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European E-Invoicing Guide for SMEs
3.2.3. LIMITED SELF-SERVICE CAPABILITY
In this scenario one trading partner (commonly the receiver) provides an Internet portal where the
sender can input or upload invoices into a template. This template is programmed to convert the
invoice data into an automated file in the format of the receiver’s ERP system. This creates an
automated process for the receiver while the sender may not have any e-Invoicing capability. The
downside for the sender is the manual re-keying or uploading of the data into the Internet form. The
potential risk, if an error occurs, is that the invoice produced on the sender’s ERP system may not
match that of the data keyed into the receiver’s portal.
Whether you outsource these activities or purchase software to carry them out internally, in all three
of the scenarios above, a software or service solution can generally be expanded to automate many
other types of transactions (i.e. orders, shipping advices, confirmations, payments or collections,
remittance advices, statements, etc.).
3.3.LEGAL REQUIREMENTS
When implementing an e-Invoicing solution, it is important to consider the legal and compliance
aspects described in Section 4 of the Guide.
Based on the Country Matrix (Figure 4.1), your business should start assessing the legal
requirements from a VAT perspective.
The implementation described in this section of the Guide represents a typical EDI solution (in line
with the Commission Recommendation 1994/820/EC relating to the legal aspects of EDI which
allows for the use of agreed standards such as EDI or XML-based standards), one of the three
options to comply with the requirements of the VAT Directive for authenticity of origin and integrity
of content.
From a VAT perspective, a compliant EDI solution does not require the use of Advanced (or
Qualified) electronic signatures. This requirement would conflict with the VAT Directive which
defines three alternative options for compliance.
3.4.COST / BENEFIT ANALYSIS
There are various methods of determining the cost of processing invoices manually. At a minimum,
the sender should consider the costs of printing paper, postage and handling, while the receiver
should consider the cost of approving / accepting the invoice, the data entry of the invoice details,
correcting errors, and filing of paper invoices. While many e-Invoicing software/solution providers
have online calculation tools to assist with this analysis, time and motion studies may also be carried
out to support the estimates.
It is important to note that some benefits are difficult to quantify – in particular the reduction in the
time spent handling queries, or related payment delays, in addition to the overall improvement in
supplier and customer relationships.
3.5.SELECTION OF A SOLUTION OR SERVICE PROVIDER
The solution or service provider that best fits your current and future plans should be carefully
selected. Many businesses that adopt e-Invoicing with one partner will generally decide to expand
their capability to other suppliers / customers or to automate additional business processes.
An e-Invoicing solution that is limited to one type of transaction, one standard, or the ability to
exchange with only one partner may serve an immediate business need but could be costly if it
cannot be upgraded to support further e-Business expansion.
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