an immediate reduction in the cost of doing business. The average saving that comes from switching from paper to e-invoices has been put at €6.60 on the issuer side and €11.20 on the buyer side.
With the right digital invoice solution, businesses can create personalised documents electronically and automatically send them according to each customer’s preference for how they wish to be contacted.
A web-based portal that takes care of invoice preparation and distribution saves time, meaning that invoices get issued more quickly and businesses can get paid faster. Not all invoices have to be sent electronically either; customers can choose if they wish to receive them by physical post or email and these preferences are recorded so that every communication reaches them in the right way.
The e-invoicing directives to know about
To this end, guidelines and directives across the EU and in Nordic countries give companies some direction when it comes to e-invoicing standards:
European Union – Directive 2014/55/EU aims to facilitate and encourage the use of e-invoices for public procurement contracts. The directive aims to address incompatible invoicing systems in the EU, standardising e-invoicing so that businesses in different EU member states can issue and settle invoices with ease
France – from the start of this year, large companies have been mandated to submit e-invoices for work/services provided to central, regional and local authorities. Smaller sized companies will need to follow suit by 2020
The Nordic countries – Denmark’s national e-invoicing platform has been in place for many years. The system is similar to guidelines set by Pan-European Public Procurement Online (PEPPOL). In Norway, PEPPOL specifications are also adhered to for mandated business to government (B2G) e-invoicing, while in Sweden (where e-invoicing is mandated for central government authorities), a long-term goal is for PEPPOL to facilitate cross-border electronic trade
A full run-down of member states’ laws can be viewed here.