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Introduci il concetto di fattura con un breve video educativo che spiega il loro scopo, componenti e importanza nell'economia.

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Chiedi agli studenti di creare una fattura fittizia utilizzando un template reale. Questo li aiuta a familiarizzare con il formato standard e i vari elementi di una fattura.

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Organizza un'attività di studio di caso in cui gli studenti analizzano diverse fatture d'azienda, identificando gli elementi chiave e discutendo eventuali irregolarità o peculiarità.

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Initial situation: Introducing our client

Our company was contacted by a trading company that handles approximately 1,500-2,000 incoming financial documents per month. The vast majority of these are invoices, more than two-thirds of which are issued under a Hungarian tax number.

According to the client, incoming documents are filed, sorted and integrated into company processes manually. The related workflows are supported with various Microsoft Excel tables and email streams.

Issues to be solved: Delays, chaos and flying blind

Our client's employees listed at length and in detail the problems that are becoming more critical day by day, which have resulted in constant supplier complaints, internal conflicts resulting in significant turnover, manual coordination tasks that consume a lot of resources and are of questionable efficiency, and uncertainty due to the lack of up-to-date and reliable data.

We have identified the following main problems in the management of vendor invoices:

Adhering to the payment deadlines is a significant challenge, delays are common, because the internal approval and authorization process takes more time than the specified period of the deferred payment.

In many cases, the receipts disappear, get lost, and this only comes to light when the supplier complains about the expired claim. In such cases, it is not uncommon to have to re-request the affected invoice and start the approval process from the beginning.

In the case of internal approval processes, it is a daily challenge to decide which employee's contribution is required for a given case, and whether the person concerned even knows that he or she has a task to perform in this regard, which in many cases causes conflict.

Only general ledger analysis of supplier invoices is available after the end of the given VAT period, retroactively. There is no real-time, reliable, meaningful data available for the preparation of various forecasts, cashflow planning, and financial planning at the partner level, which makes it impossible to make well-founded decisions.

The management, filing, binding, and foldering of various documents consumes a lot of resources.

Are the above problems familiar?

Discover Onespire Ltd.'s corporate document management application, which can be an effective digitization and workflow automation solution for the challenges described!

Onespire's recommendation

Solution 1.0 - Optimizing the processing of incoming invoices

After identifying the issues and requirements, our company's experts first outlined an application for our client that optimized the process of handling supplier invoices and other documents at the following points:

All incoming invoices and receipts are digitized, so the data content of the documents are available in the database after digital processing, where they are stored as digital data, i.e. not only in image format.

Steps of digital processing:

If it is a readable PDF file, then the application extracts the data content of the document.

In the case of a paper-based receipt, after scanning the document, the data is digitized using optical character recognition (OCR).

Through the National Tax and Customs Office (NAV) interface, the application queries supplier invoices with domestic tax numbers from the database of the tax authority.

If necessary, the data content of the invoice will be recorded manually.

All incoming invoices are received digitally, storing the exact time of reception using a time stamp. The time-stamped digital document is equivalent to the paper-based document, so its storage and foldering is unnecessary. Thanks to this, the company only has to keep digital copies of the receipts.

Paper-based documents can be stored in bulk, without sorting and categorization, or even destroyed. The time stamp is integrated into the system using Netlock's service.

During the initial account assignment, in the case of invoices with several item lines, the item data is also recorded, using digital data extraction or, in the case of exceptions, manually. In the initial account assignment phase, the rate of digital data extraction exceeds 80 percent.

During the execution of the invoice verification and approval process, all incoming invoices are signed or rejected by those responsible in accordance with a predetermined process. The invoice verifying processes run digitally (workflow), the rate of automation is over 90 percent. In the vast majority of cases the system starts the appropriate approval process automatically based on digital data processing, without any human intervention. In the remaining exceptional cases, an operator decides who should approve the given document.

In the steps related to the supplier master and assignment, the system continuously imports the company's central supplier master data from the SAP ERP system via an interface (LINK to the Onespire SAP services page).

During digital processing, the incoming receipt is automatically assigned to the supplier. When required, an exception process is initiated if the invoice was sent by a partner, which is not yet included in the supplier master data sheet.

The consistency of the system is ensured because it operates from the supplier master of the SAP ERP system and the data remains synchronized.

The initial account assignment data and the invoice values assigned to the supplier are sent to the general ledger in such a way that the system we developed transfers the digitally processed and pre-billed data according to the company's own business logic to the SAP ERP system through an interface.

After that, the accountant checks the submitted data and, if necessary, corrects it before accounting. However, there is no need to record the data content of the invoices again, our solution does it automatically. Based on practical experience, a small percentage of items require correction before processing, after the verification they are posted in the ledger without modification.

In our solution, it is possible to display the initial account assignment data at report level, in the form of Microsoft Excel tables and dashboards, as well as the efficient execution of financial planning tasks, such as cash flow, supplier-level financial planning, various forecasts, or cash discount based on real-time and reliable data.

In the digital invoice and document repository in our application, all receipts can be retrieved based on various metadata, such as name, date, amount, period, or product group.

Benefits provided by Onespire Ltd.'s invoice management solution

With the help of the corporate document management, digitization and workflow automation solution developed by our company, we had the following experience with the issues that previously caused critical challenges for our client:

The approval process of supplier invoices has been significantly accelerated, the turnaround time has been shortened from several weeks to a few working days, ideally a few hours. This practically eliminated supplier complaints, which greatly improved our client's reputation within a short period of time.

All approval process steps have a clear status, employees know exactly who handles a given item. Thanks to this, the previous conflicts in the distribution of tasks and responsibilities also disappeared, and in turn the fluctuation also normalized.

The approval process and financial preparation of the receipt, the initial account assignment, now take place simultaneously. Thanks to this, the finance department knows about the receipt and can see the process of approval or the possible rejection.

After the implementation of our solution, the "document hunt" within the company, which used to take a lot of time for the employees, essentially stopped.

Digital processing has freed up significant resources, which can now be used for other value-creating processes.

With the introduction of our application, documents are now stored digitally, so the previous time-consuming and wearisome binding and boxing is a thing of the past.

Additional optimization possibilities

Solution 2.0 - Introduction of new functions and services

After the implementation of the enterprise document management system developed by our company, we identified additional points with our client where we can make the management of documents even more efficient and smooth with the help of the Onespire DocuLine solution, further reducing resource expenditures:

Reconciliation of incoming invoices and especially collective invoices with delivery notes (significant delivery and reception of goods vs. one collective invoice).

Reconciliation of purchase documents (PO, Purchase Order) created in the SAP ERP system with incoming invoices.

Up-to-date monitoring of the financial status of procured items.

Digitization of the small-value purchases process from request to posting in the ledger.

Structured and digital storage of contracts, incorporating the digital signature provided by Netlock.

Creating a digital document library of company projects, with a project view. With this, all documents can be viewed in one place, such as invoices, performance certificates, contracts, and project documentation.

Discover how Onespire Ltd. can support the efficient operation of your company with its enterprise document management application, digitization, invoice management and workflow automation solutions!

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Case study: Optimizing the supplier invoice management process at a Hungarian electronics trading company

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Initial situation: Introducing our client Our company was contacted by a trading company that handles approximately 1,500-2,000 incoming financial documents per month. The vast majority of these are invoices, more than two-thirds of which are issued under a Hungarian tax number.

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Simula un contesto aziendale in classe dove alcuni studenti agiscono come fornitori e altri come clienti, scambiandosi fatture e discutendo i termini di pagamento.

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Mostra agli studenti come vengono generate le fatture tramite software specializzati, dal inserimento dei dati fino alla finalizzazione dell'operazione.

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How to Create Invoices | Express Invoice Tutorial

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Conversazione su Normative delle Fatture

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Conversazione su Normative delle Fatture

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Invita un esperto di contabilità o un imprenditore locale a parlare delle normative che riguardano le fatture in Italia, fornendo una prospettiva reale e pragmática sulla materia.

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Although the idea of electronic invoicing is nothing new, implementation of this technology has only been happening relatively recently. This is because electronic invoicing was adopted several years ago in many countries such as those in the Nordics and Latin America. In the Nordics, e-invoicing was introduced to optimise business processes and reduce operating costs, while in Latin America the key driver for change was due to the VAT gap. However, in some other countries, electronic invoicing was introduced more recently or is going to be introduced in the coming months or years. Still, there remains other countries without e-invoicing legislation, so paper invoices are still treated as legal documents.

What's more, it is very important to keep in mind that digitisation of the invoicing process - replacing of paper documents with electronic equivalents - is just the first step towards invoicing process automation that will result in business process improvements such as higher quality data, more advanced information security, rapid configuration, and improved cash flow.

Many companies planning to implement an e-invoicing process are no longer looking for basic digitisation. They are seeking modern e-invoicing systems that provide a holistic approach to the invoicing cycle and can bring additional value/functionalities that make the invoicing process as automated as possible. This can be achieved, for example, through the use of AI/ML-driven data processing and analytics or by introducing features designed to help facilitate the onboarding process.

This article focuses on legal compliance, specifically what it means for electronic invoices in terms of legal requirements that should be met in order to take the first step towards e-invoicing process automation.

Legal compliance

Generally, legal compliance refers to actions and practices that are executed in accordance with the local laws of a country in which a company operates. Going deeper, we can break down legal compliance into two parts: legal and compliance. Legal means local legislation and/or rules, and compliance is about acting in accordance with these requirements.

In the realm of electronic invoicing, legal compliance means acting in accordance with local rules that define how e-invoices can be processed by businesses in a given country.

To be more specific, there are laws that define how e-invoices should be exchanged between parties. This includes rules on the format of electronic invoices, the way they are exchanged (directly or via the tax authority), and archiving (storage period, location of the archive, archive formats).

The following elements should be treated as key points when we consider legal compliance for electronic invoicing:

Authenticity of origin - this means ensuring that electronic invoices are really sent by the invoice issuer, and not by someone who is impersonating them. Legally accepted ways of ensuring authenticity of origin may include the use of electronic signatures or exchange of electronic invoices via electronic data interchange

Integrity of the content - this means that the content of the document is secured and was not changed during the whole lifecycle of the electronic invoice (from the moment the document was issued and delivered to the recipient to the archiving period). Similar to authenticity of origin, we can encounter different IT requirements (e-signature or EDI).

Legibility - this requirement ensures that electronic documents are readable through the entire period of the document's validity. This is of particular importance when e-invoices are exchanged in a structured format (XML or UBL) and a human-readable preview is provided.

Storage - meaning the length of time for which electronic invoices should be archived and available for any tax inspection or audit. This can also define the location of the archive, for example whether local storage is required (in your own country) or whether archiving abroad is acceptable.

It should be noted that "tax compliance" is not the same as "legal compliance" when talking about electronic invoicing. Although they are linked, they should not be mixed or combined. This is because legal compliance focuses on how electronic invoices should be processed in a given country while tax compliance is about complying with tax laws and regulations by paying the correct amount in a timely manner.
Legal compliance: the global perspective
As mentioned previously, the e-invoicing landscape is not harmonised across the globe. This is true of the technical aspects of electronic invoicing (i.e. e-invoicing formats) as well as the legal requirements.

We have already mentioned the significant difference between the Latin American and European approaches. The former uses the clearance approach and the latter generally uses the post-audit approach. The table below shows the main differences between these two models:

What is interesting is that more and more countries are adopting the Latin American/clearance model or something that resembles it. This was the case, for example, in Turkey, which adopted e-invoicing in 2013, and Italy, which implemented mandatory e-invoicing in 2019.

Moving from the post-audit model towards the clearance model is a general trend around the world. Ever more countries are adopting this model as tax authorities want to keep track of all transactions in real-time in order to control tax collection and ensure they can respond appropriately in the event that illegal entries are made in tax reports. The benefits for government entities are, therefore, quite obvious - they can significantly reduce fraud and increase tax collection with ease.

India is an example of a country which is adopting the clearance model

The introduction of obligatory e-invoicing in India has taken place over a few stages. First, it was introduced on a voluntary basis in January 2020. Starting 1 October 2020, it will become fully mandatory for companies with an annual turnover above INR 500 Crore (approx. EUR 65 million).

All companies with headquarters or branches on Indian territory will have to create e-invoices using their own systems and send them electronically to the Indian Registration Portal in JSON format for validation. All invoices get an invoice reference number (IRN) and QR code from which all invoice details can be read. If this process is successful, invoices with digital signatures are then sent to the GST system. The company will then receive proof that the invoice has been registered and the approved invoice will be available for the seller and the buyer on the GST portal.

Other examples of countries implementing the clearance model include:

Egypt - mandatory B2B e-invoicing as of 15 Nov 2020 for selected companies (pilot phase)

Vietnam - mandatory B2B e-invoicing as of Nov 2020 (the deadline is likely to be postponed until 2022)

Summary

The regulatory landscape is fragmented. Some countries mandate the use of e-invoices, while others let organisations choose how they want to invoice. The result is regulatory confusion about legal compliance for global businesses. Even among those countries that have embraced e-invoicing, there is often a muddled picture: some use EDI to exchange data, while other countries focus on using e-signatures. E-invoices must be archived and stored for a certain amount of time, but again the length of time varies depending on local regulations. Unless a business is familiar with the regulations of every place in which it operates, it risks running into problems without expert support.

Understanding local regulations is one of the key success factors of e-invoicing projects. One of the biggest issues for businesses is ensuring legal compliance when invoicing projects globally, as each country is different. As a result of this unharmonised and very complex landscape, companies that operate on a global scale quite often incur significant IT costs while setting up to meet local requirements.

Specialised companies such as Comarch can help companies/clients navigate this complex world and overcome the challenges of legal compliance for electronic invoicing. Such experts can help organisations understand local regulations and, more importantly, assist in the deployment of global e-invoicing projects.

It is worth underlining that, by implementing a modern e-invoicing solution, companies can benefit from moving away from paper-based documents; optimising their processes and driving business performance thanks to the modern features of these systems (such as AI/ML-driven data processing, analytics, and features designed to help facilitate the onboarding process). While e-invoicing is not new, what is new is e-invoicing enhanced by modern technology. Companies should not wait for a government mandate to modernise their processes. Instead, they should explore implementing AI/ML-driven invoicing in order to immediately start enjoying all the benefits automation has to offer.

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What compliance means for electronic invoicing - The Global Treasurer

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Although the idea of electronic invoicing is nothing new, implementation of this technology has only been happening relatively recently. This is because electronic invoicing was adopted several years ago in many countries such as those in the Nordics and Latin America. In the Nordics, e-invoicing was introduced to optimise business processes and reduce operating costs, [...]

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Proponi problemi matematici che richiedono di calcolare totali, IVA, e sconti partendo da fatture esemplificative. Questo aiuta a comprendere l'aspetto numerico delle fatture.

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Racconta la storia e l'evoluzione della fattura nel tempo, dall'antichità a oggi, per mostrare come questo strumento abbia seguito l'evoluzione dell'economia e del commercio.

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Prepara un quiz sulla fattura con domande che coprono definizioni, componenti, e normative. È un modo divertente e coinvolgente per verificare la comprensione degli studenti.

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Test Your Knowledge About Billing And Invoice! Trivia Quiz

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Are you looking for a way to test your knowledge about billing and invoicing? There are different types of invoices that can be given out, and they are differentiated by checking the contents. A wrong bill can lead to a lot of misstatements. The quiz below will test your understanding of different invoices.

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Dibattito su Argomenti Relativi alle Fatture

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Dibattito su Argomenti Relativi alle Fatture

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Organizza un dibattito in classe su temi come l'importanza delle fatture elettroniche vs cartacee, o su come le fatture influenzano le relazioni cliente-fornitore.

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Fornisci agli studenti una guida dettagliata sull'utilizzo e i benefici delle fatture elettroniche, evidenziando le differenze e i vantaggi rispetto alle fatture cartacee.

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The electronic invoice, commonly known as an e-invoice, is gaining increasing importance internationally for its role in business transactions. There are numerous different reasons for this, such as changes in legal requirements in the B2G and B2B sectors, a simplification of tax requirements, increased transparency, and the growing optimisation and digitalisation of invoicing processes.

In this article, we'll take a look at the development and functionality of an e-invoice, as well as the challenges and benefits of e-invoicing for companies.

Definition of an electronic invoice

So, what is e-invoicing? Let's start with the definition of the electronic invoice according to the EU Directive ( Directive 2014/55/EU of the European Parliament and Council from the 16th of April 2014 on electronic invoicing for public contracts), which states that invoice recipients in public tenders are obliged to accept electronic invoices.

Definition of an e-invoice: an "electronic invoice" is an invoice issued, transmitted, and received in a structured electronic format that enables it to be automatically and electronically processed;

This EU Directive is solely concerned with organisations which provide services for public procurement and issue invoices as part of these projects or undertakings. The invoice recipients, who in this case are public companies, are obliged to accept electronic invoices. According to the same EU Directive, there is no obligation for the invoicing party to issue electronic invoices, however individual states are free to tighten up these regulations when specific scenarios call for it. We've provided a comprehensive summary about this and the situation in Austria in our article, "EU Directive adopted for electronic invoicing in public procurement."

While the structuring of data records through e-invoicing sits at the heart of the EU Directive and provides for further central elements that an e-invoice should contain, the situation from a tax point of view looks somewhat different. In regard to tax law requirements, there are country-specific variations which must be observed in order for companies to be legally compliant when using e-invoices for business transactions.

From a tax law perspective, the implementation of e-invoices is not a specifically technical implementation or indeed tied to a specific format; rather what is important is that a correct invoice is created from which input tax (for example, VAT) can be deducted.

The following are, among others, the required criteria:

Authenticity of origin, relating to the certainty of the service provider's identity and the identity of the invoice issuer.

Integrity of the content

Legibility - readable by humans

We will return to these points a little later in relation to the requirements for e-invoicing. As is already evident from the definition of an e-invoice, there are numerous different criteria that need to be complied with due to different legal requirements. Because of this, companies need to consider a range of legal principles, as well as country-specific regulations, in order to be fully compliant when using e-invoices.

An introduction to e-invoicing

The beginning: paper invoices

Even today, many invoices are still sent as paper invoices. This is a questionable format to use due to its consumption of valuable resources and the costs incurred by both sender and receiver. Not only are there additional postage costs involved, processing invoices manually also brings about other costs, such as personnel and infrastructure expenses, which make the overall process considerably more expensive.

One step further: PDF invoices

After the paper invoice, comes the PDF invoice. PDF invoices have become increasingly popular since the discontinuation of the formerly mandatory electronic signature. This change means that PDF invoices can now be sent via e-mail or made available for download. Although in comparison to paper invoices, PDF invoices reduce the effort for the sender, due to the change in media, they do not significantly reduce the effort for the receiver. This is because PDF invoices can only be transferred to the recipient's respective ERP/FIBU system manually or by using copy-paste, as the PDF format itself is unsuited to recreating machine-processable data. Formats which are better suited to this are XML and EDIFACT.

The e-invoice

Let's look more closely at e-invoices and the significant changes that adopting this format brings about for those who use it.
What is an e-invoice in essence and what makes it different from the paper and PDF invoices which came before it?
In contrast to paper or PDF invoices, the e-invoice doesn't require any manual input from users and instead enables a fully automated approach; e-invoices allow organisations to transfer invoicing information electronically, receive it automatically, and to have that information processed within the recipient's own system.

Unlike other types of invoices, the e-invoice presents its contents in a structured and machine-processable format which enables automated processing. During sending, the e-invoice generates a machine-processable format which is sent directly to the IT system of the receiver. This occurs without any manual intervention from the receiver and from this point the invoice is ready to be processed further.

Comparison of invoicing methods

Using e-invoices / EDI invoices - challenges and requirements
Challenges in cross-border trading
Due to the country-specific formats and protocols which exist in relation to e-invoicing, there is a need for know-how and flexibility in cross-border trading, in particular relating to e-invoicing implementation. For many organisations, meeting the respective requirements needed to trade across borders can present something of a hurdle. It's therefore important to evaluate if these challenges can be dealt with in-house, or whether it's worth bringing in an external service provider with the necessary know-how to ensure a successful outcome.

In addition, the ViDA, issued by the European Commission, poses further cross-border trading challenges for companies.
VAT in the Digital Age (ViDA)
On December the 8th, 2022, the European Commission proposed a series of measures as part of ViDA (VAT in the Digital Age) to both modernise the value-added tax (VAT) system and make it more resilient against fraud. These measures were introduced in response to the loss of €93 billion in VAT in the EU in 2020. It is estimated that around a quarter of these losses can be attributed to VAT fraud in inter-community trade.

The European Commission has launched the "VAT in the Digital Age" initiative to improve the taxation of cross-border services and goods and adapt it to the challenges of the digital economy, in doing so closing loopholes and simplifying business procedures. The aim of the initiative is to ensure that businesses, in particular online retailers, make the correct VAT payments.

The following is an outline of the three main changes resulting from the ViDA:

A new, real-time digital reporting system based on e-invoicing is to be introduced in 2028. In other words, e-invoicing is to become mandatory for all cross-border trading as of 2028.

Updated regulations regarding VAT for the platform economy. Platforms for arranging passenger transport and short-term accommodation will be responsible for paying VAT to the tax authority, unless this is done by platform users themselves.

Building on the existing "VAT One-Stop-Shop" model for online shopping businesses, VAT payments will be simplified for cross-border trade. Businesses will only need to register once for VAT purposes and will be able to fulfil all their VAT obligations through an online portal in a single language. This means that it will be sufficient for businesses to perform just one VAT registration when selling to consumers across the EU.

ViDA and electronic invoicing
ViDA aims to move towards real-time digital reporting based on electronic invoicing for companies that trade across EU borders. Key advantages arising from this include the reduction of administrative and compliance costs.

Compliance with the EU format is also addressed here. In cases where national e-registration systems are in use, they must support the EU format, which for electronic e-invoicing is EN16931. Business owners will need to bear in mind that the start of mandatory e-invoicing for cross-border trade has been set for 2028.

More information on ViDA (VAT in the Digital Age) can be found on the European Commission's website under Taxation - Value added tax (VAT).
Ensuring the integrity of the invoice
As with previous invoicing formats, e-invoices are considered complete and unimpaired if the contents of the invoice have not been tampered with or altered in any way. However, this does not automatically mean that the invoice which has been issued contains the correct content.
Authenticity of the origin of an invoice
If the identity of the service provider or the invoice issuer can be guaranteed then the invoice fulfils the requirement for authenticity of origin. Authenticity can also be guaranteed through traceability.
Readability
The contents of each invoice should be fully legible and comprehensible. With e-invoicing, this can be facilitated through the use of the standardised messaging format.

Companies can choose to use one of a number of procedures to reliably meet the above criteria. However, as well as these requirements, there are, for example in Austria, the following additional e-invoice content requirements, which should also be taken into account:

Name and address of the supplying company, or the company performing a specific service

Name and address of the invoice recipient

Quantity as well as description of the object of the invoice

Date or time frame of services performed

Invoice amount and tax rate

Tax amount

Date of issue

Serial number

VAT identification number (for invoices with an invoice amount of more than €10,000, the VAT identification number of the invoice recipient must be indicated)

In addition, depending on the type of enterprise, commercial law regulations also need to be observed:

Legal status

Registered office

Company registration number

Company accounts registrar

More information on this can be found in our blog article on the requirements of correct invoicing in Austria.

Furthermore, in Austria, additional content (such as the supplier number, order reference, etc.) must also be included, for example, when submitting an e-invoice to the federal government.
Archiving/Retention
It's important to comply with retention periods for e-invoices. This applies above all to the tax office, which checks whether, for example, taxes have been paid correctly in Austria according to the Federal Tax Code. If the e-invoice has also been converted into another format, it must be clear from the retained file that no changes have been made to the document. For these reasons, it's recommended to keep hold of both the original file and the converted file when possible.

Implementation of e-invoices

To ensure successful e-invoice processing and implementation, there are a number of additional aspects that need to be considered. Firstly, companies need to put in place workflows and systems for the creation and processing of e-invoices. Secondly, clarification regarding how e-invoices should be sent and received is needed. This clarification should pay close attention to country-specific regulations.

In addition to taking into account these requirements, there are also specific elements that the e-invoice itself must contain. The standard that specifies this was developed by the European Committee for Standardisation (CEN): EN 16931. Although this documentation provides useful recommendations for successful e-invoicing implementation, it only provides the fundamentals; each individual member state provides its own list of requirements, known as Core Invoice Usage Specifications (CIUS) to assist in the smooth implementation of e-invoices for businesses.

E-invoice standards and formatting

As we've seen, the CIUS only provides a basis for e-invoice implementation. Because of this, various versions of these have developed which has led to different e-invoice formats in different countries. This means that electronic invoicing can fall under different standards or specifications. In Austria, for example, the CIUS-AT-NAT was developed, while Germany has the XRechnung.
What exactly is regulated under EN 16931?
EN 16931 regulates core elements of electronic invoices, the requirements for which are syntax-neutral, i.e. prepared using plain or neutral language. However, the CEN does provide a list of permissible syntaxes (XML schemas) and we'll provide concrete examples of those relating to the XRechnung in a later section of this article. What this regulation means for both sender and recipient is that for the e-invoice to be sent and received correctly both parties must be able to process the formats used.

How to send an e-invoice (using Germany as an example)

Different country requirements must also be taken into account when sending an e-invoice. In Germany, for example, there are two invoice receipt platforms (ZRE and OZG-RE) through which e-invoices can be transmitted to primary and secondary federal administration departments. For correct transmission, the sender must first determine which of these two platforms to use to send the e-invoice.

Various options can be used for the transmission of the e-invoice, with the type of transmission specified by each authority.

E-mail & De-Mail (a German e-government communications service) with XML attachments

Web entry

Upload via an online form

Fully automatic via Peppol

When invoices need to be sent frequently to federal government departments, it makes sense to use a fully automated transmission option via the Peppol protocol, which is supported by all authorities in Germany. In order to be able to transmit e-invoices via Peppol, a business will need a Peppol access point which can effectively communicate with the ERP system.

If the corresponding ERP system is already available in the company, it is worthwhile to convert an invoice in the respective ERP system into the necessary e-invoice format (e.g. XRechnung) automatically in order to transmit it immediately. To make this possible, there are fully automatic EDI solutions for the various ERP systems that can handle this conversion process. Through standardised import and export interfaces, the EDI systems can be integrated with the respective ERP system and therefore able to manage all electronic invoicing automatically.

When choosing the protocol, it is again important to consider which are prescribed by the country's legislator.

How does e-invoicing work (using the example of XRechnung)?

Using XRechnung as an example, let's now take a look at how e-invoicing works in practice.

As a mandatory e-invoicing standard in Germany, XRechnung affects all public institutions and authorities in Germany, as well as any companies that issue invoices to public administrators as clients. Suppliers, for example, must be able to create and send XRechnung invoices, while the authorities must be able to receive and process them.

Necessary steps:

1. Clarify whether the company is legally required to create or receive the XRechnung (this varies from state to state).

2. If so, implement the necessary e-invoicing standard in the company:

1. Question current invoicing processes. How are outgoing and incoming invoices currently created and processed?

2. If an ERP system is already in place, can it create or process electronic invoices?

Regarding the technical transfer of the XRechnung, according to the applicable standard, it must be transmittable or processed in one of the following two syntaxes:

a.) Universal Business Language (UBL)

b.) UN/CEFACT Cross Industry Invoice (CII)
Outgoing invoice - creating the XRechnung:
The relevant ERP system must create the invoice documents in the UBL or UN/CEFACT CII format. If this is not possible, the invoice must be converted to the required format. It is important that the conversion is automated and that the appropriate fields such as item description, identification numbers, units of measure, partner identification, etc. are maintained and can be converted accordingly. In addition, it is also essential that a receipt ID (called Routing ID in the XRechnung domain) is applied. Otherwise, the delivery of the document is at risk.
Incoming invoice - processing the XRechnung:
Before looking at importing an invoice via XRechnung, it is important to look at the workflow for approving and receiving invoices and to assess how well structured it is.The goal here is to convert XRechnung into a format that can be processed by the ERP system and to integrate the process seamlessly into that system. In addition to the format, the transmission channel (protocol) which receives the documents also plays an important role.

The various transmission options and the significance of the Peppol protocol are examined in detail in our white paper "Praxisleitfaden XRechnung und Peppol" (in German).

Verification of electronic invoices

As a general rule, companies should not send electronic invoices without prior verification. However, due to various legal regulations, there are differences in the criteria that need to be observed for successful invoice delivery. As mentioned above, most companies use an ERP system to map and automate processes. These systems can also export invoices in certain formats. However, these export formats are usually unable to meet the requirements for electronic invoices, making it necessary to convert or file them accordingly. Ideally, these conversions happen automatically, but this does not mean that the accuracy of the converted document is guaranteed. Various sources of error, for example, during input or directly during conversion, can lead to errors that need to be identified at an earlier stage. This is precisely where the verification of the e-invoice comes into play, so that these errors can be corrected earlier, long before the invoice is transmitted.

Verification can be performed in-house or by an external service provider. If a service provider is commissioned, it ensures that the e-invoice is transmitted to the relevant authority in accordance with the required standard.

Have you discovered our free online tool for validating Peppol and XML documents yet? It allows users to validate your documents according to EN 16931 (e.g. XRechnung), EHF, OIOUBL, A-NZ PEPPOL BIS3, CII Cross Industry Invoice, OpenPEPPOL formats, various UBL types, and many more.

Benefits of e-invoicing/EDI invoices

The use of electronic invoicing results in a number of advantages over traditional invoicing, although those benefits may vary slightly depending on several factors, such as the use of the transmission method. It should be noted that by cooperating with an external e-invoicing specialist, businesses can benefit from further advantages, depending on the specific services offered by the specialist in question.
Cost savings and efficiency gains in sending and receiving
Compared to sending and receiving paper invoices, electronic invoicing eliminates all costs associated with paper invoicing. The elimination of the manual paper process and automated invoicing process in the corresponding ERP/FIBU system also frees up the human resources involved in this workflow.
Reduction of material costs
The costs associated with paper, printers, postage, and more, are no longer a consideration.
Faster payment processes due to faster turnaround times
In contrast to paper invoicing, the time between sending and receiving an electronic invoice is significantly reduced. Once sent, the invoice reaches the recipient immediately. This significantly increases the probability of timely payments.
Minimising sources of error
By eliminating many manual processes thanks to automation, sources of error are significantly reduced.
Simplification of archiving
Archiving, which also plays an important role in invoicing due to the various retention periods required by law, is also simplified by e-invoicing. There is no need for a suitable room to store the paper invoices, nor is there any risk of invoices being lost in a fire. When invoices are archived digitally, they can be kept in electronic form and backups can be created.

Other advantages of using an external service provider in the context of e-invoicing include the following:
Technical compliance of e-invoices
External EDI service providers like ecosio ensure that e-invoices are fully compliant with e-invoicing requirements.
Cost savings through efficient and seamless automation
If an EDI service provider is contracted, then the automation of the invoicing process and the minimisation of manual processes is guaranteed, resulting in significant cost savings.
Flexible, scalable and future-proof
As experts in the field of electronic invoicing, EDI service providers make it possible to react quickly to changes in legal requirements, to scale invoicing processes if necessary, and make them future-proof.
User-friendliness
If the electronic invoicing process is integrated automatically into a company's ERP system by the service provider, this enables companies to continue to work with familiar interfaces.
Zero hassle
Service providers such as ecosio further reduce complexity by enabling all invoicing processes to be handled via a single connection to the cloud. This means, regardless of the particular invoicing format or protocol, the stress and worry is taken out of the transmission and receipt of invoices.

The challenges of e-invoicing

E-invoicing, with its country-specific legal requirements and characteristics, not only poses challenges for companies when invoicing internationally, it also presents numerous hurdles when it comes to its technical implementation. Addressing this second challenge in particular will be of paramount importance for companies as having the correct technical integration is a necessary prerequisite for taking advantage of the many benefits e-invoices can bring about.

What this often means is that the switch to EDI invoices may initially involve increased costs to ensure its correct integration into a company's system. However, over the long term these costs will turn into savings thanks to automation.

Getting the technical implementation right is an important first step in the successful implementation of electronic invoicing and companies need to be prepared to continuously adapt to both technical and legal requirements. This can be particularly challenging for internal IT departments. Depending on the availability of resources and internal expertise, company leaders must decide whether the e-invoicing requirements can be handled internally or whether an external service provider is actually the better choice.

If a company does choose to enlist the help of an external service provider, it's important for them to consider how the necessary conversion will take place and which services are/aren't included in the package they choose. For this reason, when choosing a suitable EDI service provider, it is crucial to take a close look at the services offered in order to successfully bring about the above-mentioned benefits of e-invoicing.

Country requirements

As we've already seen, there are numerous country-specific e-invoicing regulations which are especially relevant to organisations which operate on an international scale. In the list below, you'll find some helpful articles that deal with how to implement and manage e-invoicing in different countries as well as related insights and an overview of that country's specific e-invoicing requirements.

Summary

In summary, electronic invoices, also known as EDI invoices, e-invoices, and e-bills, are playing an increasingly important role in business transactions and accounting. Since the development and introduction of the EU Directive 2014/55/EU of the European Parliament and Council, e-invoices have gained even greater importance. While these legislative changes present challenges for many companies, they also bring about a number of sustainable benefits when implemented and managed correctly.

For companies, taking an honest look at existing capabilities and resources will be crucial to the correct implementation of e-invoices. If the question of whether e-invoicing can be handled internally without any worries cannot be answered with an unequivocal "yes", it is worth consulting an external EDI service provider and expert in the field of electronic invoicing. This individual or team will not only take care of the complete automation of the invoicing process in conjunction with existing ERP systems, they will also know what to look out for in terms of different requirements and how to implement e-invoicing at the company in a manner that ensures long term sustainability.

If you are currently facing a similar decision, now is the time to get in touch. As a full-service provider in the field of electronic data exchange, at ecosio we are experts in electronic invoicing and its implementation. We are happy to advise you using our extensive knowledge and experience in the field.

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What is an E-invoice and How Does E-invoicing Work?

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Learn how e-invoices work and the many ways that e-invoicing can benefit your business in our comprehensive guide.