All over the world, especially in Latin American countries, governments are introducing new regulations to make e-invoicing mandatory. It’s happening not only in the public sector but also – or perhaps we should say ‘above all’ – in the private ones. However, it might be a challenge for companies to prepare for these changes.
In the statement presented by the European Commission in 2021, the tax gap was estimated to be around EUR 134 billion in the European Union alone. A huge amount of money was lost because there was no system that allowed government officials to identify tax inaccuracies efficiently. To patch the tax gap, more and more European governments want to follow in the footsteps of countries that have been using the clearance model for a long time (e.g. those in Latin America). After all, the first country to introduce mandatory e-invoicing was Chile, back in 2001. Its goal was to increase the government’s control over the supply chains and reduce the gap between the expected and actual revenue.
Italy, which adopted the clearance model in 2019, is a European pioneer in the area of e-invoicing. The Italian e-invoicing platform called Sistema di Interscambio (SDI) has been an inspiration for other countries like France and Poland that are about to join the e-invoicing revolution.
There is no doubt that the clearance model, considering how popular it has become in recent years, is now a trend that many others will follow to improve their document exchange processes.
The implementation of a new e-invoicing system, which includes making it work with specific standards (such as specific document structures) and registering documents a priori document in a given government platform, can be a cause of headache for many entrepreneurs. This is a particular challenge for organisations that operate globally – those that have subsidiaries in many different parts of the world or cooperate with foreign suppliers.
Overall, mandatory electronic invoicing is related to creating an invoicing in a specific format such as XML, as well as the process of generating tokens that helps confirm the taxpayer’s credibility. Regardless of the country, each government introduces a test phase first to allow companies to send e-invoices voluntarily, and then it moves to a mandatory phase, where one’s failure to comply with regulations ends with receiving a financial penalty. How can you avoid this type of situation?
No matter if you're a small or mid-size local company or a big international organisation, first you need to carry out an audit of your IT ecosystem. You must analyse all of your document exchange processes, as well as every party to/from whom you send/receive invoices. Those can be your customers, suppliers, and internal departments like sales, finance, etc. If you carry out the processes manually, going digital and moving towards electronic invoicing is the best way to reduce costs and improve business performance. And if you have an ERP system, check if there is any way to integrate it with the new e-invoicing platform (via API, SFTP/AS2 channel, or Excel ingestion).
When choosing a provider of an e-invoicing platform, pay attention to their experience in carrying out similar projects. It is best to work with a vendor that offers technologically advanced solutions and guarantees full compliance with the e-invoicing regulations introduced in every country where you and your partners run your business operations. The latter is especially important because you do not know when a given country will decide to switch to the clearance model.
Speaking of compliance with the law requirements, it is important that you check whether the offered solution can handle e-invoice formats or, if necessary, whether it can convert paper documents into digital formats. Plus, while choosing a vendor, remember to present your current processes as accurately as possible so that they can adapt the new platform to your company’s needs and expectations.
The highlight should be the test phase, in which not only the IT team should participate, but all the departments that are involved in processing payments. That is because all of them will have to face a new reality. It is worth setting your business goals and appropriate KPIs that will help you to assess whether the juice is worth the squeeze. A properly implemented solution should reduce costs per invoice, generate fewer errors and, ultimately, free up your resources and give you more time to focus on other parts of your business. When that happens, your company will be ready for the new regulations. Additionally, you can find more information about the recent and upcoming legal regulations on our website.
Joanna Dobrzyńska started her adventure at Comarch in the product department where she worked as an analyst. Afterward, she became a product manager for the Master Data Management solution. Currently, as a business solution manager, she has expanded the area of her expertise to include other solutions included in the portfolio of Comarch's data exchange suite (such as EDI and e-invoicing). She works directly with international clients, mainly focusing on the retail and consumer goods sector, where she provides advice on how to introduce digital transformation step by step. She also offers guidance in terms of understanding the true potential of technology for intelligent process automation and improved decision-making.
For the past 25 years, Comarch has been a global provider of advanced, software-defined technologies that help companies from all industries optimize their key business processes. The company’s vast portfolio includes systems and services for efficient data and document exchange such as Master Data Management, Electronic Data Interchange, Online Distribution, and e-Invoicing platform. Each of the products is fully compliant with the latest local regulations and allows enterprises to improve their business performance, gain a competitive advantage, and reduce operational costs. Comarch’s clients include top professionals from various sectors: retail (eg, METRO-NOM, Tesco, Carrefour) FMCG (eg BIC, Johnson & Johnson, L’Oréal, Unilever), pharma (eg GlaxoSmithKline, Sanofi) and many more.
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