What is e-invoicing? (1/3)

What is e-invoicing? (1/3)


What is the electronic invoice? It is the electronic fiscal proof of delivery of a product or services and it has the same legal validity as paper-based invoices. Electronic invoicing is becoming the alternative to the current paper invoices for a modern and ecological world.

Electronic invoice should comply with legal regulations of each country and also guarantees the authenticity of its origin and that the original contents have not been manipulated.  

The big difference is that e-invoicing is issued, transmitted and received in an electronic format. It should comply with country’s legal regulations and both the issuer and receiver have agreed on the communication workflow to be used.

It is important to mention that the e-invoice will be managed by a software program that is responsible to guarantee the legibility and verify the authenticity of the e-invoice in several different ways:
  • Electronic signature
  • Any certificate in accordance with the laws and regulations
  • EDI as Data Interchange method
Based on the format there are two types of e-invoices: structured or a non-structured format. The non- structured format is similar to an image copy of the paper invoices. For example scanned invoices and PDF files with or without signature and they are sent by email. 
The structured format of e-invoicing allows the automatically transmission between the issuer and receiver systems. From machine to machine. No manual intervention is required. Most used structured formats are based in language XML and EDIFACT. 
The structured format e-invoicing will require a new implementation process but it offers a great number of benefits:
  • Cost savings:  eliminating of paper, postal shipment and paper archiving expenses
  • More Efficiency: eliminating of duplicating manual data entry and shorten the periods of payment
  • Integration:  Direct communication between issuer system and receiver system speed up the exchange process
  • Security: End-to-end process can be monitored preventing human error and fight against fraud
In summary companies moving to address the e-invoicing solution in a structured format will contribute to creating a modern, efficient and ecological  e-commerce  world.