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E-invoicing: An overview

May 29, 2024 · 8 minute read

“Opening up the books” takes on a whole new meaning with the introduction of e-invoicing. While paper invoicing has been on the decline for decades, the increased impetus on corporations to provide more data, more transparency, and more cooperation with governments around the world has led to e-invoicing taking center stage as the next revolution in indirect tax accounting, auditing, and reporting. Selecting the right e-invoicing solution in an ever-changing, complex world is likely to be on the agenda in the coming months and years for many MNCs, but finding a comprehensive, integrated, compliance solution will reap major benefits in the short and long term.

What is e-invoicing?

E-invoicing , or electronic invoicing, is the process of generating, sending, receiving, and storing invoices in a digital format.

E-invoicing differs from digital invoicing in a couple of ways. Where digital invoicing refers to invoices that can be sent electronically, in a format such as a PDF, e-invoicing refers to digital invoicing that contains structured data. E-invoicing creates invoices in an XML data file format where more descriptive information is coded into the invoice, including direct and indirect tax data, to comply with domestic and international government standards for financial reporting. It also allows companies to send and receive invoices electronically, process invoices faster and with fewer errors, and allow for a more accurate and expedited audit and reporting process.

E-invoicing solutions will typically speak to business systems, such as procurement and inventory management, to create a single source of data that mitigates the need for additional resources in reporting and analysis. Businesses that exchange e-invoices will find a lot more automation in data input, shortening the payment cycle as less time will be required to verify the invoice information.

Corporations will also be able to meet government standards for on-demand, real-time reporting through the creation of single e-invoice marketplaces and secure data portals.

The evolution of B2B payments

In B2B sales, there are several common types of invoices including:

• Sales invoice
• Proforma invoice
• Commercial invoice
• Timesheet invoice
• Recurring invoice

Once computers became a mainstay of business operations, the possibilities of improved invoicing expanded. Envelopes and stamps turned into email attachments, and accounts receivable and accounts payable departments decreased the number of employees required as accounting and bookkeeping software developed the ability to generate and process multiple invoices and payments faster. The use of digital signatures, encryption, and other security measures improved the number of ways invoices could be sent, and the number of payment options expanded.

Governments were paying attention to the development of B2B invoicing and payments as the digital age began and saw an opportunity to tighten up auditing and reporting for improved capture of direct and indirect taxes.

• 1960s – Electronic Data Interchange (EDI) was developed allowing companies to exchange structured data electronically.
• 1980s – Large corporations began adopting EDI in their business operations; however, the cost and complex integrations were prohibitive to all but the largest MNCs.
• 1990s/2000s – The rise of the internet and web-based technology, including eXtensible Markup Language (XML), offered more flexibility for information exchange and standardized data.
• 2010s – Governments began to recognize the benefits of e-invoicing invoicing and began implementing frameworks to capture the benefits from a compliance standpoint.
• 2020s – Global cooperation on implementing standardized invoicing mandates and regulating indirect taxes are made possible by the advancement of e-invoicing through new software, such as ONESOURCE .

Benefits of e-invoicing

As with most things that have been impacted by the digital age speed, efficiency, and accuracy have improved with the introduction of e-invoicing. Where paper, and even digital invoicing, remains a very labor-intensive process plagued with errors and the need for complex processes and systems, e-invoicing is set to revolutionize the way companies do business. E-invoices are easier to track, store, and audit for increased efficiency and improved accuracy. Streamlined processing and payments reduce the amount of time between invoice and settlement which leads to better supplier relationships.

The costs associated with printing and mailing paper invoices are eliminated, as is the need for multiple tools with advanced accounting software that provides a single source of truth. There is a reduction in the amount of time spent auditing and preparing financial reports and reporting is more secure and transparent.

The timing for e-invoicing couldn’t be better for governments and MNCs as governments and governing bodies around the globe look to crack down on tax evasion and address the way corporations are sheltering and obscuring their revenue and profits through complex cross-border accounting.

Perhaps the greatest benefit of e-invoicing is that it addresses the increasing compliance required globally, such as continuous transaction controls (CTC) that require mandatory real-time invoice reporting. While the ever-changing landscape continues to present numerous challenges for keeping compliant with continual updates and new compliance standards at state, domestic, and international levels, the ability to provide real-time reporting with tools, such as the Thomson Reuters/Pagero ONESOURCE solution , reduces complex indirect tax calculations and automatically scans for and includes the updates calculations within the program itself.

In the U.S. the Business Payments Coalition reported a  25% adoption by U.S. companies of e-invoicing . The introduction of a single platform for sharing e-invoicing data,  PEPPOL , is already in effect to support the growth of e-invoicing, cooperation, and transparency.

In the E.U. the European Committee for Standardization published the standard on European e-invoicing with the  European Commission  publishing fact sheets on each country’s requirements as a supporting function in the European Commission’s new proposal on  Value Added Tax  (VAT) reporting.

Other countries implementing standards include Brazil, Mexico, Chile, Australia, Singapore, and India.

Challenges of e-invoicing

Adopting e-invoicing requires a sound plan for implementation and deployment . As with the introduction of any new platform, compatibility will be a primary challenge for the immediate future as structures and compliance frameworks are introduced and companies adopt e-invoicing at different rates.

While automation will take over for e-invoicing, there will remain the need for manual entry of data for invoices that are not machine-readable. Consequently, there may be resistance to workflow changes and processes, both internally and externally, with customers and suppliers. And though the invoices will offer improved data security and encryption, invoices sent via email may be subject to spam filters from email service providers and company firewalls.

The future of e-invoicing

With so much tax revenue for governments and the potential for non-compliance fines and penalties on the line, the future of e-invoicing is strong. Over the next few years, the expectations are for:

• Wider adoption of e-invoicing as more governments implement mandatory reporting systems and standards.
• MNCs will be required to improve on real-time, accurate, and transparent reporting by adopting e-invoicing practices.
• The increased level and detail of data available will offer a greater scale and scope of information for decision-makers.
• The European Union is leading the way in creating a single market for e-invoicing, making it easier for businesses in different countries to conduct transactions.
• E-invoicing will become more attractive as part of ESG  initiatives .
• The global e-invoice market will continue to expand, making it an attractive investment opportunity.
• Artificial intelligence may also elevate the user experience and automation of traditionally labor-intensive, manual processes.

Choosing the right solution

With the expanding e-invoicing market, there are many options to choose from, and finding the right one can prove to be tricky. Thomson Reuters and Pagero have partnered to create a “best-in-class” solution that combines the power of e-invoicing efficiency with automated updates to compliance standards built directly into the system’s calculations. Capable of calculating the tax on all sales and purchases from 250 countries and territories, with compliant e-invoicing/CTCs for over 70 countries, ONESOURCE is a robust platform capable of comprehensive compliance in an integrated solution. The cloud infrastructure is fast and secure with a scalable model able to connect to any government or business network. In an effort to help businesses reduce costs , improve efficiency, reduce errors, support their ESG initiatives, and meet the demands of government for more real-time data in less time, ONESOURCE is helping one e-invoice at a time.

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Electronic Invoicing: The Ultimate Guide

E-invoicing streamlines the invoice to cash process, reduces collections costs, and enhances overall accounts receivable efficiency.

• Keep reading ⇩
• See our e-invoicing solution

The Executive’s Guide to Electronic Invoicing

Understand what an e-invoice is and how transitioning from traditional paper-based invoicing to e-invoicing can help your business. This guide explores: → The problems with manual invoicing → The fundamentals and benefits of e-invoicing → How to evaluate e-invoicing solutions → And more

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What is electronic invoicing ?

Accounts receivable (AR) has a propensity for favoring paper-based manual processes, including invoicing and billing. And unfortunately, when these types of seemingly simple activities aren’t prioritized for digitization, complicated, costly, and time-consuming consequences often ensue.

Fortunately, with commerce having transformed dramatically of late, manually-driven billing and remittance processes might be nearing their end. This means the ambiguities involved in getting paid which stem from traditional invoicing processes might soon become past memories, too.

The solution to manual invoicing woes is none other than electronic invoicing (e-invoicing) .

Electronic invoicing is the process of creating, sending, receiving, processing, and recording invoices electronically using a software application. E-invoicing software is typically integrated with enterprise resource planning (ERP) systems.

E-invoices are digital documents that are exchanged between sellers and buyers, and are fiscal and legal substitutes for traditional paper invoices. They’re produced by software with little or no human data input or involvement, and as the name suggests, are delivered electronically. They’re then received and routed—again, by software—before being reviewed for payment by a human being.

Let’s quickly address a few commonly asked questions about electronic invoicing:

Question 1:  What’s the difference between an electronic invoice and a physical invoice?

Physical—or paper-based—invoices are created using stand-alone software programs. These may be as rudimentary as Microsoft Word or Excel but are more likely to be a business, financial, or accounting solution. Once the physical invoice is created, it’s manually printed, sorted, and processed with other invoices to be mailed to the customer.

Many accounts receivable staff members may be involved with creating, processing, and mailing manual invoices. This can be a multi-day process. This creates work on your customer’s end too, as accounts payable (AP) teams need to manually open, process, and pay these invoices.

In contrast, an e-invoice can be created, sent, received, and processed in mere minutes. With some of the more sophisticated e-invoicing software options out there, you can store invoices in a cloud-based portal that both you and your customers can access— but much more on this later!

Electronic invoicing can also pave the way for automating the cash application process too. E-invoicing software that’s integrated with your ERP sets you up to apply payments automatically.

Question 2:  Are paper-based invoices more subject to mistakes than e-invoices?

Since they’re being created by human beings who are using manual processes that are more prone to error, paper-based invoices are decidedly subject to greater error. Also, the information captured in a paper invoice must be manually scanned or entered by the recipient, causing further errors. Since human error is the most significant cause of invoice disputes, eliminating those instances should be a priority.

Question 3:  Are electronic invoices processed differently than paper-based invoices?

Yes, the two types of invoices are processed differently, by both AP and AR teams.

Paper invoices are composed and mailed by human beings, and must be retrieved and processed by human customers, who then input their data into an accounts payable system for payment. Conversely, e-invoices can be received and processed by a customer’s AP software, or the customer may log into an online payment portal to review the electronic invoice.

When receiving payment—digitally or by check—your accounts receivable staff will need to process and match it with its corresponding invoice. This process is not only labor-intensive, but it also often results in delayed payments. Late payments can have downstream effects on your business like stalled cash flow and higher days sales outstanding (DSO) .

Regardless, the electronic invoicing process is much faster—and less error-prone—than a paper-based invoicing process.

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The 16 (and counting) problems with manual invoicing

Not yet sold on e-invoicing? Maybe understanding why paper-based invoicing is bad for business might change your mind.

Businesses using traditional invoicing processes are confronted with a wide assortment of problems and issues. Those issues are only becoming more profound as their competitors implement electronic invoicing solutions, putting laggards at a glaring disadvantage.

Here’s a comprehensive—yet not exhaustive—list of issues that come from manual invoicing approaches, and the impacts they have on the organization:

While issues abound with paper-based invoicing—as the above table gets at—there are yet more challenges with this invoicing method, ranging from slow payment processing to high costs. So, if your company has yet to embrace e-invoicing, it’s time to rethink how you bill. Much of the problems you’re likely experiencing can be prevented by modernizing your processes and leveraging electronic invoicing.

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How does electronic invoicing work.

There’s no one-size-fits-all approach to e-invoicing. Instead, you can think of electronic invoicing as having tiers or levels . For instance, manually emailing PDF-versions of an invoice could be considered the most basic level of e-invoicing. You then might advance to posting digitally created invoices in a customer-facing, cloud-based online payment portal or to your customer’s AP system.

Generally, however, here’s how electronic invoicing works (in three steps):

Generate e-invoices and send them

Receive e-invoices and pay them

Reconcile and record payments, and store e-invoices

Step 1. You generate e-invoices in your ERP and send them to your customers

Most businesses will create electronic invoices in their ERP and post them automatically to their accounts receivable automation platform. AR teams can then send those e-invoices instantly—via email, for instance—or post them directly to an accounts receivable payment portal, where customers can access them in real-time, whenever they please. With some automation platforms, electronic invoices can even be posted directly to a customer’s account payable portal.

Step 2. Your customers receive their e-invoices and pay them

Your customer receives the e-invoice through their personalized invoice delivery channel where they can easily review its details to compare it with the purchase order or other records. They can also download or print the electronic invoice if needed.

When invoicing electronically, it’s also easier to attach supporting documentation, making it easy for both customers and your AR teams to reference the information they need in one place. And with e-invoices, customers are often encouraged to initiate electronic payments directly on an electronic invoice received in the mail, via their preferred payment method, be it credit or debit card, ACH or EFT, virtual credit cards, or bank transfer.

Payment details are included directly in the electronic invoice to simplify the process. Customers can more easily make short payments against electronic invoices, too, and some payment portals—that host electronic invoices—allow customers to comment directly on line items to address discrepancies or surface disputes.

Step 3. You reconcile and record payments, and store e-invoices

After you receive notification that payment has been made, you’ll be able to easily reconcile it with the electronic invoice. Payments made directly on e-invoices, through cloud-based payment portals—like some accounts receivable automation platforms offer—are automatically matched to the invoice, eliminating the need for manual reconciliation.

Integrations between e-invoicing and accounting systems ensure payments are then automatically posted back to your ERP system, enabling real-time insight into cash flow. All e-invoices and payments are stored in digital databases or cloud storage for easy access and retrieval, simplifying auditing and financial reporting.

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5 ways you can use automated invoicing to accelerate cash flow.

Unlike traditional paper-based invoicing, e-invoicing is economical, efficient, accelerates payments, and delivers exceptional customer experiences. But how can businesses—and more specifically, their accounts receivable teams— actually use automated invoicing? In what ways can online invoicing make an immediate and tangible impact on your accounts receivable collections processes?

Great questions! There are many things you can do—and deliver—with a well-honed, automated invoicing process, that you can’t do using a manual, disorganized, underdeveloped one. Specifically—yet not exhaustively—you can use automated invoicing to:

Say goodbye to paper-driven processes

Streamline routine invoicing tasks

Deliver personalized, branded invoices

Customize your invoice delivery strategy

Accept online payments

1. Use automated invoicing to say goodbye to paper-driven processes

You can reduce resource use—including labor, paper, printing ink, and shipping costs—through e-invoicing. This invoicing approach also allows you to streamline the invoicing process by empowering you to easily fix errors digitally instead of having to reprint and re-mail invoices.

Going paperless has some serious financial benefits, too. Since implementing Versapay, Boston Properties accounts receivable department has become 100% paperless, slashing their paper mailing costs to $0.00 across their entire portfolio of tenants.

2. Use automated invoicing to streamline routine invoicing tasks

E-invoicing solutions allow you to automate routine invoicing tasks, which will save staff time by reducing the need to print and mail invoices, and by enabling automated scanning, matching, and validating of invoice data. 

Much of your pertinent invoicing data exists in your ERP already, so it's easily retrievable. With automation software, you can leverage invoices made in your ERP and push them through to customers automatically. Other typical, rote, routine invoicing tasks—like following up on  delinquent accounts —are also good starting points for modernization, which automation can make substantially more efficient.

3. Use automated invoicing to deliver personalized, branded invoices

E-invoices can be easily personalized, which improves your customers’ experience by creating seamless, branded accounts receivable communications. Modern AR automation tools allow you to customize design and layout, business unit and geography, or any other aspects of your e-invoices.

In this instance, using automated invoicing functionality allows you to present your business as professional, sets you apart from the competition, and enables you to give each customer exactly the information they need most.

4. Use automated invoicing to customize your invoice delivery strategy

Invoice delivery is a less-thought-of component of the invoice to cash process. Yet it’s a major roadblock for companies using manual invoicing processes; not to mention customers have preferences for how to receive invoices, with many desiring digital delivery these days.

So, make your customers happy by personalizing invoice delivery and sending e-invoices via the channels they prefer.

Automated invoicing reduces accounts receivable staff’s workload both by reducing manual work in sending invoices and by encouraging customers to pay digitally. It also gives you the ability to customize invoice delivery to suit larger clients. For example, using an e-invoice delivery system that can automatically push invoices to a client’s AP portal can help you retain the business of major clients you don’t want to lose.

Broadly speaking, when it comes to invoice delivery methods, you can use automated invoicing to turn your AR department into a customer experience giant. That’s because e-invoices:

Remove errors borne from manual processes

Remove roadblocks to growth

Boost cash flow

Offer clients real-time visibility

Delight customers.

5. Use automated invoicing to accept online payments

Automated invoicing empowers you to incorporate digital payment acceptance as part of your B2B customer invoicing process. This will help you improve customer experience, as many customers now find it most convenient to pay digitally, and using methods they’re increasingly accustomed to as consumers.

You can also accelerate cash collection on outstanding e-invoices by streamlining payment acceptance and accepting a wider variety of B2B payment methods .

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The benefits of electronic invoicing.

At the risk of sounding like a broken record, manual billing and invoicing processes are tedious, time-consuming, error prone, and expensive. So while embracing electronic invoicing solutions may seem daunting, the productivity and the strategic benefits far outweigh any perceived difficulties.

Just look at these pros and cons lists:

E-invoicing tools offer innumerable benefits over traditional paper-based invoicing practices. In fact, by automating your invoicing process—from invoice generation to payment acceptance—here are six benefits you could achieve:

E-invoicing benefit #1: Greater accuracy

Electronic invoicing systems eliminate human error by integrating billing with your ERP system or accounting software.

E-invoicing benefit #2: Greater visibility

Automatic e-invoice tracking enables more efficient follow-up and improves cash flow forecasting. Gain real-time visibility into payment details and trends, past-due and delinquent accounts , and individual e-invoice and customer data so you can make more informed decisions.

E-invoicing benefit #3: Faster payments

Electronic invoices make it easier for customers to pay you with a single click. With that aforementioned ERP integration, your accounts receivable team can capture and apply payments automatically, and instantly post them back to your ERP.

E-invoicing benefit #4: Better customer experiences

The convenience and professionalism of e-invoicing solutions give your customers a choice of invoice delivery and payment options, including the ability to make auto-payments using stored payment methods. Receiving personalized invoices and documentation (and having that payment flexibility) through a collaborative accounts receivable solution , for instance, gives your customers more confidence in the collections process.

E-invoicing benefit #5: Lower costs

Automated invoicing reduces costs while freeing up your AR team to work on more productive activities, such as analyzing customer payment trends and developing strategies to improve collections. E-invoicing software also eliminates costs associated with printing, mailing, waiting for checks, and getting them to the bank. Electronic invoicing systems can scale as your needs change and some e-invoicing tools can even automate the creation and delivery of paper invoices (if you still have a need for them or aren’t ready to fully automate your processes).

E-invoicing benefit #6: Less environmental impact

As mentioned earlier, e-invoicing uses less energy than manual billing processes, making it an earth-friendly choice .

How e-invoicing saves you time and gets you paid faster:

Here’s an even more exhaustive list of the benefits of electronic invoicing:

The benefits of e-invoicing for sellers

Electronic invoicing solutions benefit both sellers—you and your accounts receivable team—and buyers—your customers. For sellers, the primary appeal to e-invoices is that they eliminate paper and improve productivity. For instance, one of Versapay’s e-invoicing software customers gained 50 hours monthly that are now reallocated to high-impact work.

Sellers typically send invoices through the mail. The process of entering data, printing invoices, stuffing envelopes, and waiting for payment is simply inefficient.

E-invoicing smoothes the process of getting invoices to your customers—and the process of them paying you faster through expedited approvals and one-click payments. And with a collaborative accounts receivable solution—one that hosts e-invoices and supporting documentation in the cloud where it’s accessible 24/7—customers gain easy access to all the documents they need, significantly reducing late payments and disputes over incorrect invoice amounts. Sellers love this.

The benefits of e-invoicing for customers

As for customers, they like electronic invoicing systems for their convenience, accuracy, and professionalism. Electronic invoicing means customers can receive invoices in the manner that best suits their needs, such as through a portal, in an email, or via electronic data interchange.

E-invoicing solutions providers that offer payment portals are particularly appealing (for customers, despite them not technically having much say in your software purchasing decisions) because they give buyers easy access to e-invoices and supporting documents. When e-invoices enter their accounts payable system more quickly—and all pertinent information is up to date and readily available—customers enjoy a simplified payment experience and are more likely to pay faster, leaving you with fewer outstanding invoices and more predictable cash flow.

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The Path to Better Invoice Processing

The best online invoicing tip: use an accounts receivable payment portal to deliver e-invoices.

Poor invoicing effectively impedes cash flow, as inefficient processes, invoice errors, poor communication, and invoice disputes stall—or outright halt—your collections efforts.

Invoicing electronically is a surefire strategy for accelerating cash flow, reducing manual labor, and delighting customers. And while e-invoicing may look different for different businesses, the best tactic is to e-invoice using an accounts receivable payment portal —an increasingly popular and necessary tool.

These portals streamline the invoicing process and make it easier for you to get paid. (And, considering businesses process an average of nearly 2,500 invoices monthly, invoicing efficiencies alone could be costing you a frightening amount of money, making payment portals all the more worthwhile.) 

When it comes to e-invoicing through an accounts receivable payment portal, there are three primary reasons why this solution is unmatched:

All invoicing-associated wait-times are eliminated

Errors that plague conventional invoicing processes are removed

Team time-savings are delivered en masse

1. All invoicing-associated wait-times are eliminated

When invoicing electronically through an accounts receivable payment portal—versus traditional billing and payment processes—you can get paid exponentially faster.

Not only can your customers make payments inside the portal using their preferred payment methods, but payment disputes can be handled and resolved in-app , directly on the electronic invoice.

And, seeing as over a quarter of accounts receivable teams spend more than half their day resolving invoice disputes, having that burden removed is highly valuable as it frees them to prioritize more strategic collections activities.

2. Errors that plague conventional invoicing processes are removed

Here’s a list of the most common manual errors plaguing conventional invoicing processes:

Keystroking or calculation errors

Misaddressing or misrouting invoices

Misfiling or losing invoices and supporting documentation

Failing to include due dates

Incomplete itemization

Incorrect current use or conversion

Improper—or non-existent—follow up

These invoicing complications slow things down as you work to identify and correct any errors— which ironically is also a manual task .

Online invoicing—done through an accounts receivable payment portal—reduces the risk of errors occurring or, even worse, recurring. Keystroking or routing errors, for instance, can be eliminated, payment due dates are automatically inserted into e-invoices, and reminders can be automated .

3. Team time-savings are delivered en masse

Manually processing invoices takes up a lot of time. Not only does your accounts receivable team get bored with its repetitive tasks, but this process also drives up your labor costs.

Same goes for your customers. They don’t want to be spending their accounts payable team’s time manually entering the same data for each invoice or sitting on the phone disputing a charge. 

Using an accounts receivable payment portal saves everyone valuable time, which translates into saving money. How much money, you ask?  By our calculations , accounts receivable teams with collaborative payment portals are absolved from having to manually resolve over $1.6 million worth of invoices monthly. By boosting the efficiency and effectiveness of e-invoicing and collection activities, payment portals can deliver substantial time- and cost-savings.

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How to start e-invoicing: Convert your paper invoices to e-invoices

If you’re ready to transition from paper-based invoicing to electronic invoicing, here are five steps you can consider taking to smooth that change:

Step 1.  Make a plan

Clearly articulate and outline your objectives for switching to an electronic invoicing process (as well as your desired timeline). Research omni-channel invoicing software options and have your staff demo various products to identify the best choice. Assign team members responsibilities for implementation and identify the metrics you’ll use to measure how your efficiencies, costs, and customer satisfaction have benefited from e-invoicing.

Step 2.  Organize your customer records

Get your customers’ email addresses to start delivering e-invoices, as to ensure that your business has those records or a plan for collecting them. Load your customer data into the new accounts receivable system (or ensure the e-invoicing software you choose can seamlessly integrate with your ERP, where your customer records might already exist). Digitize and upload any paper documents that you need in the system for outstanding invoices. You’ll also want to work with customers to make sure that communications coming from your new system will be whitelisted so your invoices don’t get lost in customers’ spam filters.

Step 3.  Train your team

Ensure that your AR team gets proper training on how to use the new system. As you’re evaluating electronic invoicing solutions, a great question to ask is what kind of training the solution vendor can provide your team with. Make sure everyone involved in your company’s AR operations knows about the new e-invoicing solution and its full capabilities.

Step 4.  Communicate with customers

Communicate with your customers in advance of making the switch to online invoicing. They should be aware of the changes coming, the benefits the new process will bring them, and any adjustments they may need to make on their end. Make some of your staff available to answer customer questions before and immediately after the implementation of the new system. Versapay’s customer, TireHub , engaged their customers from the outset, and presented their e-invoicing solution not as an imposition, but as an initiative that customers could care about and come alongside for the ride.

Step 5.  Choose your roll-out method and monitor things closely post-launch

Invite customers to receive their e-invoices through the system in phases or all at once (the choice is yours). Provide your staff with a detailed timeline of this plan so they know what they’ll need to do and when. Meet with staff frequently during the first weeks of the e-invoicing solution roll-out to help answer any questions or troubleshoot problems.

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How to evaluate electronic invoicing solutions.

Below is a checklist covering many of the points you should consider when assessing a new e-invoicing software platform. But before setting up a single demo, it’s vital to clearly define how that platform will fit into your business by following a focused evaluation plan.

One key step is to connect with team members whose work would be directly affected by implementing a new e-invoicing tool. By understanding how they do their jobs and the challenges they deal with, you’ll know how e-invoicing fits into your operations, and what features and benefits you should look for.

Assemble a task force of stakeholders and internal experts to participate throughout the process. Begin researching e-invoicing software by working with your task force. Have them help define current challenges and future goals, including the KPIs you’ll use to judge success. Also discuss change management matters; for example: How will implementation affect operations and staff?

Use the evaluation checklist and other criteria to short-list the best types of automated online invoicing products. Define post-implementation success and use that to assess the contending providers, not just the e-invoicing software. Who will give you help with driving adoption? What kind of long-term support can you expect? What’s the product roadmap?

Get demos. Once you’re down to a shortlist, see the software in action. Don’t shy away from asking tough questions about how the product can satisfy your specific demands. If an e-invoicing solution provider can’t give you good answers, or insists on a generic demo, there’s a good chance they’re not the right one for you.

Get stakeholder buy-in and make a final decision. Collate your vendor analyses and checklist results and discuss them with stakeholders. Once you’ve all aligned on finalist(s), ask for proposals, review them, and arrive at a final decision.

These are the core features most AR teams will look for from an e-invoicing software. Consider prioritizing these in your evaluation:

Most electronic invoicing solutions are in fact pieces of larger accounts receivable automation software. And, to fully unlock your AR potential for accelerating cash flow, you’ll want more than just e-invoicing; you’ll want to: modernize your infrastructure, optimize a greater number of existing business processes, focus on delivering exceptional customer experiences, and free your AR staff to prioritize more impactful and strategic work.

Looking to transform your invoicing processes with an electronic invoicing solution? Book a free demo with one of our experts to see how Versapay can help.

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E-invoicing: a complete guide

Embracing digital transformation

Digital transformation is reshaping every aspect of business. Companies worldwide are navigating the transition from traditional to digital processes, seeking efficiency, accuracy, and sustainability. Among the many digital practices being adopted by finance departments, e-invoicing is becoming pivotal to modern business practices.   

This comprehensive e-invoicing guide dives into what it is, the benefits and challenges, the global landscape, and how businesses can seamlessly implement electronic invoicing in their digital operations.

Understanding electronic invoicing

What is e-invoicing and how does it work? 

Electronic invoicing, or e-invoicing, refers to the sending and receiving of invoices in a standardized electronic format, allowing direct processing by the recipient's ERP system without manual intervention. This automation speeds up transactions and minimizes errors that occur in manual processes.  

What is an e-invoice? 

According to the EU’s e-invoicing directive (2014/55/EU) , an 'electronic invoice' is an invoice issued, transmitted, and received in a structured electronic format, such as XML or other structured data formats, which ERP systems can automatically process.  

Despite the name, the term 'e-invoice' is not limited to invoices – it also applies to credit notes and other documents. When asked to send an electronic invoice, sending a traditional invoice as a PDF via email is not sufficient. Below, we'll break down the differences between conventional invoices and e-invoices.   

The difference between traditional invoices and e-invoices 

Traditional invoices .

Traditional invoices require manual data entry, handling, and storage. These manual processes are prone to errors and inefficiencies. Traditional invoices have three integrated characteristics:  

• Contain detailed data such as amounts, descriptions, and quantities  
• Render data in a visual format on printed paper for manual reading  
• Possess a physical form for manual handling and exchange  

Digital invoices, such as PDFs and digital images, are more efficient as they remove the aspect of physical handling. However, they still require manual viewing and data entry.  

Electronic invoices 

E-invoices eliminate the need for physical handling, reducing storage and processing inefficiencies. To qualify as an e-invoice, the document needs to be:   

• Created with the correct structure  
• Transferred from the seller’s system to the buyer’s system  

Electronic invoices don't primarily include a visual presentation of data, though they can be rendered visually for checks or transposed into visual formats. The aim is system-to-system communication, with the visual format being secondary. E-invoices are not:  

• Unstructured invoice data in PDF or Word formats  
• Images of invoices such as JPG or TIFF files  
• Unstructured HTML invoices found on web pages or in emails  
• OCR (scanned paper invoices) that still require manual data extraction  
• Paper invoices transmitted digitally, such as via fax machines  

Traditional vs. electronic invoice

B2B and B2G e-invoicing  

Electronic invoicing is versatile, allowing various types of transactions, including Business-to-Business (B2B) and Business-to-Government (B2G). Each type presents unique requirements and benefits:  

B2B electronic invoicing B2B e-invoicing streamlines the exchange of invoices between companies, enhancing efficiency and reducing errors. Adopting this invoicing method in B2B relationships often leads to improved payment times and stronger supplier-buyer relationships.

B2G electronic invoicing B2G e-invoicing involves transactions between businesses and government entities. Many governments worldwide are mandating this secure invoicing method for public procurement to enhance transparency, efficiency, and compliance. This requires businesses that deal with government contracts to adopt e-invoicing solutions compliant with specific government standards.

Common e-invoicing formats and standards  

In electronic invoicing, many formats and standards exist, each designed to facilitate seamless and standardized electronic data exchange between businesses. Understanding these formats ensures compatibility and compliance across different systems and regions.  

UBL: Developed by OASIS, UBL (Universal Business Language) is one of the most widely adopted standards, designed to provide a generic XML-based framework that can be applied across various business transactions, including invoicing.  

EDIFACT: EDIFACT (Electronic Data Interchange for Administration, Commerce, and Transport) is an international standard that defines a set of syntax rules for structuring data, widely used for cross-border transactions.  

ANSI X12: ANSI X12 is a set of standards that define how documents should be structured and formatted for electronic exchange, covering a wide range of industries and transactions.  

Peppol: Peppol (Pan-European Public Procurement Online) is a standard and a network that facilitates e-procurement and e-invoicing across Europe and beyond. It allows governments and businesses to exchange electronic documents over its network, using a standardized format.  

What are the most common formats for different regions?

E-Invoice (Estonia) 

EDIFACT or UN/EDIFACT (Europe and Asia)

FacturaE (Spain) 

Factur-X (France)

FatturaPA (Italy)

Finvoice, TEAPPSXML (Finland)

ISDOC (Czech Republic) 

PEPPOL (EU, Australia, New Zealand, Singapore, Canada, USA) 

NemHandel/OIOUBL (Denmark) 

Svefaktura (Sweden) 

Tradacoms (UK) 

UBL-OHNL (The Netherlands) 

XRechnung (Germany) 

Solutions like Continia Document Capture and Continia Document Output allow you to exchange invoices seamlessly via the Peppol eDelivery Network. These solutions also ensure easy e-invoicing across multiple formats, allowing businesses to send and receive invoices regardless of the preferred format.  

The global landscape of e-invoicing

Electronic invoicing around the world.

Invoicing requirements vary significantly across different countries and regions, influenced by efforts to improve efficiency, transparency, and tax compliance. Businesses must stay informed about the e-invoicing regulations in their respective regions and industries. Compliance is not just about adhering to mandates, but also leveraging the advantages this invoicing method offers in terms of efficiency, accuracy, and cost savings. 

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Middle east, north america, the benefits and challenges of e-invoicing, the benefits of electronic invoicing.

E-invoicing is a smart move for any business looking to streamline operations and cut costs. By switching to electronic invoices, companies can enjoy a range of benefits that impact everything from day-to-day efficiency to long-term sustainability goals. Let's dive into the key advantages that this method of invoicing offers, from operational efficiency to enhanced security.

Operational efficiency

Improved compliance, enhanced security, lower environmental impact, increased accuracy, cost reduction.

Overcoming e-invoicing challenges 

Integration with existing systems .

Integrating electronic invoicing systems with existing accounting and ERP software can be complex, leading to compatibility issues. Selecting flexible e-invoicing solutions that offer robust integration capabilities is crucial. Opt for software solutions, such as those offered by Continia, that support a wide range of standards and provide customizable options to ensure seamless integration with your existing infrastructure. 

Adapting to regulatory changes 

Staying informed on evolving regulations and ensuring compliance can be demanding. Leverage electronic invoicing platforms that are designed to comply with international standards and are regularly updated to reflect the latest regulatory changes. This approach ensures compliance and reduces the administrative burden associated with manual updates. 

Navigating cost implications 

Initial setup costs and ongoing expenses can be a concern, particularly for small and medium-sized enterprises (SMEs). Consider e-invoicing solutions that offer scalable pricing models, allowing you to start small and expand as your needs grow. Focusing on long-term savings and efficiency gains can also help justify the initial investment. 

Preparing for the future of invoicing 

The role of e-invoicing in digital transformation  .

The shift towards e-invoicing is integral to the broader digital transformation affecting businesses worldwide. With its numerous benefits, this method of invoicing streamlines financial operations and contributes to a more sustainable and compliant business practice.  

Electronic invoicing stands at the forefront of the digital transformation in financial operations, offering a path to increased efficiency, compliance, and insight into business transactions. With the backing of regulations such as the EU's e-invoicing directive, adoption is set to accelerate, making it an essential strategy for businesses aiming to thrive in the digital age.  

Streamlined e-invoice exchange for better financial operations

Electronic invoicing is a strategic imperative for businesses aiming for efficiency, compliance, and sustainability in their financial transactions. The transition to e-invoicing represents a significant step forward in embracing digital processes, offering tangible benefits such as operational efficiencies, cost reductions, and enhanced accuracy in financial operations.  

While challenging, the journey towards fully integrating e-invoicing into your business operations is made smoother with the right partners and solutions. Microsoft Dynamics 365 Business Central users can benefit from solutions like Continia Document Capture and Continia Document Output, which ensure seamless invoice exchange via the Peppol eDelivery Network and compatibility with various global e-invoicing formats.     

Want to know more? 

Get our white paper outlining even more details about how to elevate your business with e-invoicing

Frequently asked questions

E-invoicing, or electronic invoicing, streamlines the billing process by allowing businesses to send and receive invoices electronically, directly from one financial system to another. This approach eliminates the need for paper-based invoices, reducing errors, cutting costs, and speeding up the payment cycle. By adopting electronic invoicing, companies enhance efficiency, improve cash flow, and strengthen compliance with regulatory requirements.  

Electronic invoicing automates the invoice exchange process, allowing businesses to send and receive structured digital invoices directly through their financial systems. This automation reduces manual intervention, streamlines transactions, and expedites payments, significantly improving business efficiency and financial liquidity.  

An electronic invoice is the digital counterpart of a paper invoice, featuring essential transaction details formatted for automatic processing by financial systems. This facilitates a more efficient, accurate, and eco-friendly approach to managing transactions, enhancing business operations, and supporting environmental sustainability.  

To create an e-invoice, select a compatible electronic invoicing platform that seamlessly integrates with your existing accounting software. Input transaction details such as service dates, amounts, and descriptions into the platform. The e-invoicing system then formats this information into a structured, digital format ready for electronic processing. This streamlined approach not only optimizes your invoicing process but also guarantees precision and accelerates the receivables cycle.  

Electronic invoicing mandates vary globally, with some countries requiring it for tax compliance and anti-fraud measures. Check with your local tax authority to understand if e-invoicing applies to your business. Compliance ensures legal conformity and operational continuity, positioning your business for success in a digitally evolving marketplace.  

Peppol e-invoicing facilitates secure, standardized electronic document exchange across Europe and globally. It enables businesses and governments to exchange e-invoices and other documents over its secure network, ensuring interoperability and compliance with international standards. Adopting Peppol electronic invoicing allows companies to expand their market reach, streamline operations, and engage in cross-border transactions with greater ease and reliability.  

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E-invoicing: definition, benefits & how to create them.

Electronic invoicing is the new solution compared to paper invoices. Yet, there can be a lot to know and understand when it comes to electronic invoices. Is there an electronic exchange? Can you use automated invoicing ? What about invoice creation? There are several business systems that allow you to send invoices electronically.

But it can be important to consider many areas. For example, time savings, lower costs, and e-invoicing standards for small businesses. You want everything to be in a structured format and an electronic format so you can get faster payment. But what do you do with all your invoice data to reduce the time it takes for manual processing? 

The good news is we created this guide to break down everything you need to know for an e-invoicing solution. Read on to learn about how it works, the benefits and challenges, and more!

Table of Contents

What Is E-invoicing?

How does e-invoicing work, benefits of e-invoicing, challenges of e-invoicing, how to create e-invoices, key takeaways.

Frequently Asked Questions

Every day, merchants and buyers exchange millions of invoices. Yet before, sending and processing invoices included labor-intensive and error-prone manual methods. An option gets offered by electronic billing. By automating the management of bills, businesses can speed up this essential activity. 

With e-invoicing, suppliers may create and deliver invoices to clients automatically. This happens in a structured digital format. And clients can process and pay those bills electronically. Shorter payment periods, improved efficiency, and a decrease in errors are all advantages.

An e-invoice is one that gets sent electronically from a supplier to a client. It contains billing information displayed in a structured fashion. E-invoicing has many benefits for both sellers and their clients. Instead of manually making and printing invoices , e-invoices get generated from sales transactions.

Companies can automate labor-intensive processing stages. This can include the three-way matching of invoices to purchase orders and shipments. They can do this when their suppliers send them electronic invoices. 

If you’re looking for easy-to-use and intuitive e-invoicing software , FreshBooks has everything. You can get all your billing in order and simplify all your processes. You can create professional-looking invoices and accept credit cards to get paid faster.

When e-invoicing gets included in accounting, businesses profit most from it. Companies can automate the stages involved in processing invoices thanks to this connectivity. Let’s assume that a business routinely bills clients after sending their orders. 

Using data from customer orders, ERP systems send an invoice without extra data entry. Customers that receive invoices can easily import them into their own software. This is because they are in a digital format. 

The processing of the invoice then gets automated by the client’s business software. This includes the process of comparing the data to the original purchase order. It also includes comparing it to the delivered products. If everything ends up matching, the customer is then required to pay the amount that’s on the invoice. 

But within all this, there are going to be a few different kinds of e-invoices that you can send. For example, some of the most common include: 

• Sales invoices. The most typical kind of invoice is a sales invoice . When a company provides customers with goods or services, it creates sales invoices to collect payment. There is some standard information on an invoice. It contains the name and contact details of the supplier and the client and the invoice number . It will also include the good or service given, the amount owed, the payment due date, and the payment methods.
• Pro forma invoices . This sort of invoice gets used by sellers to give a quote prior to providing any goods or services. It includes the projected price, a description of the job, and any other details. The buyer might need these to decide whether to proceed with placing an order.
• Credit memos. When a company has to offer a discount or a refund, it sends a credit memo, sometimes referred to as a credit invoice . If a product got harmed in transit or to fix an earlier billing error, a credit invoice might get generated.
• Past-due invoices. This invoice gets delivered to a client who hasn’t paid a sales invoice by the deadline. It might also include any late fees mentioned in the sales agreement. It must contain all the information from the original sales invoice. It then gets delivered to the client after the due date.
• Commercial invoices are essential documents in international trade. Therefore, it is important for business owners to learn how to create commercial invoices , as they ensure that all transactions are documented accurately and comply with international shipping regulations. These invoices are primarily used to calculate tariffs and duties and to obtain customs clearance. Depending on the country, it might contain information about the quantity and weight. Or, it could contain information on the volume of the items, their description, and their price.
• Timesheet invoices. Timesheet invoices are frequently sent by companies who bill for their services on an hourly or daily basis. The number of hours worked and the hourly rate charged are both listed on a timesheet invoice. Legal professionals, consultants, and psychologists are among those who use timesheet invoices. Streamline your invoice by following our guide on how to write an invoice for hours worked . This will help you present a clear and concise invoice to your clients.
• Debit memos. A debit memo informs the company that the customer’s balance needs to gets raised. For instance, if the initial amount for a project was an estimate and it required more time and resources, the business can issue a debit invoice.
• Mixed invoices. Credit and debit costs get combined into one invoice in this type of invoice . What the consumer owes gets shown in the net amount.
• Recurring invoices. These get used by companies that offer ongoing or repeating services. These get sent out every month or at other regular intervals. Businesses that offer streaming services, cloud-based software, or gym memberships are examples.
• Final invoices. This is delivered after a sizable job gets finished. It specifies the amount due after any interim payments have got deducted from the overall project cost.

E-invoicing offers a variety of company advantages. These include cheaper expenses, fewer mistakes, and increased cash flow . These advantages come from making it possible to automate accounting and payment procedures. 

Some of the biggest benefits of e-invoicing include: 

• An increase in productivity. Because ERP systems deliver e-invoices automatically, employees don’t have to spend time entering data. Employees can now devote more time to higher-level tasks as a result of this.
• Fewer mistakes and errors. Since transaction data is automatically copied to e-invoices, data entry errors are not possible. Additionally, this lessens the possibility of aggravating and time-consuming payment disputes. 
• A reduction in cost. Lower human labor expenses and improved accuracy result in savings for both suppliers and customers.
• Potential supplier discounts. Many suppliers offer rewards for prompt payment and levy fines for late payments. Customers may find it simpler to pay fast and take advantage of early-payment discounts thanks to e-invoicing.
• A smaller impact on the environment. E-invoicing lessens the environmental impact of the invoicing process by doing away with paper, ink, and envelopes.

FreshBooks has invoicing software that provides each one of these benefits, and then some. It can make your life a whole lot easier and allow you to stay on top of all your invoicing and tracking needs.

Even though there are some substantial benefits to e-invoicing, there are still some challenges that it can bring. It might depend on the type of business you operate or the industry you’re in. But either way, these challenges are worth understanding beforehand to help you stay on top of them. 

Some of the biggest challenges to e-invoicing include: 

• Customer resistance. It’s possible that not all clients can fully benefit from e-invoicing. Some people might not even get used to getting invoices through email. Customers must grant their permission in several nations before suppliers can e-invoice them.
• The need to navigate spam filters. E-invoices sent by email run the risk of ending up in the spam folders of recipients. Having a customer portal where invoices can get sent and customers can be informed can prevent this.
• Potential changes in workflow. Accounts Receivable and Accounts Payable processes can be improved with e-invoicing. Even while the modifications may simplify the life of the staff, some individuals might not be comfortable changing. It’s crucial to prepare them beforehand.
• The need to adhere to regulatory compliance. When conducting business with government agencies, many nations mandate that corporations utilize e-invoicing. Digital signatures, automated tax reporting, and keeping them for a period of time are further standard criteria.

Creating e-invoices doesn’t have to be a challenge. Online invoicing software such as FreshBooks makes it incredibly simple and quick to do. You can easily customize them with the touch of a button and add custom messages if needed. Here are the steps to take to create your own e-invoices:

• First, download your free electronic invoice template from FreshBooks
• Once downloaded, you can begin adding in all your business information, like name and other contact details
• If you have a logo, you can easily add it to the invoice template .
• Add your customer’s information, like their name, email address, and contact details 
• Include the invoice date as well as the invoice number
• Include the payment due date and the relevant terms for receiving payment 
• If needed, you can include any shipping terms
• Provide a description of the product or services you’re providing, including the quantity and price for each 
• If you need to, add in any sales taxes, credits, and discounts 
• Calculate the total amount of the invoice based on the services and prices you outlined 
• If you have any other payment terms , like how to pay the invoice or associated late fees, you can insert these details into the template
• You’re all finished and can save the invoice and then send it to the client however you see fit, which can be through email

Using professional invoicing software can bring a ton of benefits to your business. You’ll have peace of mind knowing that the invoice management process is not only secure but also well-organized. Ultimately, it’s the most efficient, simplest, and easiest way to invoice customers.

When selecting an e-invoicing system, consider the efficiency it can achieve through automation. Companies can accomplish that goal with the aid of e-invoicing features built into accounting software . Leading ERP systems, for instance, can produce e-invoices automatically from sales transactions.

Additionally, your solution should be able to meet specifications for a few things. These include document storage, determining appropriate taxes, and incorporating digital signatures as required. It’s most important to consider what your business actually needs.

FAQs on E-Invoicing

Why is e-invoicing needed.

It helps to streamline invoicing processes and limit the possibility of mistakes or errors occurring. Plus, it can help when it comes to approving and tracking several invoices for your business. 

Is e-invoicing mandatory?

No, e-invoicing is not mandatory for all businesses, but it is for some. Yet, leveraging the power of accounting software can make a huge difference. For example, FreshBooks offers an excellent solution to your invoicing challenges. It’s easy to use, intuitive, and offers additional accounting capabilities for your business. 

Is e-invoice mandatory for B2B?

Yes, all B2B transactions must include electronic invoices. This replaced the previous e-waybill system.

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E-invoicing: The Contact-free Way to Bill Customers

Does your invoicing process look a little something like this? Print, fold, stick paper in envelope, seal, add stamp, add addresses, mail, and repeat. If you’re cringing at the thought of having to mail off one more invoice to your customers, you might consider e-invoicing.

What is e-invoicing?

Electronic invoicing, also called e-invoicing or digital invoicing, is the process of billing a customer online rather than via mail. The customer receives their invoice either via email or a secure portal (e.g., an online account). Generally, businesses that use e-invoicing also give customers the ability to pay their bill online. 

If you’re thinking about e-invoicing customers, keep in mind that you need to include the same information you would on a paper invoice. Like traditional paper invoices, e-invoices include key information about a customer’s purchase, including:

• Customer and seller information
• Purchased goods or services
• Payment due date
• Acceptable payment methods
• Early payment discount (if applicable)
• Invoice number 

You might ask customers to opt into e-invoicing by signing up or acknowledging that they agree to e-invoicing. You may even add an incentive to customers who sign up (e.g., $X off their next invoice). Before sending digital invoices to customers, ensure they have access to the email address or the secure portal to avoid delays.  

Digital invoicing: Pros and cons

So, should you switch to electronic invoicing or include it in your invoicing process? Before making that decision, consider the pros and cons of e-invoicing. 

Here are some of the advantages of electronic invoicing:

• Convenience: You don’t have to worry about things like ink, paper, envelopes, or stamps when you bill customers. Instead, simply generate and send the invoice electronically.
• Automation: Depending on how you pursue e-invoicing (e.g., accounting software ), you might be able to automate the process for customers who have recurring invoices. That way, you don’t have to worry about remembering to create and send the bill.
• Time savings: That whole print, mail, repeat process? Gone. E-invoicing can save you the necessary time to mail invoices, especially if you use automation. 
• Faster payments: You may be able to speed up customer payments (and thus have a healthier cash flow) through electronic invoicing. Customers might be more apt to pay immediately upon receiving a digital invoice, particularly if they can pay online. 
• Digital paper trail: Sending customers electronic invoices provides a built-in (paperless) paper trail so you can better track records.
• Contact-free delivery: Your customers receive their bills without having to interact with any people or paper. 

Before you start sending customers electronic invoices, consider the following:

• Security issues: Some customers may not have secure email addresses, which may lead to security issues. 
• Spam filters: Depending on your customers’ email settings, your electronic invoice might land straight in their spam folder. 
• Customer preference: Not all of your customers will want to receive electronic invoices. Some may prefer hard copies. Again, communicate with customers before invoicing them electronically. 

How to create and send electronic invoices

Do you think sending customers their bills electronically is the way to go for your business? If so, understand how to create and send e-invoices to customers. 

You can create electronic invoices using:

• Accounting software

Once you generate your invoice online, you can send it to customers via email or through a secure portal, like their online account. 

If you use accounting software, you may be able to further streamline the process by:

• Setting up recurring invoices 
• Automatically sending out payment reminders 
• Choosing from invoice templates
• Tracking unpaid invoices (and paid invoices) in the software

Want to simplify the e-invoicing process? Patriot’s small business accounting software makes it easy to send customizable e-invoices to customers, accept credit card payments, and so much more. Start your free trial now! 

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Electronic Invoice: What Is It and How Does It Work?

July 2, 2024.

Issuing an invoice is simple in person. You just write down the details and give them to the customer. 

So when you’re used to paper, electronic invoices—also known as e-invoices—may seem complicated. Why fill them out online when physical ones work just fine? But e-invoices actually make the billing process easier. You can better personalize your invoices, remind customers about payment deadlines, and integrate them with your accounting system.

Here’s how to share invoices with a single click.

What Is E-Invoicing?

Many believe any invoice sent online is an e-invoice. But there’s more to it than that.

E-invoices are made with specialized software that offers more capabilities, like data reports and automations. And while these documents are digital invoices, they must meet certain criteria to be true e-invoices. These requirements make sure the invoice meets legal standards and is secure for businesses worldwide. 

To be an e-invoice, a document has to:

• Be in a digital format, like EDIFACT, XML, PDF, or X12
• Travel electronically from one computer to another
• Remain unaltered and unedited, keeping it accurate and trustworthy
• Contain all vital information, like the date and amount due

RELATED ARTICLE — How To Send an Invoice

Understanding the Mechanics of Electronic Invoicing

E-invoices contain the same necessary information as paper invoices, like:

• Invoice number
• Company name and logo
• Customer business information
• Description of goods or services rendered
• The amount due
• Payment methods and terms

Including all of this information keeps you and your customers on the same page. If there’s ever a dispute, you can both point to the invoice as a source of truth.

But the e-invoicing process goes beyond sending the invoice itself. Modern software, like Invoice Simple , can track the details for you and even automate parts of the process. For example, it automatically sends a client a message a few days before their payment is due. This saves you time and reduces late payments.

You can also customize your invoices using templates that make your business look more professional. Just plug in your payment information, due dates, and even your signature. Plus, software like Invoice Simple lets you save repeat customers’ information for later.

A digital invoice management system lets you focus more on growing your business and less on handling paperwork.

FROM ONE OF OUR PARTNERS — Advantages of Electronic Invoicing and Billing

Comparing Electronic and Digital Invoices: What’s the Difference?

E-invoices are a more specific type of digital invoice. Here’s a breakdown of how each works.

Digital Invoices

• Broader Range of Formats. Digital invoices can be in various formats, such as PDFs or scanned paper invoices.
• Convenience. These formats are easy to create and share via email or other digital means.
• Basic Features. Digital invoices have basic features. They often can’t connect with accounting software and lack advanced options, like real-time tracking.
• Manual Work. Managing digital invoices requires a lot more time and effort. You have to personally handle things like tracking, entering data, and following up with customers.
• Specialized Software. E-invoices use specific software to create, send, and receive invoices.
• Automation. To make payment and other processes easier, e-invoice software automates tasks.
• Seamless Integration. E-invoices can usually connect with your existing accounting systems. That means it’s much easier to make calculations and holistically track transactions.
• Advanced Features. E-invoicing systems have more features, like real-time tracking, automated reminders, and detailed reports.

FROM ONE OF OUR PARTNERS — What Is Payment Processing?  

11 Invoice Types: An Overview

Digital invoicing systems can create different types of invoices depending on your needs. Here’s a breakdown of the most common invoice types and their uses:

1. Sales Invoice

A sales invoice is the most popular type of electronic invoice. It’s used to request payment for goods or services sold. It includes details like:

• Supplier and customer information
• Description of goods or services
• Amount owed
• Payment deadline
• Accepted payment methods

2. Pro Forma Invoice

You give a pro forma invoice before delivering goods or services. It’s more formal and detailed than an estimate and acts as a statement of work. You and the customer use it to agree on payment and deliverables. It includes:

• Detailed cost breakdowns
• Description of the work
• Terms before the final sale or agreement
• Any other information needed to inform the customer before the final agreement

3. Past-Due Invoice

Send a past-due invoice to customers who haven’t paid by the due date. They may include late fees, and you should send them as soon as possible. They should also contain all details from the original sales invoice.

4. Credit Memo

A credit memo , or credit invoice, is used to give a discount or refund. This is often due to damaged goods or invoicing mistakes. 

5. Debit Memo

A debit memo, also called a debit invoice, indicates an increase in the customer’s owed amount. If your business uses more time and resources than originally estimated, you send a debit memo.

6. Mixed Invoice

This kind of invoice combines new credit and debit charges into one invoice, with the net amount reflecting what the customer owes. 

7. Commercial Invoice

If you do business with customers in another country, you use a commercial invoice . This type of invoice helps you send goods anywhere in the world smoothly. This invoice includes:

• Customs classification
• Description
• Price of the goods

8. Timesheet Invoice

A timesheet invoice tracks hours worked. Lawyers, consultants, and other professionals who charge by the hour or day use this type of invoice. It shows the number of hours worked and the hourly rate.

9. Interim Invoice

Interim invoices are for large projects that happen in stages. You send these invoices for partial payments when you reach set milestones. This helps manage cash flow for long-term projects.

10. Final Invoice

At the end of a big project, you send a final invoice. This shows the total amount owed after subtracting any payments made during the project. It makes sure all remaining balances are paid. It usually includes:

• A detailed breakdown of the total project cost
• Any previous interim payments
• The final amount due

11. Recurring Invoice

You use recurring invoices for continuous services. These invoices are issued monthly or at other regular intervals. 

RELATED ARTICLE — 10 Common Invoicing Mistakes and How To Avoid Them

4 Steps for Creating Electronic Invoices

Follow these four simple steps to transition to e-invoicing and take advantage of its benefits for your business.

1. Notify Customers

Inform your customers about your switch from physical or digital invoices to an electronic system. Tell them the date they can expect the new format.

Most new processes will happen behind the scenes, but if anything changes for them, let them know. For example, e-invoices might come by email instead of mail. Invoice Simple lets customers pay from the invoice itself, making things easier for both customers and you.

2. Implement the System

Choose an e-invoicing system that integrates with services you already enjoy, like PayPal and Stripe. This makes it easier to set everything up. Make sure to train your team on how to use the new system.

3. Create the Invoice

Use your new system to start creating invoices. Many services offer professional, customizable templates that make the whole process much faster.

Input all necessary details, including:

• Customer information
• Payment terms

Ensure the information is accurate before sending. 

4. Send the Invoice

Once you’ve created the invoice, send it to your customer through the e-invoicing system. The secure system makes sure the invoice reaches the customer securely. You should be able to track the invoice status to check receipt and follow up if necessary.

RELATED ARTICLE — Creating an Effective Invoice Number System: Best Practices

How E-Invoicing Streamlines Financial Operations

If you’re not convinced, here are the benefits of using an invoice management system. You can:

• Decrease costs. Sending documents online reduces the need for paper, printing, and postage. This leads to significant cost savings.
• Improve response times. E-invoices are delivered instantly. Because of this, you can speed up the payment cycle and improve your cash flow.
• Trust secure communications. Invoicing systems use secure channels to send invoices, which protects sensitive financial information.
• Maintain document integrity. E-invoices can’t be altered or edited. You don’t have to worry about unauthorized changes or data corruption.
• Integrate with most management systems. Most e-invoicing solutions integrate with existing financial and accounting software. Having this feature helps you manage your invoices and payments.
• Spend less time on administrative tasks. Using an e-invoicing system reduces the time you spend doing paperwork. You can focus on what matters the most—running your business. 

5 Tips for Choosing an Electronic Invoice Software

Knowing the advantages of e-invoices is a good first step. The next is finding invoice software that fits your unique needs.

Here are some invaluable tips for choosing the best electronic invoicing system for your business:

1. Centralized Financial Tracking

Choose a system that tracks your small business finances in one convenient place. This puts all your client details right at your fingertips so you don’t bounce back and forth between software.

2. Real-Time Notifications

Make sure the software sends notifications when invoices are delivered and read. This feature helps you avoid worrying about undelivered or missed emails.

3. Outstanding Invoice Tracking

Choose software that shows you which invoices are unpaid. It should also track their due dates and remind clients when and how they can pay.

4. Automated Income Reports

Look for software that automatically creates reports on your monthly and yearly income. You can identify top clients and the most profitable months, giving you the information you need to prioritize accordingly.

5. Accessible Report Exporting 

You should be able to export and send reports to your accountant or team members with one click. This simplifies bookkeeping and tax preparation, making the entire process a breeze.

RELATED ARTICLE —  Invoice Versus Receipt Basics: Everything Business Owners Need to Know

Use Invoice Simple for Streamlined E-Invoicing

If you don’t yet use e-invoices, you’re falling behind. Start with Invoice Simple , the invoicing software with easy setup and smooth automations. 

Invoice Simple sends alerts when your invoices are read and lets you easily track due dates. You can easily keep a list of clients and monitor your monthly income with built-in reports. And you’ll access unique templates that help you make beautiful, professional documents.

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Modern Spend Management and Accounts Payable software.

Helping organizations spend smarter and more efficiently by automating purchasing and invoice processing.

We saved more than $1 million on our spend in the first year and just recently identified an opportunity to save about $10,000 every month on recurring expenses with Planergy.

Cristian Maradiaga

Download a free copy of "preparing your ap department for the future", to learn:.

• How to transition from paper and excel to eInvoicing.
• How AP can improve relationships with your key suppliers.
• How to capture early payment discounts and avoid late payment penalties.
• How better management in AP can give you better flexibility for cash flow management.

E-Invoicing: What Is It, How Does It Work, and its Benefits

• Written by Mary Girsch-Bock
• 17 min read

IN THIS ARTICLE

What is electronic invoicing, what are the differences between an invoice, a digital invoice, and an e-invoice, how do you use an electronic invoice, what are the benefits of e-invoicing, what are the challenges of e-invoicing, why is e-invoicing needed.

The accounts payable department has never been known for its efficiency.

Every day, stacks of invoices are entered manually, while staff muddles through a tedious three-way matching process that matches invoices with purchase orders and receiving documents.

And let’s not forget about the manual approval process, where paper invoices are sent for approval, often getting lost in the process, with the approval process often taking days or even weeks, with lost or misplaced invoices a common occurrence.

In frustration, many businesses have turned to electronic invoicing, also known as e-invoicing, which has proven to be a game-changer for the supply chain, automating the entire process from invoice receipt to timely payment.

The recent pandemic reinforced for businesses worldwide that work must go on, even if remote connectivity is an issue.

Though e-invoicing has been around for more than a quarter-century, more and more businesses are jumping on board as they begin to see the advantages that using e-invoicing offers.

True e-invoicing uses structured data that allows the invoice to be read by both the buyer’s and the seller’s system and uses an XML format or Electronic Data Interchange Format (EDI).

E-invoicing is a practical choice if you need to do global e-invoicing. Today, throughout Europe, the European Standard, initially designed for public administrations, has made e-invoicing the most widely used method of invoicing by using a specific framework designed for easy document exchange.

For instance, Peppol is a popular framework, with 31 European countries as well as Australia, Canada, New Zealand, Singapore, South Africa, and the United States using the Peppol network to exchange invoices and other documents.

While it has yet to become widespread in the U.S., more companies are making the switch to a hybrid system that uses special invoicing software to read digital invoices, thus eliminating the need to enter invoice data manually.

Before you make the switch to e-invoicing, it’s helpful to learn the differences between a traditional invoice, a digital invoice, and a true e-invoice.

No matter what format an invoice is in, it needs to convey the same basic information. While the information may be the same, invoice formats can vary widely.

Traditional Paper Invoices

Processing AP manually continues to be the method of choice for many businesses, with more than 80% of businesses continuing to use paper checks to process payments.

Even today, many business owners look at AP as a cost center, making it less valuable than other parts of the business, so company owners and CFOs remain reluctant to switch to automation.

Smaller businesses that process few bills see even less need to automate the invoice process.

Digital Invoices

Digital invoices are one giant step up from paper invoices, usually sent in Word or PDF formats via email.

For companies that are using AP automation and invoicing software , these invoices can be automatically entered into the AP system for payment, matching the invoice with purchase orders and shipping receipts, routing the invoice to the appropriate personnel for approval, and sending the invoice to the right accounting software application for payment.

However, if recipients of a digital invoice are still using manual AP processing, a digital invoice does little to streamline the AP work process.

E-Invoicing

True e-invoicing requires the use of EDI, which structures the data so it is readable for both the sender and the recipient.

EDI invoicing requires that both the buyer and the recipient have the appropriate automation in place for it to be used.

Electronic invoicing is designed to eliminate all of the tedious work that is required when processing an invoice .

Beneficial to the seller, an electronic invoice is immediately recorded in your ERPs AP system once transmitted, eliminating the need to copy an invoice, enter it into an AP system manually, route the paper invoice to the appropriate approvers, or mail a paper check to the seller.

Keep in mind that once sent, an e-invoice cannot be changed or deleted, so it’s doubly important to ensure that the invoice is completely accurate before sending.

If you do accidentally send an incorrect invoice, you’ll have to issue a credit for the original invoice to cancel it out, and then issue a corrected invoice.

There are many benefits to e-invoicing for business partners. For buyers using an automated AP system, receiving an invoice electronically means that it will be scanned automatically into their AP system, eliminating the need to process invoices manually.

This is a huge benefit for businesses looking to cut down on the amount of paper they process manually while also freeing up internal resources to concentrate on more critical activities.

As more businesses turn to AP automation, there is an increased demand for automated AP applications like Planergy that streamline the entire procurement and AP process by automating once tedious tasks like data entry, three-way matching, and approval routing.

Using these systems helps automate the entire AP process by allowing users to quickly scan electronic invoices directly into the application, with Optical Character Recognition (OCR) used to eliminate the need to enter data manually.

But streamlining the AP process is just one of the benefits of e-invoicing. Whether you opt for true e-invoicing or use digital invoicing, these benefits are too great to ignore.

Increased Visibility and Accuracy

Using automated systems, including e-invoicing, gives managers and other stakeholders a better view of company finances and cash flow since invoice activity, purchase orders, and contracts are all visible.

Electronic invoicing also provides an in-depth view of the company in real-time, so you’ll always know how much you’ve spent, where you spent it, and where you need to cut down.

You’ll also be able to review the entire AP process from start to finish, easily viewing paid invoices, and those yet to be paid, with the ability to spot any potential payment delays before they become costly.

Reduce Paper Consumption

Besides saving money on paper and related supplies like ink, toner, and postage, making the switch to electronic invoicing and paperless AP also significantly reduces your carbon footprint.

And remember, all that paper has to go somewhere, so making the switch to an automated system will also save you on any associated costs such as storing documents at an outside facility.

Significant Cost Savings

When factoring in lost discounts, late payment penalties, a significant amount of data entry, and the cost of paper, postage, and envelopes, making the switch to e-invoicing can significantly reduce labor costs, freeing your employees to use their talents more productively.

These savings combined significantly reduce your accounts payable processing costs.

Elimination of Duplicate or Fraudulent Payments

Manual AP systems lend themselves to a significant amount of human error, including duplicate payments. Unfortunately, a manual AP system is also ripe for fraudulent activity.

Using an e-invoicing system eliminates duplicate payments while significantly reducing the risk of accounts payable processing costs .

Reduction in Missing Documents

Every time an invoice is sent in the mail, sellers are making the assumption that it will arrive at its destination timely. But the problem is, you’re relying on a system that you have no control over.

Mail gets lost or delivered to the wrong address. But even when the invoice is delivered properly, there’s no guarantee it will end up on the right desk. Paper invoices often get delivered to the wrong person initially or get routed to an approver, where they can sit for days.

With an e-invoice, you’ll always have access to a copy of the invoice, and after it’s been processed, it can be retained in electronic storage, making it easily accessible at any time.

More Accurate Reporting and Accruals

The stack of paper invoices sitting on your desk will not show up in your reporting totals until you enter them. Using an e-invoicing system, the minute an invoice is received or scanned into the system (for digital invoices), that total will be included in your payables.

Remember, that same stack of invoices can also impact your accruals and the accuracy of your reporting.

Benefits Both Buyers and Sellers

E-invoicing provides benefits for both buyers and sellers. For buyers using AP automation , receiving an invoice digitally can eliminate manual processing entirely, allowing them to scan the invoice directly into an AP automation system such as Planergy, which also works to streamline the entire three-way matching process, including easy matching of purchase orders and shipping receipts.

Using AP automation also provides automatic routing of the invoice for approval and quick turnaround on payment.

For sellers, using digital invoicing eliminates the need to manually create, print, copy, and mail an invoice to a buyer.

It also eliminates invoices lost in the mail, delivered to the wrong address, or simply getting lost once delivered.

And in many cases, when billed electronically, with an option to pay online, many buyers pay much earlier than those paying by check.

As noted, all of these advantages are dependent on whether buyers have automated their AP system. If you’re still processing AP invoices manually, receiving an invoice electronically will make no difference to your workflow.

Along with the numerous advantages, there are some drawbacks to e-invoicing, especially since many companies are only now beginning to transition to accounting automation.

The U.S. in particular has experienced a significant delay in making the move to an e-invoicing system, due to a series of challenges.

To date, the biggest challenge has been establishing common e-invoicing standards among various accounts payable and accounts receivable systems that will allow easy integration with current ERP systems.

Without these standards in place, e-invoicing could prove to be even more time-consuming and costly than the current manual paper systems in place.

Another challenge facing the widespread use of e-invoicing is the reluctance of smaller businesses to implement electronic payments , often citing security issues.

While many larger organizations have the systems in place to adopt e-invoicing, it’s only when others show their interest in joining the ranks, that a common standard will be established.

Today’s workplace is significantly different than it was only three years ago.

Though the pandemic highlighted the challenges of manual systems and in some cases served to accelerate the switch to AP automation and an e-invoicing solution, there are still a number of businesses that remain reluctant to make the switch.

But as more companies embrace this technology and the appropriate standards set, the choice will be made for them.

Proper AP management is at the forefront of forward-thinking businesses that are looking for a proactive invoice management system.

AP automation and e-invoicing do just that, streamlining business processes and payment processes while eliminating repetitive tasks, lost or misplaced invoices, and late payment penalties.

What’s your goal today?

1. use planergy to manage purchasing and accounts payable.

We’ve helped save billions of dollars for our clients through better spend management, process automation in purchasing and finance, and reducing financial risks. To discover how we can help grow your business:

• Read our case studies, client success stories, and testimonials.
• Visit our Accounts Payable Automation Software page to see how Planergy can automate your AP process reducing you the hours of manual processing, stoping erroneous payments, and driving value across your organization.
• Learn about us, and our long history of helping companies just like yours.

2. Download our guide “Preparing Your AP Department For The Future”

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How To Implement e-Invoicing: A 14 Step Checklist For Businesses

This post assumes readers are familiar with the general idea and processes of e-Invoicing in Malaysia , and focuses on how a business can best prepare for the inevitable transition.

As with all shifts, friction is inevitable, and the best leaders anticipate and mitigate them.  

Here’s  how we’ll break this down:

• We’ll (very) quickly recap a typical e-invoice flow
• We’ll list the three main sources of business constraints that can hinder this flow
• We get to the action item checklist!

Let’s begin.

A typical e-invoice flow for a business

We’re sure everyone has seen this photo by now – it’s the flow of how an e-invoice is created, validated, and submitted to LHDN.

From the diagram, a successful e-invoice flow requires three things to happen once a sale has been made:-:

• The supplier or an employee must create an e-Invoice and submit it to LHDN.
• The submission must be done either via MyInvois or third party software that can connect to MyInvois via API.
• The supplier must share the validated e-invoice with the buyer.

This means at the most basic level, three things are needed:

• A business representative to create and share the e-invoice
• A third party software or the MyInvois app
• The buyer’s tax information

Seems simple enough, so let’s explore three sources of organisational constraints that can bottleneck even the simplest of processes.

3 sources of business bottlenecks

Across the board, all business problems can be traced back to a combination of three things: people , processes , and technology .

Just one by itself is an issue, and several in tandem will almost certainly prevent a business from achieving a desired outcome.

Let’s see what these might look like in the context of e-Invoicing.

People (internal)

• Employees resistant to change
• Lack of knowledge on e-Invoicing guidelines
• Unfamiliarity with new software
• Transition period to build new habits  

People (external)

• Vendors and suppliers resistant to change
• Lack of standardisation across business units 
• Blind spots in how processes should change to accommodate e-Invoicing
• Business has too many transactions to use MyInvois effectively
• Current invoicing SaaS cannot integrate with MyInvois API

The e-Invoicing action item checklist 

Regardless of what industry you belong to, if you haven’t taken steps to address e-Invoicing implementation, the following 14 step checklist will come in handy:

People (internal) 

✅ Conduct general company-wide training on e-invoicing regulations.

✅ Conduct department / job function-specific e-Invoicing training.

✅ Develop easily accessible resources and guidelines for reference.

✅ Designate e-Invoicing champions within departments to act as a source of reference for colleagues.

People (external) 

✅ Exchange tax information with vendors.

✅ Explore alternatives to vendors resistant to e-Invoicing implementation.

✅ Enquire what third party software vendors are using.

✅ Conduct a thorough review of existing processes.

✅ Work with department team members to redesign processes as needed.

✅ Standardise e-invoicing protocols across business units to the extent possible.

✅ Verify with your SaaS providers that the software can integrate with MyInvois

✅ Ask for an onboarding training session to verify and upskill employees

✅ Explore alternative SaaS options if not compatible with MyInvois

Decision makers 

✅ 😌BE PATIENT!

All the best!

By the way, if you have concerns about e-Invoicing specific to healthcare, oil & gas, e-commerce, construction, or telecommunication, you might find answers in our 37 Industry-Specific FAQs On e-Invoicing !.

Let MISHU assist your e-Invoicing transition

Be it people, processes, or technology, get in touch with our team of experts to see how we can assist your business with organisation-wide adoption of e-Invoicing.

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For Business Owners

E-Invoicing Software: The Ultimate Guide to Streamlining Your Business's Financial Transactions

The digital revolution has brought forth numerous innovations that have transformed the way businesses operate and e-invoicing software is one of them. As the world moves toward a paperless future, adopting e-invoicing software is becoming increasingly important for businesses of all sizes. In this ultimate guide, we'll explore the benefits, features, and implementation of e-invoicing software, as well as how to choose the right solution for your business. let's dive into this comprehensive guide to learn everything there is to know about this game-changing technology.

Understanding E-Invoicing Software

 E-invoicing software is a digital platform that enables businesses to create, send, and receive invoices electronically, replacing traditional paper-based invoicing systems. This innovative software streamlines financial transactions, reduces errors, and improves overall efficiency.

Try our innovative E-invoicing software - Wafeq - we designed it to fulfill all your accounting needs and to give you the easiest E-invoicing experience.

Benefits of Adopting E-Invoicing Software

A. cost savings.

By eliminating the need for printing, mailing, and processing paper invoices, e-invoicing software significantly reduces costs. Furthermore, it automates manual data entry, cutting down on labor costs associated with invoice processing.

 Try Wafeq Starter plan starts at less than $19 USD. 

b. Increased Efficiency

E-invoicing software simplifies and accelerates the invoicing process, reducing the time required to create, send, and track invoices. Automatic payment reminders and notifications also minimize the need for follow-up communication, further boosting efficiency.

c. Improved Accuracy

By minimizing human error associated with manual data entry, e-invoicing software ensures that invoices are accurate and free of errors.

d. Better Cash Flow

E-invoicing software helps businesses get paid faster by reducing the time it takes to process and send invoices. Improved cash flow enables businesses to reinvest funds into their operations or pay off outstanding debts.

e. Enhanced Security

E-invoicing software provides a secure platform for sending and receiving invoices, minimizing the risk of fraud or data breaches.

Read more: e-Invoicing in UAE: Embracing Digital Transformation in Financial Transactions 

Key Features of E-Invoicing Software

A. automated invoicing.

E-invoicing software automates the invoicing process, allowing businesses to generate and send invoices quickly and easily.

b. Customizable Templates

E-invoicing software offers customizable templates that can be tailored to suit your business's needs, reflecting your brand identity and ensuring a professional appearance.

c. Payment Tracking

E-invoicing software enables businesses to track payments, ensuring timely receipt of funds and better cash flow management.

d. Integration with Accounting Software

E-invoicing software can integrate seamlessly with existing accounting software, streamlining financial management and ensuring accurate record-keeping.

e. Multi-Currency Support

E-invoicing software supports multiple currencies, allowing businesses to invoice clients in their preferred currency and facilitating international transactions.

Did you know?

Wafeq is the only e-invoicing software that supports multi-currency support in your transactions with no extra fees.

Choosing the Right E-Invoicing Software for Your Business

A. assess your business needs.

Before selecting e-invoicing software, evaluate your specific needs and requirements, such as desired features, scalability, and budget constraints.

b. Compare Different Solutions

Compare various e-invoicing software solutions to find the one that best aligns with your requirements. Consider factors such as ease of use, integration capabilities, cost, customer support, and security features.

c. Request a Demo or Trial

Many e-invoicing software providers offer demos or trial periods, allowing businesses to test the software before making a purchase. Take advantage of these opportunities to ensure the chosen solution meets your needs and expectations.

d. Read Reviews and Testimonials

Research reviews and testimonials from other businesses that have used the e-invoicing software you're considering. This will provide valuable insights into the software's performance, ease of use, and quality of customer support.

Read more: - How is Wafeq's accounting software changing the game for BNPL in MENA with Tabby? 

Implementing E-Invoicing Software in Your Business 

A. training and support.

Once you've chosen the right e-invoicing software for your business, it's essential to ensure that your team is adequately trained to use the system effectively. Look for software providers that offer comprehensive training materials, webinars, and ongoing customer support.

b. Data Migration

Migrating your existing invoicing data to the new e-invoicing software is a crucial step in the implementation process. This may require collaboration between your IT team and the software provider to ensure a smooth transition.

c. Integration with Existing Systems

As mentioned earlier, integrating e-invoicing software with your existing business systems can boost efficiency and streamline processes. Work with your software provider to ensure seamless integration and compatibility with your current systems.

d. Monitor Performance and Optimize

Once your e-invoicing software is up and running, monitor its performance to identify areas for improvement or optimization. This may involve tweaking settings, customizing templates, or addressing any issues that arise during use.

Read more: Understanding the Tax Invoice Law in the UAE: A Comprehensive Guide. 

The Future of E-Invoicing Software

As technology continues to advance, e-invoicing software is expected to evolve and incorporate new features that further streamline the invoicing process. This may include advancements in artificial intelligence, machine learning, and blockchain technology. Staying up to date with these developments will ensure that your business remains competitive and reaps the full benefits of e-invoicing software.

E-invoicing software is a game-changer for businesses looking to improve their billing processes, reduce errors, and enhance customer satisfaction. By selecting the right software solution and implementing it effectively, businesses can revolutionize their invoicing procedures and position themselves for success in the digital age. Now that you have a comprehensive understanding of e-invoicing software, it's time to explore the various options available and find the perfect solution for your business.

Read more: The Top Accounting Software for Small and Medium-Sized Businesses.   

What is e-invoicing software?

E-invoicing software is a digital platform that allows businesses to create, send, and receive invoices electronically, streamlining financial transactions and improving efficiency.

What are the benefits of e-invoicing software?

E-invoicing software provides numerous benefits, including cost savings, increased efficiency, improved accuracy, better cash flow, and enhanced security.

How does e-invoicing software work?

E-invoicing software automates the invoicing process, enabling businesses to generate, send, and track invoices with ease. It also facilitates payment tracking and can be integrated with other business systems, such as accounting software.

How do I choose the right e-invoicing software for my business?

When selecting e-invoicing software, consider factors such as ease of use, integration with existing systems, cost, customer support, and security features. It's also helpful to read reviews and testimonials from other businesses that have used the software.

Is e-invoicing software secure?

E-invoicing software typically offers robust security features, including encryption and secure data storage, to protect sensitive financial information and minimize the risk of fraud or data breaches.

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e-Invoicing: Pioneering the Transformation of B2B Transactions

The way businesses transact with one another is transforming. This presents an opportunity for vendors to develop innovative solutions that meet the needs of the modern B2B landscape.

The Emergence of a New Transaction Ecosystem

After decades of paper-based dominance, business-to-business (B2B) transactions are digitalizing and digitally transforming. e-Invoices and digital networks are streamlining accounts payable and receivable processes, enhancing efficiency and accuracy. Transactions are becoming enriched with data, especially to display sustainability-related information.

Spurred by new regulation, digital-first thinking, and good corporate governance, these developments are changing how businesses collaborate and transact with one another. Vendors have the opportunity to seize the moment and develop innovative solutions that meet the needs and requirements of today’s B2B landscape.

Transformation Drivers

What’s driving the transformation of business transactions? What is the future of the transaction?

Some 70% of businesses regard e-invoicing as an opportunity that goes beyond compliance and can unlock benefits like greater efficiency and faster payments.

According to IDC, regulations , digitalization, and sustainability are the three primary drivers of B2B transformation.

• Regulation: The introduction of e-invoicing regulations is accelerating the shift toward digital processes in B2B interactions. European and global businesses will need to adopt new technologies and workflows to ensure compliance with current and future regulations. The EU is already mandating the use of e-invoicing in business-to-government (B2G) transactions through Directive 2014/55/EU. The directive aims to streamline public procurement processes, reduce administrative loads, and improve transparency. Countries like Italy and Hungary already require e-invoicing for B2B transactions. Other member states like Germany are steadily advancing their frameworks for eventual legislation. 
• Digitalization: Digitalization is the process of converting analogue data into digital formats. Automation and AI tools are helping organizations digitalize and transform the way they handle external transactions, increasing the accuracy, speed, and real-time visibility of transactions.
• Sustainability: The environmental impact of delivering products and services accumulates along the value chain. For most European organizations, much of the environmental impact of their products occurs upstream in their supply chains. European organizations are now beginning to record ESG (environmental, social, and governance) data associated with their purchases. Invoices will start to feature financial and ESG data, with ESG metrics specific to individual products.

“New transaction ecosystems will make B2B transactions faster, more secure, and efficient while enhancing transparency and compliance.”

Tom Seal, Senior Research Manager, IDC

IDC’s Recommendations

The digital transformation journey, while indeed complex, unlocks a future of frictionless information sharing between businesses. The transition to business networks presents a prime opportunity for vendors.

The Future of B2B Transactions is Digital

• Organizations that share an increasing amount of data with their customers will require a new array of data from vendors to track sustainability performance.
• Much of the new data that will be shared among organizations will follow the existing transaction pathway. However, this pathway must be updated to meet new demands.

Transactions Will be Data-Rich

• e-Invoicing and other pressures will compel organizations to move beyond “paper thinking” during the 2020s.
• A new transaction ecosystem will evolve, enabling organizations to build a transaction workflow that meets the needs of their industries, operations, and legislative requirements.

Network-Enabled

• Future transactions will rarely be point to point. Rather, they will typically occur over a platform or network.
• The future will be a network of networks, rather than an array of competing networks.

What It Means for Vendors

• Beyond complying with legislation, application vendors must develop strategies that help them thrive within the new transaction ecosystem.
• Application vendors have an opportunity to win the race to be the conduit for new data flows, capitalizing on the growth opportunities they represent.
• Every application vendor must think about their networks or network connectivity. Network access will be critical but equally commoditized.  

The new transaction ecosystem offers significant benefits, and organizations will increasingly rely on vendors to provide the necessary expertise and solutions to unlock these advantages. For tech vendors, the future of e-invoicing and B2B transactions is not just about compliance — it’s about leading digital transformation and setting new standards of efficiency and sustainability in the industry.

Watch out for Part 2 of our Blog Series on e-Invoicing in the coming weeks.

Ready to elevate your solutions and empower your teams? Contact us for a deeper dive on how IDC can help .

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E-invoicing & the Commonwealth Digital Business Plan

• Category : Blog

COVID-19 has pushed everything into the digital space, with most products and services receiving some updated form of online delivery. Payments are no different, with more companies opting to use technology to help them process digital transactions, largely thanks to the way it minimises health risks.

What is E-invoicing?

E-invoicing is the ability to send an invoice digitally between the accounting systems of business suppliers and buyers.  This differs from sending a PDF file or online invoice via email as an e-invoice is automatically sent to the buyer’s accounting system through a secure e-invoicing network

Changes and business requirements

The Commonwealth government will mandate e-invoicing for all agencies from 1 July 2022, with over 80% of invoices being able to be received electronically by 1 July 2021. The government will also consult on options for mandatory adoption of e-invoicing across its’ own levels internally and across the business sector.

As part of the Digital Business Plan, the Commonwealth government has embraced the Peppol e-invoicing network, an internationally established standard that allows invoice exchange between different accounting systems with no human intervention, reducing the risk of interception and fraud.

To help push the adoption of e-invoices for businesses, the federal budget has allocated $15.3 million in funding to accelerate Peppol e-invoicing and reduce costs for businesses. This fund will involve supporting large payment platforms (EFTPOS, Visa, Mastercard and the Reserve Bank’s New Payments Platform Australia) to integrate e-invoicing into the payment methods used by business to help speed up payment times.

The government has also suggested the following benefits to making the switch to e-invoicing:

• Reduced Costs

According to the ATO business website , a physical invoice costs businesses an average of $30 and $27 for an emailed PDF invoice. In comparison, an e-invoice is said to cost $10 or less, largely due to the reduction in manual handling required. This means an estimated shared saving (between the sender and receiver of the invoice) of around $20 each time e-invoicing replaces a paper invoice.

• Less time and errors

Reduction in inefficiencies related to manual handling and the number of different systems used, meaning invoices will need to travel through fewer hands administratively (such as internal assurance processes) and lowers the possibility of getting lost in transit.

E-invoices are sent directly to a business’ existing financial system (via approved and authenticated participants), meaning the risk of sensitive information being stolen, leaked or intercepted is reduced drastically. The only parties that will see the e-invoices are the software providers, buyers, and suppliers. E-invoices will not go through or be viewed by the ATO. To be accredited for e-invoicing, Australian service providers must carry out appropriate validation checks and apply integrity measures. For example, they must check Australian business numbers (ABNs) to ensure they are active and valid for use in the e-invoicing environment. Validating ABNs provides you with greater assurance of the identity of the sender and increases protection against the fraudulent misuse of a business’s ABN.

• Reduced Payment Times

The Australian Government is supporting small businesses by offering improved payments times. Since 1 January 2020, Australian Government agencies have begun paying e-invoices within five days and paying interest on any late payments. This applies to contracts up to $1 million where both the buyer and supplier use Peppol e-invoicing systems.

• Connect once, trade with many

All businesses, in all sectors, can open their networks and trade with many partners, regardless of their size or the financial software they each use.

• Environmental Sustainability

Savings on material costs as well as reduction in environmental impacts through less paper, printing, and delivery costs.

For further information on how businesses can prepare, click here .

If you have any questions regarding E-invoicing for your business, get in contact today with our experienced team at Lockwood Partners.

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Digital Business Networks Alliance launches to operate US e-invoicing exchange network

News provided by

Jan 09, 2024, 08:57 ET

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New e-invoicing network allows all businesses in the US to electronically send and receive business documents via a secure virtual network.

HOUSTON , Jan. 9, 2024 /PRNewswire/ -- The participants from the  Business Payments Coalition 's E-Invoice Exchange Market Pilot today announced the establishment of the Digital Business Networks Alliance  (DBNAlliance), a nonprofit organization that serves as the legal entity overseeing the Exchange Framework. The DBNAlliance will be responsible for operating the electronic delivery exchange network in the United States . DBNAlliance's mission is to make the exchange of business-to-business documents smooth and frictionless, eliminating all the obstacles and inefficiencies that businesses are experiencing with traditional invoicing methods.  

"The US e-invoicing exchange framework will enable businesses to reduce costs, drive efficiency, increase accuracy, and improve security around their invoicing processes," said Jim Taylor, CEO, MarineNet and Interim President of the Digital Business Networks Alliance . "The DBNAlliance is committed to making it as easy as possible for businesses to connect with the exchange framework so that they can realize the benefits of e-invoicing."

The Digital Business Networks Alliance electronic network employs a four-corner model, where e-documents are sent and received through an access point or service provider that connects companies to the network. DBNAlliance will assist access points in connecting to the exchange framework and has responsibility for the definition of electronic delivery standards, policies, rules, and guidelines. The exchange framework contains four types of participants as part of the four-corner network – the supplier, two access points otherwise known as service providers, and the buyer.

Following the initial launch of the exchange framework, DBNAlliance will bring to market the electronic exchange of business-to-business documents to improve the efficiency of B2B payments and supply chain management.

The board of directors for the DBNAlliance consists of e-invoice service providers, corporate executives, and electronic document exchange experts who have extensive experience and knowledge of the exchange framework. Board members include:

• Chris Welsh , CEO, OFS Portal and Chair of the DBNAlliance
• Jim Taylor, CEO, MarineNet and Interim President of the DBNAlliance
• Dolf Kars, CEO, Storecove E-invoicing and Chair of the Membership & Adoption committee
• Alex Baulf, VP, E-Invoicing, Avalara
• David Harless , Director - OTC, GBS CI and Transformation, Halliburton
• Ellen Nielsen , Chief Data officer, Chevron
• Pankaj Gudimella , Senior Director, Microsoft
• Ricardo Poli , Americas Head of Globalization Product Management & Chief Product Owner, SAP
• Shawn Green , Manager, Supply Chain Global Services & Technology, ConocoPhillips

Today, DBNAlliance has more than 30 members and is actively recruiting new members with an initial focus on businesses in the energy, supply chain, and life sciences industries. Companies interested in connecting to the exchange framework can do so through a DBNAlliance access point service provider.

For access point service providers, the framework facilitates the connection of buyers and suppliers, simplifying a supplier's connection and ensuring that connection meets their customers' business rules. The framework enables access point service providers to enroll more suppliers onto their network, providing greater supply chain engagement for their buyer clients and improving straight-through processing. Service providers can become a full member of the DBNAlliance, which comes with an official DBNAlliance certificate.

If you are interested in becoming a service provider, DBNAlliance will be hosting an online presentation on Wednesday, January 24, 2024 . To register to attend, please email [email protected] .

To learn more about how your organization can connect to the exchange framework, please click  here . 

About the Digital Business Networks Alliance

The Digital Business Networks Alliance is an independent, tax-exempt company (501(c)6) that oversees the e-invoicing exchange network in North America. The Digital Business Networks Alliance's goal is to support the delivery of electronic business documents between service providers and businesses. The Digital Business Networks Alliance accomplishes this by leveraging a highly secure exchange network based on a set of open, non-proprietary technical standards and policies that allow businesses to discover and deliver data virtually to one another. For more information, visit https://www.dbn-alliance.org .  

SOURCE Digital Business Networks Alliance

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Electronic invoices

• E-invoicing

E-invoice/digital invoice is the most efficient way to receive and transmit invoice information. Invoices are immediately accessible with no need to scan. You can always trust that the invoice data is 100% accurate.

• What is E-invoicing
• Get to know E-invoicing

Benefits of E-invoicing

Customer stories, implementation, get started, what is e-invoicing.

E-invoicing, or electronic invoicing, is the process of sending and receiving invoices in an electronic format. This digital approach to invoicing allows businesses to automate the invoicing process, resulting in faster payments, reduced costs, and fewer errors compared to traditional paper-based invoicing.

Get to know is E-invoicing

– how does it work?

E-invoices are received directly in Rillion as soon as the EDI invoice function is activated. Electronic invoices are sent in the desired format, and suppliers who cannot handle electronic invoices send PDF or paper invoices, which are then converted into electronic data and delivered to Rillion.

Rillion’s service for receiving e-invoices has interconnection agreements with a large number of operators in the market and is an approved access point in all the countries where PEPPOL has been implemented.

Get started quickly

With e-invoices, you receive invoices directly from the supplier’s financial system. The interpretation is more precise because all information is transferred via data files.

We inform your suppliers free of charge that you want to receive e-invoices, and incoming invoices are then delivered as e-invoices.

E-invoice automation

– achieve a 100% digital flow

E-invoice management is at the core of our digital invoicing solution and serves as the foundation for streamlining the entire process from procurement to payment.

An optimal process is achieved by automating the processes within the management of digital invoices, including scanning, approval, and matching against incoming invoices and contracts.

To minimize the time spent on managing a digital invoice, an automatic invoice workflow is generated.

Eliminate errors

Eliminate manual errors that may occur during the manual entry of invoice data. The system flags false invoices and duplicates.

Gain control

With Rillion, you gain full control over all invoices, regardless of their status. You can identify potential bottlenecks in the process and easily locate invoices during or after the approval process.

Reduce costs

When many manual tasks are automated, you can handle increased volumes of supplier invoices without the need to increase your workforce.

Rillion automates several time-consuming tasks, such as scanning and interpreting invoices. E-invoices are received directly in the system.

All invoices in one place

With Rillion, you have a digital archive for supplier invoices, making it easy to find ongoing and completed transactions.

Unlimited users

There are no additional costs for having many users! Create as many user accounts as you need, both for approvers and administrators.

E-invoicing – Trusted By Banks

Rillion is trusted by banks and financial institutions in the US and Europe. Accreditations in the US include SOC1, SOC2, HIPAA, GDPR, and PEPPOL.

• Global solution for multiple ERPs, countries, currencies, and tax rules
• Unlimited users—no user license costs
• Bulletproof compliance control and minimal IT involvement

Read more about E-invoicing

“With our contracts being matched to vendor invoices for over 300 locations, Rillion has reduced our manual workload and really optimized our AP operations.”

Our customer cases.

We’re committed to solving your problems and making your job easier with our invoice capture solutions.

The time required for implementation of Rillion One and Rillion Prime may vary, depending on the features you choose and the ERP system you’re using.

Contact one of our experts today to schedule a demo. As always, we’re with you every step of the way.

Seamless integration with your ERP

Rillion’s solutions integrate with many popular finance and business systems.

FAQ – E-invoicing

What is e-invoicing and how does it differ from traditional invoicing?

E-invoicing, or electronic invoicing, is the process of sending invoices digitally rather than through paper-based methods. It differs from traditional invoicing in that it allows for the exchange of the invoice document between the supplier and the buyer in an integrated electronic format. This process is faster and more secure compared to the manual handling of paper invoices.

How does e-invoicing improve efficiency and cost-effectiveness in the accounts payable and receivable processes?

E-invoicing streamlines the invoicing process by automating many of the steps involved, reducing the need for manual data entry and minimizing errors. It accelerates the invoice approval process, improves the tracking and archiving of invoices, and facilitates faster payment cycles. This efficiency leads to reduced processing costs, better cash flow management, and potential early payment discounts from suppliers.

Can e-invoicing help with tax compliance and reporting?

Yes, e-invoicing can significantly aid in tax compliance and reporting. The systems can be configured to apply the correct tax rates, generate tax reports, and maintain detailed records for audit purposes.

E-invoicing is available for the following products

Rillion one.

Automated handling of supplier invoices for small and medium-sized businesses looking to get started quickly.

• Invoice Capture (OCR)
• Invoice Approval Workflows
• PO-Matching
• Payments as a Service
• Analytics and Reporting
• Advanced Search
• Documents & Contracts
• Seamless integration to ERP/accounting system

Scalable solution

Rillion Prime

Electronic invoice management and purchase-to-pay for larger organizations with high demands on automation.

• Recurring invoice automation
• Document Management
• Audit trail software
• Purchase to pay

Rillion – AP automation for your peace of mind

We are experts with over 30 years in the industry, trusted by customers in over 50 countries, 96% of rillion customers feel that the platform fulfills expectations, 95% consider rillion to be a worthwhile investment.

Find out for yourself how we can make your job easier!

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• GST Council's B2C e-invoicing plan to reduce tax evasion, improve compliance, say experts

• Alekh Shah ,
• Updated On Sep 11, 2024 at 09:53 AM IST

B2B electronic invoicing implementation has been smooth, scaling this system for B2C transactions will require considerable technological upgrades and staff training. The challenge will be managing the volume and technological demands Parag Mehta, Partner at N.A. Shah Associates LLP

Implementing electronic invoicing first in selected sectors and states is a sensible approach. This controlled rollout will help identify and resolve issues before a broader implementation Aditya Singhania, Founder of Singhania's GST Consultancy & Co,

Adequate testing and early adoption are key for a smooth transition, starting compliance voluntarily will help businesses adapt more effectively and preempt potential issues Abhishek Jain, Indirect Tax Head and Partner at KPMG

• By Alekh Shah ,
• Published On Sep 11, 2024 at 08:46 AM IST

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