What is eInvoicing?
Electronic invoicing, also known as einvoicing, is the process where invoices are sent and received digitally in a standardized format. It replaces traditional paper invoices and email PDFs with fully automated workflows.
eInvoicing is the future of invoice processing - a standardized process that ensures faster, cheaper and more reliable invoice exchange between organizations worldwide.
Standardized
eInvoices use universal formats like UBL, enabling automatic processing without manual input.
Efficient
Send and receive directly via secure networks like Peppol, without delays or errors.
Legally Valid
Recognized by tax authorities and complies with all European directives for electronic invoices.
Basic Concepts of eInvoicing
Brief History of eInvoicing
eInvoicing found its origins in the late 1990s as an innovative way to automate administrative processes between large companies. The introduction of standards like UBL (Universal Business Language) provided more uniformity.
Today, einvoicing is supported by national and international legislation, with the European directive encouraging adoption since 2014. Through technological advancement and standardization, organizations across various sectors and countries now have the ability to invoice completely digitally.
How Does eInvoicing Work?
eInvoicing is a standardized process where invoices are sent and received digitally. Unlike paper invoices or PDF files, einvoices are processed in a specific format, such as UBL (Universal Business Language). This enables automatic processing by software, without the need for manual input.
The Process Step by Step
- Creation: eInvoice is generated in your accounting software
- Sending: Via secure network like Peppol to receiver
- Receipt: Automatic delivery in receiver's system
- Processing: Direct import without manual input
- Archiving: Automatic storage according to legal requirements
The process begins with composing an electronic invoice in your accounting software. This invoice is sent via a secure network, such as the Peppol network, directly to the receiver. The receiver can process the invoice directly in their own system, ensuring fast and error-free handling.
What Does an eInvoice Look Like?
An einvoice is actually a structured XML document. It consists of standardized code, where all information is placed in fixed locations. The special thing about an einvoice is that it is software-readable, can be processed automatically, and prevents errors.
Characteristics of an eInvoice
- Structured XML format (usually UBL)
- Machine-readable data in fixed fields
- Automatic validation of data
- Digital signature for authenticity
- Direct integration with accounting systems
Benefits of eInvoicing
eInvoicing offers organizations many benefits, from cost savings to improved compliance. Here are the key advantages highlighted:
Cost Savings
No more printing, sending, storing or manually entering paper invoices.
Fast Processing
Electronic invoices are delivered directly and processed automatically.
Fewer Errors
Automated workflows minimize human errors during input.
Compliance
Comply with European regulations and government requirements.
Sustainability
Contribute to a greener future with paperless invoices.
Reliability
Secure and traceable thanks to networks like Peppol.
eInvoicing in Transaction Chains
eInvoicing plays an essential role within various transaction chains that businesses and governments use:
Order-to-Cash (O2C)
From the perspective of the selling party, this covers the moment an order is placed until the receipt of payment. eInvoicing accelerates this process by sending faster and error-free invoices and processing payments.
Purchase-to-Pay (P2P)
From the purchasing party's perspective, this process includes all steps from ordering to payment. eInvoicing provides more efficient purchasing processes and complete control over documentation.
E-procurement
This concerns the entire digital process of electronic purchasing, including tenders, contract management, and deliveries. eInvoicing is a core component here that ensures seamless integration between different systems.
Legal Aspects & Compliance
eInvoicing and Tax Authorities
eInvoicing is fully recognized by tax authorities. Electronic invoices have the same legal value as paper invoices, provided they meet specific criteria.
Legal Requirements
To meet legal requirements, einvoices must comply with:
- Authenticity of origin - The sender must be clearly identifiable
- Integrity of content - The content must not have been changed
- Readability - The invoice must be understandable to all involved parties
Benefits for Compliance
Tax authorities see einvoicing as an efficient way to process invoices correctly and validly. Because einvoices are standardized and can be processed or imported directly from accounting systems, fewer errors occur and processes are faster. This also leads to more efficient controls and compliance with tax obligations.
Peppol & eInvoicing Networks
eInvoicing and Peppol
Peppol has taken einvoicing to a new level by providing a globally standardized network for the secure and efficient exchange of invoices. Instead of complex point-to-point connections, Peppol offers a single access to a network with millions of organizations.
Benefits of Peppol
- Global reach via one network
- Standardized document formats (UBL)
- Secure transport protocols (AS4)
- Unique identification of organizations
- Certified access points
With Peppol, einvoicing becomes fully automated, from sending to receiving, without businesses having to worry about technical compatibility or security. The network supports multiple standards and validates that all legal requirements are met.
Useful Resources
Discover more about einvoicing and Peppol via these official sources:
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Peppol.nu - Your guide in the world of electronic invoicing
