E-Invoicing - a new global standard
E-Invoicing has rapidly become the norm in many of the world’s major countries, from Asia to Africa and the Americas with most countries in the European Union mandating E-Invoicing for either B2G or B2B supplies.
The number of countries who have only mandated B2G transactions via E-Invoicing will likely add the same requirements for the B2B sector in the next few years.
Whilst the move to E-Invoicing is motivated by the global digitization of tax, estimates show that there is a 50-80% reduction in costs when invoice processing is electronic. This is why current research shows that the global E-Invoicing market currently worth $8.74 billion is expected to reach $29.68 billion by 2027. It’s not just about financial viability however, Italy – home to one of the most advanced E-Invoicing systems in the world – has proved that E-Invoicing not only reduces tax evasion but drives higher levels of efficiency, providing a better customer service experience.
In the UK, the policies behind E-Invoicing are similar to the principals being established by the European directives.
The use of E-Invoices for B2B transactions is currently optional in the UK, with suppliers needing their customer’s agreement and acceptance to receive-E-Invoices. With B2G invoicing, the UK requires government departments to receive E-Invoices from their suppliers using PEPPOL as the acceptable standard. The exception to this voluntary E-Invoicing mandate, however, is the NHS, who made an announcement last November of their intent to reach net zero by 2045. They successfully moved their processes in entirety to E-Invoicing early in 2022. All invoices are now required to be submitted to the NHS Shared Business Services (NHS SBS) electronically via the NHS’s Tradeshift E-Invoicing platform. The platform uses Electronic Data Integration (EDI) functionality that enables suppliers to integrate with their existing ERP or invoicing systems. They list advantages for the move as cost reducing, faster processing and daily progress updates.
With the world moving towards mandating E-Invoicing, it’s important to invest in solutions that will ensure seamless automation of your B2B processes, especially if you are still carrying out manual invoice processing.
With governments leading the way and most organizations striving to become fast and agile in their trading processes, we are at the juncture where not implementing an effective E-Invoicing solution could be detrimental to your longevity.
So where do you start?
If you are new to the idea of E-Invoicing, it’s important to understand the difference between the digitization of a paper invoice versus an E-Invoice. Making a PDF copy of a paper invoice for submission is not the same as E-Invoicing. Digital images, PDF and other visual digital forms of invoices still require manual viewing and capturing into the buyer’s Finance or Enterprise Resource Planning system.
Electronic invoicing is the exchange of an electronic invoice document between a supplier and a buyer where the invoice (E-Invoice) is issued, transmitted, and received in a structured data format that allows for its automatic and electronic processing.
For an E-invoice, the visual format is secondary to the objective of automation, where viewing the invoice in a human-readable version is not considered part of the invoice itself.
E-Invoices are not:
The automation of your processes across the entire invoice lifecycle from the time an invoice is issued to its eventual archiving.
If you are wondering how you can go about installing the best B2B invoicing software for your business, it’s important to reach out to an organization that specializes in this application. Implementing a new E-Invoicing system, which includes specific standards and registering documents for government platforms, is not a simple task, especially if your company operates globally with many foreign suppliers.
Coliance are experts at establishing the functionalities and integrations that you need, carefully aligning them with your budget and ensuring scalability. With years of experience managing our client’s supply chain needs, we are well equipped to outline the best options for introducing E-Invoicing in your organisation.
Adopting Electronic invoicing can streamline your workflow, increase productivity, improve your customers experience and save you money. Coliance via its Agora Managed Service provides ways to handle E-Invoicing and other electronic documentation via EDI or Application Programming Interfaces (APIs). We can assist you without disruption to reduce your costs per invoice, minimize errors and free up your resources and time. Most of all, we will ensure you are prepared for what appears to be a future mandated requirement.