E-invoicing is rapidly becoming the preferred method for businesses to send and receive invoices. This digital process enables companies to exchange, process, and store invoices electronically, making the order to cash and purchase to pay processes faster, more efficient, and cost-effective. The adoption of e-invoicing has increased significantly in recent years due to its benefits and the global shift towards digital transformation. In this article, we will focus on compliance at a Global level and from a European perspective.

Global Adoption of E-Invoicing

Across the globe, many countries are adopting electronic as primary method of invoicing. According to a report by Billentis, the global e-invoicing market is expected to grow at a compound annual growth rate (CAGR) of 10% between 2020 and 2025, reaching $20.4 billion by 2025.

Several countries have implemented mandates to promote the adoption as an example, Latin America, countries such as Brazil, Mexico, and Chile have implemented e-invoicing mandates to increase tax compliance and reduce tax fraud. In Europe, the European Union has set a goal of making e-invoicing predominant by 2025, and in some countries for B2B is already mandatory such as in Italy.

E-invoicing Compliance in Europe

In Europe, e-invoicing compliance is governed by the European Directive 2014/55/EU, which requires all public sector entities to accept electronic invoices that comply with the European standard. This directive aims to promote the use of e-invoicing, reduce administrative burdens, and enhance cross-border trade. The European standard, which is called the European Standard on e-Invoicing (EN), defines a common format and structure ensuring interoperability between different systems and enabling seamless cross-border transactions.

The European Union (EU) has set a goal of making e-invoicing the method for invoicing by 2025. This is expected to save businesses billions of euros in costs and reduce the environmental impact of paper-based invoicing. To achieve this goal, the EU is promoting the adoption of e-invoicing across member states and encouraging the development of e-invoicing solutions that are user-friendly, secure, and interoperable. Countries such as France, Poland or Spain have already announced B2B e-invoicing regulations to come in to place in the short term.

Moreover, with the implementation of ViDA (VAT in the Digital Age) regulations the impact of e-invoicing in the European Union (EU) is even bigger as businesses are now required to comply with the new rules and adopt certified electronic invoicing systems. ViDA has also facilitated cross-border e-commerce transactions within the EU, making it easier for businesses to sell goods and services across borders.

Conclusions

E-invoicing is expected to become the norm across the globe in the coming years, driven by the increasing need for efficiency, cost savings, and environmental sustainability. The global pandemic has further accelerated the adoption of e-invoicing, as businesses were forced to move to digital methods of invoicing to reduce physical contact.

The future of e-invoicing is bright, with advancements in technology such as artificial intelligence, machine learning, and blockchain expected to further streamline the invoicing process. These advancements will enable faster processing, higher accuracy, and improved security, further enhancing the benefits of e-invoicing.

These initiatives are transforming the way businesses send and receive invoices, offering significant cost savings, increased efficiency, and environmental sustainability. The adoption of e-invoicing is expected to continue to grow across the globe, driven by advancements in technology and the need for efficiency and cost savings. Businesses that embrace e-invoicing will enjoy numerous benefits, including faster payments, improved accuracy, and increased efficiency.

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