Electronic invoicing involves the exchange of payment documents between a buyer and seller through an integrated electronic format. Like any other paper-based process, invoicing is labor-intensive and prone to human errors. Everyone would want to have the best e-Invoicing solution for their business. However, you need to consider some factors before committing to your decision. Both in-house software approach and an e-Invoicing service provider have some common features. Here are seven essential elements of any long-term, sustainable e-Invoicing solution.
Integration with Accounting Systems
Most companies often leverage the accounting functionality integrated into their Enterprise Resource Planning (ERP) systems. As such, any e-Invoicing solution should easily integrate with ERP add ons. It should also integrate easily with your current workflow system without altering the existing functionality. As such, you can continue to use your current financial system to control payment transactions and process data.
Electronic Document Exchange
Your e-Invoicing solution should allow you exchange documents with suppliers and buyers. It must also support all documents that form part of your invoicing process. These documents include credit notes, POs, debit notes, and payment instructions. Your e-Invoicing solution should be able to accommodate your company’s communication strategies and security policies.
Regulatory Compliance Service
Business regulations are often similar in purpose. However, they tend to vary from one country to another. Some of the legal variances include:
- Data compliance- Countries have different rules regarding minimum invoice data
- Digital signatures- In some countries, invoices need to be digitally signed to guarantee their integrity and authenticity
- Government systems- Countries are increasingly mandating the use of e-Invoicing. In fact, some e-Invoicing solutions come with government controlled policies and standards
Non-compliance with the government policies can lead to sanctions. It might be in the form of fines or repayment of the already deducted VAT. Your e-Invoicing solution should comply with all government regulations.
Data Quality Service
Your e-Invoicing solution should help streamline the process of invoice validation. It should help you perform data quality checks before delivering invoices to buyers.
Archiving is a component of e-Invoicing that varies from one country to another. Many countries require you to archive e-Invoices for extended time frames. A good e-Invoicing solution should facilitate digital storage and make it easy to access and retrieve electronic invoices.
Auditing and Reporting
Sales tax and VAT represent the largest part of GDP of most countries. As such, internal and external audits are essential components of any e-Invoicing solution. Your e-Invoicing solution should be able to provide the following:
- Display invoices in a readable format
- Display data protection laws
- Display reports for internal and external audiences
- Provide non-signed EDI
After integrating suppliers into your e-Invoicing solution, look for ways you can maximize the potential of this integration. You can use electronic means to interact with suppliers either individually or as a collective. As such, you can ensure suppliers sign compliance documentation. With digital invoicing solutions, you can simultaneously interact with numerous suppliers and perhaps respond to their questions.