E-invoicing isn’t a new concept; it has been around for 30 years, first using systems like Electronic Data Interchange (EDI) and XML formats.
Recently, the push to adopt e-invoicing has largely been driven by government actions. Europe, in particular, is leading the charge in e-invoicing. The region has introduced several laws aimed at encouraging the use of e-invoices throughout the European Union.
As of April 2020, all EU countries are required to follow the European Union’s eInvoicing Directive. This means they must include this directive in their national laws and adhere to specific standards set by the EU for e-invoicing.
Key guidelines for ensuring security and protecting privacy in e-invoicing.
Using an electronic invoicing presentation and payment platform can enhance the security of sending invoices. Instead of sending the actual invoice through an unsecured email, this method sends a notification via email. Users must then log into the platform to view and manage the invoice data.
This approach avoids several common risks associated with emailing invoices directly:
- The invoice might be sent to the wrong person or could be returned due to a typo in the email address.
- There’s a risk that the invoice could be intercepted or that someone could redirect the payment.
- It helps prevent spear phishing attacks, where attackers use fake payment requests to steal money.
The platform can also incorporate strong security features like two-factor authentication and rule-based access controls. These ensure that only authorized users can access and handle the invoice information.
Upcoming trends in e-invoicing and their potential effects on the future of billing and payment processes.
Here are four forecasts about the future of business electronic invoicing and why it’s smart to start using e-invoicing now.
Wider adoption
In the US, companies generally have more freedom to decide their invoicing standards, but many other countries are starting to require businesses to use e-invoices.
This trend is accelerating, and companies that don’t adapt might soon find themselves behind the curve.
One key reason e-invoicing is becoming essential is that it helps automate processes that used to be done manually, which is a major benefit for customers.
Compliance and transparency as key motivators
High-profile cases of tax evasion and fraud have prompted companies to seek solutions that improve transparency.
Governments aiming to improve tax collection view standardized invoicing as a solution to the problem of unpaid taxes.
Auditors also find it easier to review companies that use standardized financial systems, which simplifies business processes.
A resource for gathering data and making decisions
E-invoices help collect and organize data into useful points for company leaders.
By analyzing a company’s invoice data, trends can be spotted that highlight inefficiencies or bottlenecks.
Additionally, management can make well-informed decisions based on real-time data that shows how the company is performing and what to expect in the future.
Mobile Friendly is the Future
The tech world is moving towards mobile devices. In fact, mobile users generated
more than half of all web traffic globally last year.
Businesses can greatly benefit from setting up systems that provide smooth mobile payment
processing and interfaces that are easy to use on smaller screens.
Getting Started with E-Invoicing
Below are the general steps to set up e-invoicing features in an accounts payable system. The specific process for creating e-invoices might differ based on the software you select.
Getting Started with E-Invoicing
- Inform Suppliers and Vendors
Begin by letting your business partners know you are moving to e-invoicing. Make sure they are okay with receiving invoices this way, and double-check their contact details to ensure they match what’s in your invoicing software.
- Set Up E-Invoicing
Choose an e-invoice format that includes all the essential information. At a minimum, your invoices should have:
- Transaction details
- Buyer and seller identities
- Accepted payment methods
- Any applicable taxes and discounts
- Generate E-Invoices
Switching to e-invoicing cuts down on manual tasks and data entry, making the whole accounts payable process much more efficient. Research by the Hackett Group found that automating invoice processing can reduce the need for manual intervention by 30%.
- Delivery
Send out your invoices using the method you’ve agreed on with your recipients, whether it’s email or a secure online portal.
By following these steps and choosing the right e-invoicing software, you can significantly streamline your accounts payable operations.
How to Choose an E-Invoicing Solution?
Choosing the right e-invoicing solution is crucial. You need a system that solves your accounts payable team’s challenges and can scale with your company.
What to Look For?
- Compatibility with Your Existing Software
Ensure the e-invoicing system works well with software you already use or plan to use, like ERP systems that can issue e-invoices straight from sales orders.
- Meets Your Document Management Needs
Choose a system that aligns with your document storage needs and meets auditing standards. It should also be able to:
- Calculate local taxes and offer discounts for bulk or early payments.
- Support digital signatures if necessary.
- Handle multiple languages and currencies, mainly if you deal internationally.
For more detailed advice on picking the best e-invoicing software, check out our recommended blog post on this topic.
Conclusion
The evolution and increasing adoption of e-invoicing mark a pivotal transformation in financial and business operations globally.
With mandates and encouragement from governments, especially within the EU, and a clear movement toward digitization driven by both compliance needs and operational efficiency, e-invoicing is set to become a standard practice across industries.
Companies embracing this technology are not only poised to benefit from reduced costs and improved accuracy but will also enjoy enhanced security and data management capabilities.
As the world leans more towards mobile and digital solutions, staying ahead in e-invoicing adoption is crucial for maintaining competitive advantage and ensuring seamless, future-ready business operations.
Whether it’s streamlining processes, enhancing transparency, or meeting regulatory demands, the transition to e-invoicing is a strategic step toward a more efficient and accountable financial ecosystem.