E-invoicing integrates several technologies that send transaction data to vendors and customers through an Electronic Data Interchange (EDI) system. Statistics suggest electronic invoices may save businesses between 60-80% compared to paper-based processes. Digital billing also enables real-time reporting and facilitates contract and tax compliance.

Governments around the world are rapidly adopting electronic invoicing regulations.

Here we discuss how electronic billing regulations will impact private organisations and public administrations across the globe.

The digital economy has created opportunities for global businesses looking to expand to new world markets. Organisations must be efficient to meet customer demands and remain competitive.

Electronic billing is becoming a critical driver for business efficiency. E-invoice systems can capture data and automate transactions.  Automating processes reduces errors and saves time spent on redundant administrative tasks.

Paper-based systems rely on manual data entry, which is susceptible to errors. Mistakes may force accounting clerks to spend time re-entering data. Accounts receivable may send invoices to the wrong address, resulting in delays that can incur interest and payment penalties.

E-invoicing can increase cash flow for businesses by reducing the resources wasted on correcting mistakes. An electronic invoice platform is also more efficient at monitoring and managing invoices and may prevent fraudulent transactions. It improves data collection and analysis, helping businesses find new growth opportunities in emerging markets.

The benefits of e-invoicing go beyond companies looking to enhance accounting efficiencies. State agencies are leveraging electronic billing technologies to optimise tax collection and ensure compliance.

Several countries have already implemented regulations that compel organisations to provide electronic invoices through their ERP systems. The primary goals of electronic invoice regulations are to reduce procurement costs and to facilitate real-time tax reporting. Additionally, e-invoicing provides governments and tax authorities with more up-to-date data on how their economies are performing.

The challenge for public administrators is how to automate electronic invoice formats. Organisations will also need to integrate and manage ERP invoice processes seamlessly to improve clearance. Different jurisdictions have developed varying e-billing formats and rules.

Many countries in the European Union (EU) have started adopting e-invoicing for tax compliance. Some countries like Italy and Germany require businesses to use electronic invoicing when transacting with the government. France recently changed its stance on e-invoicing after years of opposing the EU's mandates.

Other jurisdictions implementing electronic billing regulations are Greece, Saudi Arabia, and China. Countries like Indonesia, Croatia, and the Philippines, require e-invoices to be sent to the government for all transactions.

The United Kingdom has not yet implemented regulations on e-invoicing, although when e-invoices are used there are some compliance requirements by tax authorities like ensuring a human-readable format is available, and that they must be retained for six years. There is no business-to-government (B2G) requirement to do so, but many departments are able to receive e-invoices. An exception is National Health Service (NHS) purchases, where this became mandatory on March 31, 2022.

However, many organisations in the UK are migrating away from paper invoices in favour of e-invoices. E-invoices in the UK can be in any format, and it’s important to note that the UK government supports the Peppol standard. UK businesses looking to do business with other EU countries should be aware of the regulatory requirements for business-to-business (B2B) and B2G invoicing, including the acceptable formats in those countries. Their invoicing solution should include the capability to send e-invoices in multiple formats to facilitate global trade.

As more jurisdictions and government authorities issue mandates for electronic billing processes, businesses are under pressure to comply with the rules. The challenge for companies is to ensure e-invoicing standards and data transparency. However, organisations are already using electronic invoicing even in jurisdictions where it is not mandatory as the benefits have compelled them to consider e-invoicing platforms as an investment that presents new opportunities. In the digital economy, many companies now realise access to real-time data is an asset to their long-term survival. Contact Quadient today to get more information about e-invoicing and how it can help your business.