Guide to E-Invoicing

Most businesses today use invoices in one form or another for things like billing customers for transactions, collecting tax on sales, and paying suppliers. Until recently, both paper and digital invoices needed to be created manually and sent through channels like email.

E-invoicing is changing the way invoices are created, shared and paid by removing the need for a human to input any data.

But what exactly is e-invoicing and how does it work? In this article, we’ll walk through the essentials of e-invoicing, including the benefits, how to set up e-invoices and how accounting software can take care of the hard work for you.

What is an e-invoice?

An e-invoice, or electronic invoice, is a digitally delivered invoice that is produced by invoicing software without the need for human intervention.

Unlike digital PDF or Word invoices, e-invoices don’t need to be manually created by using a template or invoice generator. Instead, they’re automatically generated by e-invoicing software, which means business owners don’t have to spend time creating and processing invoices.

The benefits of e-invoices

Some of the biggest benefits of e-invoicing include:

Automation

Because e-invoices are automatically generated, you don’t need to spend time manually creating and sending invoices each week or month. This can be a huge time-saver, particularly for business owners with a high volume of customers or orders that require separate invoices.

Faster payment

E-invoicing makes payment as easy as possible for customers. Many e-invoicing solutions include a ‘pay now’ option, which means the customer can pay their invoice with the click of a button. 

On top of this, e-invoices exchange invoice data directly from computer to computer. This means there’s no middleman involved in getting the invoice from biller to sender, speeding up the payment process.

Reduced risk of errors

To be legally enforceable and tax-compliant, an invoice must contain specific information such as:

• Contact information for both your business and your customer
• An itemised list of the products or services provided
• An invoice ID or invoice number
• Payment terms and due dates
• The total amount due, including any applicable tax

This is a lot to think about and needing a human to input all the necessary details creates the potential for errors.

With e-invoices, businesses can automatically exchange invoices between their accounting systems, removing the need for manual data and minimising the chance of errors.

Enhanced security

E-invoices are inherently more secure than paper or PDF invoices because they are sent directly from one accounting system to another, rather than through a separate channel like email. 

Although there isn’t yet a global standard for e-invoices, a variety of providers operate around the world. National Insurance-European Public Procurement Online (PEPPOL) is an international e-procurement framework that is the standard in Singapore, as well as Australia, New Zealand and several European countries. PEPPOL is a framework that standardises the way e-invoices are issued and received by businesses. In Singapore, the PEPPOL authority is the Infocomm Media Development Authority (IMDA).

According to the IMDA, the PEPPOL network “allows direct transmission of e-invoices from one finance system to another without human intervention, speeding up invoice processing which results in faster payment. This greatly reduces the time spent verifying invoices and chasing for payment.”

With PEPPOL, data is transferred through a network of approved service providers called 'access points'. This makes e-invoicing using the PEPPOL framework far more secure than invoicing via email or mail.

How to set up e-invoices

If you already send or receive invoices using accounting software, all you need to do is check with your software provider to make sure they enable e-invoices. If they do, follow their steps to get started. If they don’t, you can either integrate with a separate e-invoicing solution or switch to accounting software that is e-invoicing enabled. 

If you currently send or receive your business invoices manually, you’ll need to choose an accounting software provider that allows e-invoicing. You can also have a chat to your accountant or bookkeeper about how to get started.

Streamlining e-invoicing with QuickBooks

As more businesses and governments encourage the use of electronic invoices, it’s a good idea to get ahead of the curve and start taking advantage of e-invoices sooner rather than later. With benefits like time savings, faster payment, reduced risk of errors and greater security, it’s easy to see why e-invoicing is fast becoming the method of choice for businesses to get paid.

QuickBooks supports seamlessly sending and receiving e-invoices via a 3rd party solution that integrates QuickBooks Singapore with Peppol e-invoicing.. You also have the option to create custom, professional invoices directly in QuickBooks, set up custom payment schedules and track multiple invoices to get paid faster and streamline the way you receive money. 

Find out more about QuickBooks’ invoicing software, our app partners, and get a free 30-day trial.