E-invoice
Why the switch to electronic invoices makes sense …
E-invoice – They are the heart of the economy, the vital organ that keeps everything running: bills for goods or services. About 32 billion of these are launched in Germany every year. A large proportion of them still arrive by post to the recipient, usually a few days after dispatch. There are some costs involved. Apart from the amount of work involved, there are the material costs, especially for paper and printer ink. The thickest chunk, however, is the postage. All in all, the cost of a postal invoice can be over 9 euros. And the cost of managing documents is also falling. It is high time to switch to the electronic version, and not just for economic reasons. Ecological considerations also speak for the electronic way, for the sake of the environment and the climate. You can read here what you need to consider and how you can make the changeover.
Electronic invoices
Conceptuality according to Directive 204/55
In normal language, e-mail with invoices as PDF in the appendix as well as exclusively structured data formats are referred to as e-invoices. European Directive 204/55/EU draws clear limits to the concept. The Directive defines the term electronic invoice as follows: “An invoice shall be electronic when it is issued, transmitted and received in a structured electronic format, the format shall enable the automatic and electronic processing of the invoice.”
E-invoices do not float in a legal vacuum
The changeover of invoicing from tangible to intangible evidence shows that invoices have certain legal and fiscal characteristics. In the legal sense, an invoice is a document. From the tax office’s point of view, an invoice is a posting document.
Both characteristics are fulfilled by a paper-bound invoice almost by itself: their existence alone makes them both: the document and the booking document in equal measure – of course only if all formal requirements are met. In the case of electronic documents, certain conditions must also be met in order to give them the character of a document and a booking document.
This is how the changeover takes place
Identify the benefits of electronic invoices
An advantage in switching the positionof paper to bytes is the usually uncomplicated procedure. In many cases, existing business software can also be used to generate e-invoices, especially current versions of the program. And if you’ve created your invoices using spreadsheets in the easiest way, this would be the right time to switch to a modern billing system.
The next consideration is storage. As you know, accounting documents – including invoices – must be archived for ten years in order to be available to the tax office for audits over this period.
For material invoices, the storage place is the filing cabinet or the file rack. This can create a lot of space, which causes costs and effort.
The storage location for e-invoices is the computer. There are no space problems here – today’s storage media offers enough space for even the largest data set.
Data loss can go into the money
The statutory retention obligation for invoices applies equally to material and electronic documents. It is the responsibility of the taxpayer. This means that if invoices are lost or destroyed, the tax treatment of the Malheur is at the expense of the company, which must also avoid suspicion of having made black transactions.
Paper invoices can be lost, for example, due to fire or water damage. Replacing them involves a high degree of work and effort – if at all possible.
The digital counterpart to fire or water damage is the deletion of data, whether by mistake or due to damage to the storage medium. Unlike paper-based documents, electronic documents can be used to provide effective precautions – through backups.
Modern billing systems already include archiving functions that you can use for this purpose. Since invoices are of such fundamental importance for the good of the company, a multiple backup is recommended, for example on external drives and additionally in the cloud. Recovering lost data becomes a breeze.
Choosing the right format for E-invoice
If there is still an obstacle today that could speak against the introduction of e-invoices, then that could be due to the file format used. Anyone can read a paper invoice. An e-invoice can only be used by the recipient if he can handle the supplied file format.
This is the reason why you cannot impose e-invoices on your customers according to the current legal situation. If the recipient requires the invoice to be serviced in paper form, you must comply with it.
So it’s up to you to keep resistance to e-invoices as low as possible. As a rule, you enter open doors, because the bill recipient can also take advantage of numerous advantages in e-invoices, for example by transferring data-driven paperless into his enterprise software.
As mentioned above, the customer can use the supplied data format. You should therefore usea format that is widely used, such as the POPULAR ZUGFeRD in Germany. This is a hybrid system consisting of a PDF file and an XML file. Hybrid systems of this type allow the recipient to process the data in its own IT and to incorporate it into all accounting and statistical processes.
It is pleasing that e-invoices no longer have to contain an electronic signature since 2011. This makes automatic creation much easier. On the other hand, the correct form of invoicing is of crucial importance. Here it is advisable to have the contents of the invoice checked first by the tax advisor or lawyer. This is particularly important in the case of services subject to VAT: under certain conditions, an e-invoice may be valid in general business transactions, but in this form it is not suitable for the pre-tax return under paragraph 14 paragraph 3 UStG.
The formal requirements must therefore also be met for e-invoices in order to be able to use them like paper invoices. In Austria, for example, the e-invoice UStV regulates all relevant regulations.
Electronic invoice formats and standards
- Unstructured data formats: Invoicing in .pdf-, .jpg or .tif format
- Structured data formats: XML, EDI, XRechnung
- Hybrid data formats: PDF/A, ZUGFeRD
- Transmission channels: e-mail, DE-mail, e-mail or web download
E-invoices offer numerous advantages
Basically, there is nothing wrong with switching to e-invoicing – the advantages are obvious. Here are some of them:
Accelerated payment receipt
Paper bills are on the way for one or two days, but that’s not all. The issuing company usually also needs one to two days before the invoice even reaches the postal route.
The situation is not much different for the recipient: In many cases, one to two days elapse before the invoice has passed through the inbox and is ready to be paid in the accounting department.
The duration of an invoice from invoicing to submission in the recipient’s accounting can therefore be up to six working days.
E-invoices are unbeatable in this respect. The shipping time from the moment of generation to the arrival in the customer’s accounting: a few seconds. The reason for this is that e-invoices are sent by e-mail. This is not only lightning fast, but carries the invoice exactly to the computer from which the payment is made, and absolutely free of postage.
Little to no effort
Writing an invoice can do a lot of work, especially for complex services or product statements. Use effective enterprise software, and the amount of work and time involved is zero. The invoice is created virtually on the side, for example when creating an order.
In many cases, not even order generation is required, i.e. when the customer provides for computerised order acceptance. All that remains to be done is the mouse click to submit the invoice – if this step is not also automated.
Integration with software solutions
Many company programs already include functions for program-based generation and sending of e-invoices, or can be equipped via add-ons. You take care of the invoicing and dunning process automatically, whereby you can individually design the forms used.
Enterprise programs work with master data. Information on customers, products, categories, prices, discounts, tax rates and a range of other information is kept in databases and retrieved to generate a new order. From this, the program generates all the documents required for the business transaction – from the delivery note to the invoice.
Since programs in this category are usually easy and intuitive to use, there is no need to commission external service providers for the production and dispatch of electronic invoices, especially for small and medium-sized enterprises. For example, SAP can be made fit for the e-invoicing age with appropriate add-ons.
Data search – a matter of seconds
Anyone who has ever been looking for an old paper invoice to process a customer request, for example, knows what effort it can have, especially if the invoice in question is dormant in the depths of the archive. Electronic invoices make searching an effortless task.
Since e-calculations are based on database structures, they can also be found with the means of querying the database – at lightning speed and without dust on the fingers. A particular advantage is the numerous search criteria.
For paper invoices in file folders, there is usually only one search criterion: the company name, ordered alphabetically. E-invoices, on the other hand, can be examined in many different ways: by date, amount, contained item numbers or receipt of payment, to name but a few examples.
This opens up completely new perspectives in customer communication and service quality. Telephone enquiries can usually be answered during the ongoing conversation. Phrases such as “Can I call you back?” are definitely a thing of the past.
Conclusion E-invoice
E-invoices allow fast and efficient invoicing and real-time shipping. This leads to massive cost savings and accelerated payment receipts. When generating e-invoices, you should rely on the use of a common format such as PDF/A, ZUGFeRD or XRechnung. If you issue invoices to public clients, XRechnung is mandatory as a standard for electronic invoicing in Germany. Even in this case, invoice recipients can still request that invoices be sent on paper. Modern enterprise software often already contains functions for creating e-invoices or can be equipped accordingly via add-ons.
