There are few businesses today that can operate without the benefit of a global supply chain. So being able to conduct business across borders and process financial transactions accurately and efficiently is paramount to commercial success. This includes the process of invoicing, which can be time-consuming without automation. But how can automation be assured when different accounting systems are used by different organisations in different regions?  Enter Universal Business Language or UBL. 

UBL invoicing is a method of invoicing clients employing a standard XML format designed specifically for electronic business documents.   Managed by the non-profit Organisation for the Advancement of Structured Information Standards (OASIS), it’s a royalty-free format and used globally, especially in the UK, EU, and many other regions around the world. Some of the things businesses most commonly use it for include invoicing, purchase orders, and packing slips, among others.  Think of UBL as a kind of Rosetta Stone for business document formats. 

The reason so many enterprises have adopted UBL as a standard for invoicing, is that doing so offers a host of benefits. According to recent studies, it’s extremely efficient due to the time it saves from manually processing invoices, reducing labour costs, and its accuracy. 

Its benefits in improving business processes include: 

Cost-effectiveness

UBL invoicing is much faster than other payment methods from end to end by reducing administrative costs associated with invoice processing. And since the XML format is royalty-free and can be used by anyone, it’s one of the most cost-effective invoicing methods that exists. Additionally, it makes it much easier for small businesses and start-ups to eliminate the need for costly custom software while still enabling them to work with larger trading partners employing UBL invoicing. 

Extensive support

UBL is recognised globally, making it easy to process transactions from various regions, and ensuring that invoices conform to a universal standard.  

100% accuracy

 3.6% of manually typed invoices have mistakes that lead to late payments. Unlike the manual invoicing process, UBL invoicing isn’t prone to human errors, and the format is recognised and processed automatically with the receiving system you have in place. Since it requires no human intervention whatsoever, there are no inaccuracies. 

No more costly Electronic Data Interchange (EDI) software

Arguably one of the biggest advantages of UBL invoice solutions is they effectively eliminate the need for proprietary EDI software. Historically, EDI software has been one of the costliest systems for sharing electronic business data. 

Eliminates booking deadlines

Since UBL invoicing data is sent directly from one system to another, there’s no more need for booking deadlines. 

Improves cash flow

Typically, UBL invoices are paid an average of 16 days faster than manual invoices. This helps enterprises improve cash flow and makes accounts payable management much easier. 

Compliance with regional procurement

Several EU member state governments and agencies have adopted UBL for international invoice processing and other document exchanges. 

UBL invoices follow a standard framework that includes the core components of an invoice, reusable data components, and supplementary document types. 

Core Components

The core components include the expected items you would find on an invoice such as the invoice date, due date, buyer and seller information, item description, and costs. 

Reusable data components

In addition to the individual components that are unique to a supplier or purchase, reusable components include items like currencies, measurement units, and tax rates.  

Supplementary document types 

UBL also supports other processes such as transportation documents, eTendering, purchase orders, credit notes, vendor-managed inventory solutions, utility billing, and more.  The versatility of UBL allows businesses to create consistency for business transaction documentation. 

To streamline implementation, it’s beneficial to be familiar with the technical aspects of UBL invoicing to ensure you’re following industry standards and best practices.  

The XML format and structure

UBL invoices are typically created and exchanged in XML (eXtensible Markup Language) format. XML provides a structured way to represent data, ensuring that the information within an invoice is easily parsable and can be automatically processed by software systems.

PDF documents and formats 

With UBL invoicing, or for any other processes, you’ll be sent a PDF document in addition to the UBL file read automatically by your system. This enables customers and business owners, or vendors, to be able to access the invoice detail via a reader-friendly PDF format. 

UBL accounting software packages 

Since UBL is quickly becoming the standard, many leading accounting software packages employ it to ensure compatibility with invoice data. Additionally, many employing UBL have the option of automating the reading of any type of document, even if it’s not in the standard UBL format. This means businesses can still work with companies not currently using UBL. 

Payment mandates 

UBL invoicing can include payment mandates, specifying the preferred payment method, and details for a transaction. This feature streamlines the payment process, reduces errors, and provides clarity to both the payer and payee.

Adoption of e-invoicing is accelerating due to the adoption of e-invoices for B2G (business to government) procurement, driven by EU mandates and the desire of member states to increase procurement efficiency, reduce cost, and improve environmental impact.  

The European Union Directive on Electronic Invoicing (2014/55/EU) 

This is a directive mandate implemented by the EU in 2014 that requires all European public administrations to have the capability of receiving and processing B2G invoices in electronic formats from all their suppliers. UBL aligns with the EU directives. However, it’s important to note that each Member State of the EU has the right to adopt and implement the particular directive within its own existing legal framework. 

Several member states are using or accepting e-invoices that align with UBL, including France, Portugal, & The Netherlands.  UK companies seeking to do business with EU member states governments will need to comply with their specific e-invoicing mandates.  

International standardisation efforts

UBL is starting to gain acceptance outside of the EU and efforts are underway to develop international standards.  As further acceptance is gained, the investments made in UBL invoicing procedures today will provide long-term benefits for global businesses.  

As you can see from the points touched on above, the main takeaway is that UBL invoicing drastically simplifies the invoicing process, and provides standardisation that makes global financial transaction processing more cost-effective.  It also provides an avenue for crucial business information to flow freely with 100% accuracy and no human intervention to disrupt or lengthen the process.  For organisations doing business across the EU (and other international regions, adopting UBL is a crucial requirement.