Yes, Invoice Mandates Are Actually Good for Your Business

Ugh, yet another invoice mandate to comply with...Romania 2024, Spain 2025, Belgium 2026, EU ViDA…the list goes on! It is perceived as (and is) a headache for many companies I speak with.

The teams handling Accounts Payable (AP), Accounts Receivable (AR), and tax matters have to deal with multiple challenges just to send and receive invoices compliantly. While there are only a few overarching compliance models, each country adds its own flavor and requirements, creating a patchwork of rules for businesses to navigate. This means that companies have to juggle both technical and procedural adaptations for each country they operate in.

Countries tend to place a significant burden on businesses, expecting them to prepare without much warning and then promptly handle their invoicing within tight timeframes (ever tried sending an invoice within five days when half the office is out sick?). And let's not even get started on the penalties for non-compliance in countries that aim to underscore the seriousness of this effort.

Yet, despite these challenges, I find myself drawn to the topic of invoicing compliance. It's become somewhat of a passion of mine in my role as an e-invoicing expert. So, considering all the drawbacks, why exactly are invoice mandates still beneficial for businesses?

Let's look on the bright side

While some countries implement a clearance model (i.e. that the invoice must somehow reach a government portal) without a simultaneous e-invoicing mandate, I'll focus on the most common scenario where e-invoicing (structured data files, not PDFs) is also mandated. Here are three reasons why you, as a business, can actually look forward to e-invoicing mandates:

Efficiency Gains

A common question I receive from businesses is how many of their suppliers or buyers they can expect to reach using e-invoicing. The answer will depend a lot on the country and the industry, but it all becomes moot once there is an e-invoicing mandate: The answer then will be 100% reach (as long as mandated). For all domestic invoices, suppliers and buyers will be required to transmit their invoices through the portal, meaning you as a business no longer have to ask your business partner to ‘please use e-invoicing or at least PDF’. Also, the hassle of making sure your business can be reached (closed networks requiring registration are a thing of the past!) is removed, as it is everybody's responsibility to be connected to the government portal.

Since you now reach all of your suppliers and they are all sending you e-invoices, you'll have access to the full dataset with no need to work with data extraction from PDFs or paper invoices. This enables you to process your incoming invoices in a fully automatic way, where an invoice can go from receipt to ready for payment without a single manual touch needed. To add to the benefits with the mandated e-invoicing, your data is transferred almost instantaneously and with better quality, both of which mean a possibility of both shorter Days Payable Outstanding (DPO) and Days Sales Outstanding (DSO).

Control Advantages

Control advantages will come about through the improvement in data. For example, thanks to e-invoicing, you'll be able to get audit trails of every invoice starting as soon as it was received by the server. You'll be able to see any changes made when and by whom. As mentioned before, you'll also have access to more data and of better quality, meaning you can set up thorough processes within your AP/AR departments to make sure your invoices are processed correctly - no more relying on header data only or having to spend time on validating data compared to the invoice image.

Lastly, preventing fraud will be within your control to a greater extent. Your invoice sender will always be identified, not just from the invoice data itself but also from the server it originated from. Many countries also require a digital stamp on the invoice to ensure its authenticity. With the audit trail, you'll be safer from issues such as fake bank accounts and fake invoicing. Additionally, by centrally working with local mandates, you'll have the opportunity to ensure your processes are globally aligned. I often find that the legacy local processes I encounter among my customers are not as efficient as those implemented alongside e-invoicing.

Cost Savings

Concerning cost savings, e-invoicing comes with a lower direct transaction fee compared to both PDF and paper invoices. Adding to this, indirect costs are lowered within your AP process, as you no longer need to validate data, and both AR and AP departments can save money utilizing early payment discounts and avoiding late payment fees.

By utilizing a one-time integration for your invoices, you do not have to spend money on one-time integrations per country, but can instead use the same pipe to send and receive invoices - changing only the data per country and not the whole integration. Thanks to the increased data in near real-time, you will be able to get better spend control, improve your invoice-handling processes for both customer and supplier invoices, and get more work done without a need for increased staffing. Simply put, you can count on both direct and indirect cost savings when implementing e-invoicing.

I'm convinced e-invoicing mandates benefit businesses, are you?

In summary, you'll achieve 100% reach, transmit better data faster, and at a lower cost. Add to that the environmental benefit of reducing paper usage, and it's clear that e-invoicing mandates are a win for your business!

If you don't agree with me, let us convince you! Contact us to start working with the pioneers of e-invoicing, actively supporting you with invoice compliance. You can also download our infographic, 'The Power of Electronic Invoicing: Unveiling Its Advantages,' to explore the benefits of e-invoicing and transform your business today!

Principal Presales Consultant Gustav Gnosspelius is a seasoned e-invoicing expert, boasting over a decade of experience in the field. With a deep understanding of best practices, Gustav excels in helping businesses optimize their e-invoicing processes and invoicing compliance. As a Principal Presales Consultant within Basware's Solution Value Consulting team, Gustav leverages his expertise to provide invaluable insights and advice, consistently aiding numerous clients in streamlining their operations. His dedication to enhancing customer experiences and driving efficiency underscores his significance within Basware and its clientele.
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