For both accounting firms and their clients, what’s not to like about e-invoicing? Removing paper-based filing from the equation promises a whole new level of efficiency, accuracy and ease in the billing process, which is otherwise enormously time-consuming, complex and error-prone. It makes life easier for accounting teams and their clients and business partners.
But it doesn’t necessarily make life any easier for a firm’s tax practitioners, because a lot of clients are conducting business in a global environment. Even for those that don’t consider themselves to be global companies, a growing number of firms are engaging in cross-border transactions that introduce a whole new level of complexity on the tax front. Did the client buy raw materials from Brazil? Sell some of their products to a Canadian client? If so, welcome to the world of compliance confusion.
What’s standing in the way
With a good understanding of the challenges ahead and the right technology in place, your firm can help clients find a smoother path to success and compliance through e-invoicing. Here are some of the most pressing challenges your clients may be facing that should be on your radar.
- Expanding markets, emerging mandates: Different countries’ unique e-invoicing requirements affect everything from data formats and submission protocols to compliance timelines, making it difficult for firms to stick to uniform processes. Government mandates originating in the EU are widely viewed as the driving force behind the adoption of e-invoicing, particularly the concept of VAT in the Digital Age (ViDA) for ensuring Value Added Tax (VAT) compliance. Plus, e-invoicing regulations are constantly being updated, and many jurisdictions require real-time or near-real-time invoice submission and validation, collectively referred to as Continuous Transaction Controls.
- Tangled technologies: While modern e-invoicing solutions are powerful, integrating them with legacy accounting or ERP systems can be complex and costly. These systems must seamlessly exchange invoices with clients, vendors and government portals while ensuring sensitive financial data remains secure.
- The data dilemma: Incorrect or incomplete invoicing data can lead to costly penalties. As companies expand, ensuring data accuracy becomes even more challenging, even with automation. Dedicated e-invoicing systems help mitigate these risks.
- Auditing readiness: E-invoices must be properly stored, easily accessible for audits, and compliant with varying regulations. Long-term archiving under complex retention laws is a challenge that many underestimate.
E-invoices: Not the same as digital invoices
Is a PDF an e-invoice? Ask your clients, and many will say that it is. But there’s a big difference between the two. Digital invoices like PDFs still require manual interventions—sending and receiving processes are partly automated and partly manual. Buyers must manually read and enter a digital invoice’s data into an accounts payable (AP) system.
E-invoices enable a more automated exchange. A structured e-invoice contains data from the supplier in a machine-readable format that can be automatically imported to the buyer’s AP system without manual intervention. This transmission does not include a visual representation of the invoice data. The result: Greater accuracy and efficiency than digital invoicing can provide.
Are clients ready for change?
You've likely seen the myth that new technology solves everything. In reality, using e-invoicing functionality within a current best-in-class solution is a game-changer—but only if clients adapt, too. After all, they’ve been operating in the same ways, with the same processes, for years. In an e-invoicing world, they need to be trained and ready to handle e-invoicing workflows and new compliance requirements. Some companies pursue e-invoicing in a piecemeal way, creating disconnects in workflows. Firms, along with e-invoicing solution providers, have an important role in guiding clients through this transition.
Your firm’s most important first move
The e-invoicing opportunity isn’t just daunting for clients—it’s a challenge for firms, too. In some ways, the stakes are higher for firms, because they need to serve as their clients’ expert guides. Many clients simply won’t make the move to e-invoicing without the firm’s encouragement and guidance.
Your first move should be to invest in a scalable, compliant e-invoicing technology. The right solution will have built-in capabilities that address challenges like those above, and many more. For example, Vertex E-Invoicing offers features like these right out of the box:
- Automated continuous transaction controls (CTC) that enable automatic e-invoice validation and real-time reporting to keep costs under control and achieve compliance around the world.
- Multi-country support, which automatically updates the solution as jurisdictional regulations change.
- Global network connectivity that makes it easy for clients and firms to connect to tax administrations and government platforms around the world.
- Data transmission that transforms client data into pre-defined formats for each mandate (such as Peppol BIS, XML, JSON, and SDI)
- Archiving and audit readiness capabilities that keep up to 15 years of approved e-invoices and related artifacts securely archived and accessible.
- E-invoicing and tax reporting through a single platform for managing multi-country VAT and GST (Goods and Services Tax) compliance, including e-invoicing, e-reporting and periodic reporting.
The solution itself is only part of the equation for firms looking to provide high-quality e-invoicing services to clients. The relationship with the provider is just as important—great solution providers offer regular training and updates for both clients and firm practitioners. They also help firms stay up to date with regulatory environments so that they can adapt quickly and guide clients accordingly.
These are some of the reasons CPA.com partners with Vertex, which provides a complete, deployment-ready e-invoicing solution that firms can trust when expanding their practices to offer these services. For more information about Vertex E-Invoicing and how this new capability can improve your SALT practice, visit Vertex.com/E-invoicing.
About the author
Jessica Clemons is the Senior Customer Success Manager at CPA.com, where she supports firms using Vertex Inc.'s sales tax automation solutions. Since 2019, she has helped firms streamline their compliance processes and adopt technologies that improve efficiency and accuracy. Jessica works closely with firms navigating digital transformation in tax.
