Learn more about e-Invoicing

What exactly is e-Invoicing?

Electronic invoicing is the exchange of an electronic (not digital) invoice document between a supplier and a buyer. An electronic invoice (eInvoice) is an invoice that has been issued, transmitted and received in a structured data format which allows for its automatic and electronic processing, as defined in Directive 2014/55/EU.

A structured electronic invoice contains data from the supplier in a machine-readable format, that can be automatically imported into the buyer’s Account Payable (AP) system without requiring manual entering.

When comparing eInvoices to paper invoices it is useful to note that paper invoices have three characteristics that are so integrated that we typically do not notice that they can be separated.

Paper invoices

  • contain data details such as amounts, descriptions and quantities.
  • render that data in a visual format, on printed paper, that can be manually read.
  • have a physical form that allows them to be manually handled and exchanged.

How do they compare with normal invoices?

Digital images, PDF and other visual digital forms of invoices remove the physical element and allow the invoices to be handled and archived in a more efficient way than paper. These formats however still require the invoice to be manually viewed and their data to be manually read and entered into AP systems.

eInvoices only contain the data in a structured form and can be automatically imported into AP systems. They do not include a visual presentation of the invoice data although they can be temporarily rendered during processing or transposed into visual formats. For eInvoices, the visual format is secondary and the objective in automation is not to view the invoice, except in irregular cases.

A visualised, human-readable version of the invoice may be created for reading purposes and may flow within the structured message, but it is not considered part of the invoice itself.

e-Invoices are not

  • Unstructured invoice data issued in PDF or Word formats
  • Images of invoices such as JPG or TIFF.
  • Unstructured HTML invoices on a web page or in an email.
  • OCR (Scanned paper invoices)
  • Paper invoices sent, like images, via fax machines.

The Benefits of e-invoicing

European Commission has conducted a survey on various Member States to examine the Cost-Benefit Analysis of implementing electroning e-invocing.

The data collected from five countries shows that the introduction of eInvoices has contributed to operational savings of more than 50% in each case.

Moreover, the automation of the eInvoicing process can lead to savings of 97% as shows Finland’s experience. At the most extreme end, Lithuanian authorities estimate that the implementation of eInvoicing would lead to a reduction in the unit processing cost of up to 99%.

Average Processing cost of individual eInvoices and paper-based invoices

Source

European Commission
D05.01 eInvoicing Benefits’ Analysis - November 2019
Connecting Europe Facility Stakeholder Management Office

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How it's done?

Directive 2014/55/EU led to the definition of the European standard on eInvoicing (EN 16931). The Directive promotes the uptake of eInvoicing in public procurement.

A fundamental cornerstone in the implementation of e-invoicing was PEPPOL. PEPPOL is a set of artifacts and specifications enabling cross-border eProcurement. The use of PEPPOL is governed by a multi-lateral agreement structure which is owned and maintained by OpenPEPPOL.

In simple terms PEPPOL is a network of Access Points, that are used to exchange document, such as e-invoices, digitally between buyers and sellers. It enables organisations to interconnect with all partners within one system. These Access Points belong to certified PEPPOL Members, such as Boomertel, which enable organisations (such as companies, Government Agencies etc.) to utilise the infrastructure.