Five Considerations for Selecting an e-Invoicing Solution

While implementing an e-Invoicing compliance solution is a considerable initiative, there are also significant upsides.  Through its research, my firm Billentis has found that organizations can save approximately $10–$20 per invoice by transitioning from paper to e-Invoicing.

This type of efficiency gain explains why regulatory mandates are not the only reason companies are adopting e-Invoicing capabilities. More organizations are voluntarily moving from paper-based invoicing to electronic invoicing, in part, because more of their trading partners are doing the same. In addition, companies are engaging in “integrated digital trade,” which links procurement, accounts receivable, accounts payable, accounting, and tax systems between buyers and sellers to enhance purchasing and payment efficiency while improving business agility.

Regardless of whether a company is voluntarily adopting e-Invoicing, or doing so in response to a tax authority mandate, it’s helpful for tax, finance and IT teams to keep the following points in mind:

1. Compliance requirements address inbound and outbound processes: e-Invoicing and e-reporting mandates affect both outbound and inbound invoicing processes. Looking for a solution that supports both helps from a compliance and an efficiency standpoint.
2. Compliance requires cross-functional collaborations: In addition to procurement activities, accounts receivable processes and other finance and accounting activities, e-Invoicing also affects tax groups, legal and compliance teams and IT groups responsible for managing system integrations.
3. System integrations matter: When looking for an e-Invoicing solution, integration and flexibility are crucial. The solution must integrate with the ERP system. It also needs to connect to procurement platforms and other accounting applications. Additionally, larger companies often have multiple versions of these systems. “You may be using different source systems for different customers, transaction types, suppliers or markets,” writes Chris Hall, Senior Tax Officer in Vertex’s Chief Strategy Office. “Ensure that your e-Invoice automation solution covers all these inputs.”
4. Scalability is also important: Flexibility and scalability are important qualities in an e-Invoicing solution for a couple of reasons. First, e-Invoicing rules continue to evolve. Second, companies continue to grow. When this growth subjects organizations to e-Invoicing requirements in a new country or tax jurisdiction, an effective solution easily adjusts to comply with those rules.
5. Homegrown solutions have their limits: Internally developed solutions may work perfectly well in one country, but not as well in others where tax authorities have unique data submission requirements. That’s why we recommend companies look at e-Invoicing solutions developed by outside vendors.

Finally, keep in mind that not everything needs to be performed at once from a technology implementation perspective. Large scale rollouts are often more time-consuming, disruptive and expensive. Look for an e-Invoicing solution that you can implement relatively quickly and then scale as your compliance needs evolve.