![]() For example, let’s consider Making Tax Digital (MTD) requires businesses to keep digital records and archives for six years. ![]() There needs to be clear, end-to-end visibility of invoicing so that processes can be reviewed and enhanced.įor these reasons alone e-invoicing is quickly becoming the norm in many European countries.īenefits aside, there are legal requirements now in place for digital interactions designed to improve accuracy and reduce fraud opportunities. The audit trail has become a non-negotiable, mandatory building block of any electronic process.As more and more businesses digitize their processes and regulatory bodies introduce new compliance requirements, having a system in place to capture digital records of transactions and deliver and receive them in an appropriate fashion is crucial.It removes the complexity associated with traditional invoice processing, distilling it down to just sending, converting, and receiving invoices in the desired format.While those statements are overly simplistic and only superficially touch on the benefits of automation, they make is clear why e-invoicing is now one of the fastest growing methods of invoicing. Likewise, the faster the process, the faster the payment. These include (but are not limited to):įor complete control, some businesses will set up separate guidelines to govern what standard protocol will be used to send or receive the e-Invoices across the enterprise.įirst and foremost, no invoice means no payment. No need to change a thing.Īlso, because the e-Invoices are in a standardized electronic format, they are easily transmitted using any method already agreed upon by the sender and the recipient. By having a system convert the e-invoice, both you and your customer automatically adhere to your respective standards for compliance and auditing. They will then transfer it to both your system as well as their own. Upon receipt, the customer's e-invoicing system will automatically analyze and convert the information into their preferred file type. You've already confirmed that the two systems can work seamlessly together so you know that the invoice will be received on the other end. Let's assume that your organization has an invoice for your customer (although the system works in both directions).įirst, you generate an invoice from your Enterprise Resource Planning (ERP) system and send it to the customer. Just like every automation process, there is a system order and series of steps to ensure efficiency. Naturally this is known as PDF invoice processing. That doesn't mean that a PDF invoice can't be digitally processed, it just involves an additional step where they are converted into a standard digital format. Unfortunately, this means that most PDF invoices don't count as they are considered unstructured. Because these formats use structure data (such as markers and tags to separate different elements), invoice processing tools can automatically validate and prepare them for posting and payment. "Real" e-invoices use something called "structured invoice data" and are issued using Electronic Data Interchange (EDI) or XML formats. However, although all invoices can be sent and received electronically in some form not all of these are considered "real" e-invoices. By eliminating most if not all of the manual tasking throughout the process and consequently, e-Invoicing also eliminates the susceptibility to human error as well.Īlso, because the information can be viewed across systems both wherever and whenever, it becomes far easier for the accounts payable team to collaborate on invoices, manage cash flows, escalate payments (or not), optimize their working day, and even reduce or eliminate the possibility of error and fraud. It reduces data entry errors, shortens processing times, and results in far less paper. Compared to traditional invoicing, e-invoicing is much more reliable, scalable, and sustainable. No more waiting for the mail or fax machine, e-invoicing lets you both receive and submit payments. Somebody needs to physically receive the documents, save the information, hopefully catch any fraud or errors, and maintain a physical container space for storage.Įlectronic invoicing (e-invoicing) takes all these same processes and activities and conducts them digitally over an electronic interchange. The traditional company invoice workflow is a series of manually intensive, heavily paper-based tasks including entering invoice data, creating invoices, manual checks and balances, plus endless amounts of filing.
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