Six-Step Guide to Getting Ready for E-Invoicing

04.12.2024

Topic: E-Invoicing

Government initiatives that promote e-billing have been launched in numerous countries around the world in recent years. Some focus on incentives and awareness campaigns, while others rely on regulatory provisions. The “VAT in the Digital Age” (ViDA) initiative adopted by the EU in November 2024, for example, aims to modernize the existing VAT Directive and overcome transnational obstacles such as local VAT registration. At the same time, various EU states have already introduced their own regulations or are in the process of doing so.

Companies that still need to prepare for the imminent introduction of e-invoicing are well advised to do so in a structured manner.

This blog article shares insights into how you can best prepare yourself for the new legislation and illustrates why mandatory electronic invoices are not just a big burden – but also a great opportunity.

One way to implement the new technology is to create an infrastructure where invoices will be sent to recipients in a technical format (primarily XML) via e-network portals or directly via tax authorities. There, the VAT is directly registered for advance return upon sending the invoice (continuous transaction control model).

Our software solution supports this approach, which is why we advise our customers to implement their e-invoicing project based on the following 6-step procedure:

Step one: Preparation

Companies first need to assemble a project team that takes into account all specialist departments affected. In other words, all those involved in receiving and sending invoices, the IT department as well as experts in (tax) law.

In this first step, you should assess the legal requirements, the existing processes for receiving and sending invoices, the costs involved, and whether there is already a corresponding workflow solution for invoice processing in place. The degree of automation is also an important factor to be considered. This involves questions such as whether the current systems draw on state-of-the-art technology and whether third-party software can be used. Other items to be checked include the question of whether suppliers and customers can already send or receive e-invoices (accounts payable/receivable analysis).

Step two: What is the current situation?

This is where you analyze the status quo. Do the input and output processes offer room for improvement, and where can you save costs with e-billing? What potential savings can you tap into by moving input/output management applications to the cloud? Is a debtor/creditor strategy in place? Do you need to convince customers to accept e-invoices and agree with suppliers to submit their invoices in this format? Have any of them already fully converted their systems or does any of your customers/suppliers plan to do so? According to management and technology consultancy BearingPoint, an initial return on investment for the e-invoicing solution (estimated at less than six months) can already be achieved once all information is available.

Step three: Which software should you choose?

A list of requirements containing all analysis results and further project information helps to find and select the right software or software manufacturer for invoice dispatch, receipt and processing. It also contains information on which countries, portals and formats are required, which (ERP) systems need to be integrated, what the system architecture must look like and what specific business requirements apply. The provider’s country, format and network portfolio and how these are connected to systems are also relevant. Ultimately, an e-invoicing project should be a purely technical/legal initiative that provides a single new input/output channel.

Step four: Let’s start planning

Internal project marketing is required to ensure the success of the e-invoicing implementation project. After all, it entails a lot of changes that should not be underestimated. The project must be communicated internally, and further individual requirements must be identified. In this phase, the project team is expanded in a cross-functional manner. The project is then officially launched with a kick-off event that serves to define communication plans and responsibilities.

Step five: We implement the project

In close coordination with all internal departments involved, our newly introduced e-invoicing solution for inbound and outbound processes finally goes live.

The solution we offer our customers for these processes is called “xSuite electronic Document Network Adapter” (xSuite eDNA). It is operated entirely in the cloud. This makes long implementation times based on a capture process that has to be set up and trained obsolete. In principle, all you need to do is connect the cloud solution with your company’s ERP (SAP) system. The invoices will then primarily be routed via a network (the main solution currently used in Europe is Peppol) before they are sent to our xSuite eDNA invoicing platform. This platform turns the heterogeneous incoming documents into a standardized format, which the downstream incoming invoice workflow can handle directly and seamlessly.

Technically speaking, validation is no longer necessary, as the adapter also handles this. For accounts receivable transactions, eDNA takes care of “printing” outbound invoices by creating a legally valid invoice from the invoice data supplied. The adapter then sends these to the recipient via the preferred network (portals, tax authorities, and soon also by e-mail) and simultaneously returns them to the accounting department for archiving.

Step six: Solution go-live

This step involves analyzing the live system to determine whether additional software functions might be required to perform actions such as processing new e-invoice formats. This includes checking whether any relevant new product features are available. Ideally, problems are reported to the service provider without delay.

Conclusion

Companies must be prepared for the fact that e-invoicing will be indispensable in the future. IT and legal departments are faced with new, crucial tasks, so a structured and well-devised approach is the order of the day. One thing needs to be emphasized above all: You should focus on the opportunities that these innovations offer: securing business processes by optimizing workflows, minimizing effort, reducing costs and increasing quality.