Page tree

European Commission Digital

You are viewing an old version of this page. View the current version.

Compare with Current View Page History

« Previous Version 10 Next »

eInvoicing Documentation

What are the benefits?


Mass adoption of eInvoicing within the EU leads to significant economic benefits and increases European business competitiveness. Supported by European legislation, acceptance of eInvoices by governments makes it easier to do business with the public sector.

The benefits of replacing paper invoices with eInvoices can be reached in three main steps.

  1. replacing physical paper forms with a structured, machine-readable electronic form that allows invoices to be handled and archived more efficiently; 
  2. removing the manual work of entering the invoice information into an Access Point system, significantly reducing errors in data entry; 
  3. providing significant cost savings in printing, postage, intra-office routing and archiving, as well as human resources.

The adoption of eInvoicing in the public sector can make various contributions to economic well-being:

  • it contributes to public policy priorities such as public-sector deficit reduction, financial transparency and promotion of sustainable development.
  • it specifically makes a material contribution to public sector cost reduction and efficiency.
  • it provides benefits to private sector suppliers and create opportunities for the public sector to act as a catalyst for the wider adoption of digital processes in common with the private sector.

The invoice process

From its creation until it is archived, an invoice must go through a number of processes and steps. The procedures and the level of automation may differ significantly between entities, sectors and regions, yet eight universally valid steps can be identified. 

The overview below describes each step and explains how savings can be made by replacing a paper invoice with different types of digital invoices. In general, the digital invoices can be divided into two main categories, visual digital invoices (e.g. pdf, jpg) and structured data eInvoices (e.g. eInvoicing standard invoices). The seller can usually achieve most of his benefits by using invoices from either category but the most significant benefits for the buyer depend on the usage of structured-data eInvoices that can be automatically processed.
Invoices that comply with the European standard on eInvoicing must be in a structured data eInvoice format.

The Invoice process

1. The seller prepares the invoice

This step refers to the compiling of information such as man-hours, list of items, usage of services etc. necessary to issue an invoice. This process happens before the invoice itself is created and is not affected by the form of the invoice.

Source of savings  Any automation and improvement in preparing an invoice is unrelated to the form of the invoice.

Visual digital invoices  NO SAVINGS
Structured data eInvoice  NO SAVINGS


2. The seller issues the invoice

The invoice is created in the sellers sales system and exported into the relevant format, paper, pdf, HTML, structured XML.

Source of savings  Paper and printing costs and handling of mail.

Visual digital invoices  SAVINGS
Structured data eInvoice  SAVINGS


3. The seller sends the invoice

The invoice that has been created is sent to the buyer through a suitable procedure, i.e. physically, by email or through messaging platforms.

Source of savings  In most cases, there are savings in postal costs. These are replaced by electronic transmission costs, which tend to be significantly lower.

Visual digital invoices  SAVINGS
Structured data eInvoice  SAVINGS


4. The buyer receives the invoice

When an invoice is received by the buyer it needs to be correctly identified as an invoice and assigned to the correct internal process.

Source of savings  The manual handling is replaced with a semi or fully automated system. Visual digital invoices received by email usually require some manual sorting (although that can be reduced, e.g. by using dedicated mailboxes or OCR). The structure of the data in a structured eInvoice allows for full automation of the reception.

Visual digital invoices  LIMITED SAVINGS
Structured data eInvoice  SAVINGS


5. The buyer approves the invoice

The invoice is reviewed to verify that it matches the quantities and prices ordered and received.

Source of savings  The review process consists of comparing the invoice to existing information, such as orders, or to apply decision rules. The internal routing of a visual digital invoice can be improved by the use of document sharing systems (scanning solutions) while the use of structured eInvoice content enables automated invoice matching. Invoice automated approval frequently provides the buyer with significant benefits by freeing up employees' time, who tend to be on a managerial level.

Visual digital invoices  LIMITED SAVINGS
Structured data eInvoice  SAVINGS


6. The buyer books the invoice into accounts

The buyer enters the necessary information from the invoice into their accounting system(s) and assigns the relevant accounting keys.

Source of savings  Entering of information from visual digital invoices remains manual. Structured eInvoices enable automated information entry and automated assignment of accounting keys through references or rules. Automated entry of invoice information significantly reduces the risk of entry errors which often cause significant costs. This is usually a significant source of benefits for the buyer.

Visual digital invoices  NO SAVINGS
Structured data eInvoice  SAVINGS


7. The buyer schedules payment

The payment for the invoice is scheduled either according to contracted terms or based on payment instructions in the invoice.

Source of savings  When time-to-payment is based on the invoice content, as opposed to contractual terms, the structured eInvoice allows for automated entry of relevant information. This improves payment scheduling and avoids late payments.

Visual digital invoices  NO SAVINGS
Structured data eInvoice  SAVINGS


8. The buyer archives the invoice

The invoice is stored for later retrieval.

Source of savings  Both visual digital invoices and structured eInvoices significantly reduce archiving costs through both reduced handling and storage costs.

Visual digital invoices  SAVINGS
Structured data eInvoice  SAVINGS

List of key eInvoicing cost savings

The following list gives an overview of the type of cost that can be saved in different processing steps that are described above.

  1. Cost of paper
  2. Printing costs
  3. Mailing costs
  4. Manual handling when sending or receiving
  5. Review and approval of invoices
  6. Entry of data into ERP systems
  7. Accounting key assignment
  8. Balancing (reduced error in data entry)
  9. Archiving, handling and storage





Looking for help? Need more information?