E-invoicing has been a hot topic for years, but it became particularly topical on 1 July 2019, when e-invoices became mandatory for the public sector. As a consequence, the use of e-invoices has increased significantly.
What is an e-invoice?
First, we should be clear about what constitutes an e-invoice. An invoice sent by e-mail is not an e-invoice, and a PDF invoice is not the same as an XML invoice, because the two formats offer different possibilities.
A PDF invoice is basically a paper invoice viewed on a computer screen, but an e-invoice moves from one information system to another, e.g. from one company’s business software to another company’s software or a private person’s internet bank.
All companies should use e-invoices
For companies whose partner is the public sector or the state, sending e-invoices is compulsory. Even though private companies have more liberty in managing invoice managing, the whole world is now moving towards e-invoicing, as this makes invoicing easier and reduces the amount of work required.
E-invoicing is intended for all companies – both smaller and very large companies can save time and reduce their workload when sending e-invoices. This is a universally appealing option: the easier and faster it is to send, receive and pay invoices, the more efficient the work, communication and cooperation between companies will be.
E-invoices make work effortless
The biggest benefit of sending e-invoices is that sending and receiving an invoice does not require separate work, as information systems do all this work by themselves. Companies also receive a real-time overview of their financial transactions. Because e-invoices do not require manual entering into different systems, the possibility of making data entry errors is significantly lower.
The sender of an e-invoice does not have to worry whether the invoice was dispatched and whether it arrived, because the movement of the invoice can be monitored in the system. Payment is made at a sweep, and the recipient of the invoice can enter into a fixed payment agreement. This means that the invoice will be automatically paid on the due date.
What does sending an e-invoice look like?
To send e-invoices you must sign an agreement with an e-invoice operator. There are several alternatives for this in Estonia, and the information systems of all operators are interconnected. This means that an e-invoice of one operator’s customer reaches the other operator’s customer. You may also choose whether you want to send an invoice as an e-invoice to the information system, to an e-mail address, or in the paper format to a mailbox.
For sending an e-invoice, first, an invoice must be created in the business software; the invoice then reaches the business software of another company via the operator, and the recipient of the invoice can send the invoice for payment with just a click. Business software providers are dedicated to continually improving user experience, so that sending and receiving e-invoices would be as easy and convenient as possible. The goal is also to enable a wide network of operators so that the customers can find the most suitable service provider.
Selection of operators
There are several operators in Estonia, including Omniva, Fitek, Envoice, Telema, etc. Standard Books business software developers have taken customer feedback into account: while, in 2015, there was only one operator, there are currently four to choose from. This allows the customers to choose the most suitable operator and the business software ensures the generation and delivery of e-invoices with each operator.
Configure and use
After selecting an operator and signing a contract, the business software must be configured to send and receive e-invoices. Standard Books is linked to an e-invoice operator with a unique activation key, and e-invoices can then start moving.
E-invoicing unquestionably simplifies the life of both entrepreneurs and accountants by reducing the amount of work and ensuring the smooth flow of invoices. This is especially evident for companies that send hundreds of invoices every day. Ultimately, it is very difficult to find a rational reason to postpone using e-invoices.
The biggest benefits of e-invoices
- E-invoices save working time that can be used more effectively
- E-invoices prevent human error
- E-invoices give the company an opportunity to receive an overview of their financial situation in real time
