Electronic invoicing (e-invoicing) was brought under the microscope in the United Kingdom in 2014 after the UK Government launched an inquiry into e-invoicing in the public sector, and announced e-invoicing initiatives to be rolled out by April 2019.
At the time, the MP tasked with the inquiry, Stephen McPartland, positioned e-invoicing as a technology that could streamline UK government admin processes “at a stroke”, saving the public sector and its suppliers a minimum of £2 billion a year. “E-invoicing could open up new markets throughout the country and help drive innovation and economic growth.”
This followed a new standard and directive on e-invoicing by the European Parliament in April 2014, which made it mandatory for all EU Member States to adopt a new e-invoicing standard. According to the directive, “all contracting authorities and contracting entities [are to] to receive and process e-invoices complying with the European standard”.
“We live in a world driven by digital innovation where efficiency and productivity benchmark new standards and expectations for business,” states McPartland’s report.
But what does this relatively new billing method – made possible by digital technology – entail, and could it live up to the expectations that have started to gain a foothold not only in the UK and Europe, but in countries all over the world?
A research paper, set to be released in the coming months by the International Monetary Fund (IMF), expounds how mandatory e-invoicing in Peru is helping increase firm sales and tax revenues. “Drawn by its potential to strengthen tax compliance and reduce costs, Peru is among more than 50 countries around the world to have implemented e-invoicing and many others are preparing to follow suit.”
Essentially, an e-invoice is a statement created by suppliers and businesses to send to customers and clients requesting money. Typically, these are sent in PDF form and allow for circumvention of manual paper-based processes and physical paper documents that require a further set of physical procedures.
True e-invoicing – i.e. invoicing that is electronic in nature from start to finish – offers total automation, which in turn enables higher levels of efficiency and productivity, as well as significant financial savings in terms of resources.
Wikipedia defines e-invoicing as a form of electronic billing. “E-invoicing methods are used by trading partners, such as customers and their suppliers, to present and monitor transactional documents between one another and ensure the terms of their trading agreements are being met. These documents include invoices, purchase orders, debit notes, credit notes, payment terms and instructions, and remittance slips.”
The advantages of this system of electronic billing that over 50 countries across the world are looking at implementing, extend to both suppliers and buyers, and broadly include:
- Process automation, which means time and money savings and, in turn, faster payment time.
- Less disputes, due to the fact that invoice data is directly transmitted from supplier to customer electronically, creating a full audit trail.
- Mitigation of human error, thanks to the high level of automation in the invoicing cycle.
- Better supplier/buyer relationship and improved customer satisfaction, because processes are far more streamlined and reliable.
For more information on the automation of invoices and SigniFlow’s digital business solutions, visit our website, https://www.signiflow.my/, or contact us on the relevant number below:
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- European Commission – European legislation on e-invoicing
- Wikipedia – Electronic Invoicing
- Finextra – Electronic Invoicing in the UK Public Sector, post Brexit
- European Union – eInvoicing in United Kingdom
- NHS – Is your organisation on board with e-invoicing?
- PEPPOL (Pan-European Public Procurement On-Line) – e-Invoicing explained
- NHS – NHS Shared Business Services eInvoicing Information Guide for Suppliers (PDF)
- Future-Focused Finance – eInvoicing: a win-win for providers and commissioners
- IMF – Electronic invoicing reform in Peru paying off
- Finextr – Electronic Invoicing in the UK Public Sector, Post Brexit
- tips – Electronic Invoicing: The next steps towards digital government (2014 Report following Inquiry into electronic invoicing (‘eInvoicing’) in the UK public sector.)
- EUR-Lex – Directive of the European Parliament and of the Council of 16 April 2014 on electronic invoicing in public procurement
Source: SignFlow News