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E-invoicing

E-invoicing or e-invoicing stands for electronic invoicing. E-invoices are data files sent, received and processed between and by accounting programs and/or order-to-cash and purchase-to-pay systems.

What is e-invoicing


Traditionally, invoices are sent between companies in paper form or as PDF. In a world where information technology is increasingly important, and where data is considered the new oil , processing and storing paper invoices and PDF invoices is cumbersome.

In fact, both forms of invoices originate from a supplier's software system, such as an accounting program or order to cash system, and are eventually received by another customer's software system, such as an accounting program or purchase to pay system. However, the information on the paper invoice and the PDF invoice do need to be "momentarily" put into this system. With 100,000 invoices, this is quite a task; especially when you realize that every invoice may contain errors and must be approved or rejected by budget holders.

With e-invoicing, the intervention of paper or PDF is skipped. Instead, data files are used, in which information is typically stored in a XML format. A form that, in principle, can be communicated directly between the software system of a supplier and the software system of a customer. So without the intervention of humans.

📖 READTIP Adoption e-invoicing: electronic invoicing not yet commonplace in Dutch businesses

E-invoicing and the government


The government wants e-invoicing for many reasons. One of the most important is to help businesses improve their administrative processes and support fraud prevention and control. With e-invoicing, the government gets more transparency in transactions.

E-invoicing makes it easier for companies to put information into accounting systems easily and quickly, leading to better financial reporting for the government. By adding transparency to transaction data, they can also enable more effective taxation. By betting on e-invoicing, the government can also help businesses save on paper invoices and valuable time through efficient information processing.

E-invoicing is also useful in pandemics or other situations where many businesses make purchases through online platforms, because it streamlines information sharing better than standard online processes that use disparate systems.

In short, the most likely reason the government encourages e-invoicing is that it can use it to detect and prevent fraudulent activity using consistent, reliable data and be confident that its transactions are trustworthy.

💡LEADALSO E-invoicing is becoming the norm: are you ready?

Benefits of e-invoicing


There are numerous benefits to using e-invoicing. The main benefits are:

  • It offers better efficiency and faster processing times, speeding up financial transaction flows.
  • Using e-invoicing, companies can closely track time-to-pay obligations, reducing the likelihood of liquidity problems.
  • Companies can store and share their data centrally, providing insight into their assets.
  • Eliminating paper documentation simplifies the process of invoicing and saves you money.
  • There is less to no risk of erroneous information by introducing special auditing software.
  • Because there is more visibility on all invoices, fraud prevention or control can be more easily performed.

E-invoicing is a way for governments to improve their administrative processes. It allows transactions to be processed more quickly, securely and efficiently. E-invoicing gives the government more transparency in transactions and can save money on paper invoices.

The use of e-invoicing offers further benefits for businesses, such as reducing costs for paper invoices, simplifying VAT reporting and increasing competitiveness at the European level. Moreover, e-invoicing helps manage risks from pandemics by putting information directly into accounting systems and keeping all data secure.

Through e-invoicing, companies can speed up their accounting processes, allowing them to spend more time on other important matters. E-invoicing is thus an excellent way to reap its economic benefits.

 

E-invoicing platform


Despite the benefits that e-invoicing has, its use is still anything but commonplace. This is because e-invoicing is not only an internal matter, but depends on the cooperation of suppliers. Moreover, there is not one e-invoice standard, but many different XML-based standards, such as HR-XML, SETU, various UBL standards, Finvoice. It is therefore a matter of converting incoming invoices from suppliers to the desired standard.

In this, there are several solutions that vary in degree of relief. Incoming paper invoices, for example, can be scanned yourself and then translated online into a validated data file (XML). You can do that translation yourself, validating the scanned document (accounts payable data) and encoding it (general ledger accounts), then sending the validated data file into a procuration workflow for approval by budget holders. Or you outsource this work to us.

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