e-invoicing, short for electronic invoicing, is the electronic transfer of billing and payment information, via the Internet or other electronic means between the parties - businesses, the public sector, consumers - involved in commercial transactions.
Compared to paper invoices, e-Invoices may offer huge advantages for companies - they are said to be easier to process, they reach the customer faster and can be stored centrally at very low cost. A report predicts potential annual benefits of up to €40 billion across Europe in the business-to-business field alone.
Main benefits of electronic invoicing?
- Quicker retrieal of money from customers by reducing the time an invoice or payment is in the post;
- Reduced printing and postage costs;
- Processing is quicker and cheaper, as the information in electronic invoices can be fed directly into a company's payments and accounting systems
Lower storage costs
Main obstacles to the wider use of electronic invoicing
- e-Invoices are produced in a wide range of formats and according to many different standards. This hinders the smooth transfer of an e-invoice from one part to another and prevents the full benefits and cost savings of e-invoicing from being realised;
- Variation in national rules which govern the validity and acceptability of e-invoices in legal, financial and administrative terms. This makes their use in cross-border transactions within the EU difficult;
- Many potential users have concerns about the security of e-invoicing systems and the potential for misrepresentation in fraud.