on 22 Sep 2016 1:08 PM
Between the recent European directives and the implementation of the Macron Law in France, companies are now required to fully implement electronic invoicing systems by 2020. Over 17 billion invoices exchange hands in the EU every year and this change affects all types of businesses, regardless of the size or industry.
The implementation of a standardized procedure
Over the next four years government, public, and private companies are required to integrate new invoicing systems into their existing processes. These systems must adhere to specific invoicing requirements dictated by law. With an estimated €10 billion in VAT fraud in France alone, it is in the government’s best interest to demand implementation of a standardized procedure that will allow for legibility and authenticity, and a much more reliable audit trail.
A fully electronic procedure
It is important to keep in mind that the entire invoicing process must be electronic. A paper invoice that is then digitized, and delivered via email is still considered a paper invoice. Regulatory electronic invoicing systems must create, send, receive, and archive invoices according to all government specifications.
Strict compliance regulations
Compliance is a main concern and there are several ways to guarantee that an invoicing system is tax-compliant: by the use of EDI, or the use of advanced electronic signature and certificate. All systems must establish a transparent audit trail that guarantees authenticity, legibility, and integrity from invoice creation to archiving procedures. These regulations ensure that invoices cannot be modified or removed in the system and that they adhere to in-country archiving standards.
Integrating international guidelines
While there are standard guidelines to follow within the EU, every country has a different set of regulations (for example, in France one must retain invoices for ten years, whereas the norm in other countries is five). International companies should aim to look ahead and adopt a system that can integrate and adapt to all types of in-country specifics.
It is important to bring IT, business, and legal together to determine company-specific solutions that can be adapted and integrated with both clients and suppliers in mind. While the integration itself may seem somewhat daunting, the actual peace of mind that a standardized system will bring makes it very much worth it.