Alex Baulf, Vice President of Global Tax at Avalara, recently discussed the benefits of e-invoicing with Fintech Magazine.

According to Baulf, "e-invoicing is a means for two business partners—a supplier and its buyer—to create and exchange structured, machine-readable data. Instead of creating, printing, and mailing actual paper documents or scanning them as PDFs, businesses may exchange an electronic invoice with their supplier's ERP systems that has exactly the same information as a typical paper invoice. This eliminates the need for human data entry, which reduces expenses and increases efficiency.

As governments over the world work to enhance tax law enforcement and VAT collection, e-invoicing is becoming more and more popular.

According to Baulf, governments have been searching for more effective ways to collect VAT and enforce tax regulations throughout the past three years. More and more countries are starting to require the use of e-invoicing for routine corporate operations in an effort to guarantee transparency and modernize indirect tax reporting and management.

Businesses are using e-invoicing more and more, even in areas where it is not yet required.But because e-invoicing lowers processing costs, firms are using it more and more—even in unmandated nations. The entire procedure is sped up by using a structured, digital invoice instead of paper forms. Additionally, it implies more effective handling and archiving of bills.

"Compared to PDF and paper processing, businesses can actually save up to 70% on material and printing, postage, and archiving costs," adds Baulf. E-invoicing is a desirable choice for businesses trying to simplify operations because of its obvious cost-saving advantages.

Beyond just saving money, e-invoicing has the following benefits for business operations: "The instantaneous information transfer provided by e-invoicing reduces processing delays; firms may anticipate receiving payments sooner, which will result in more efficient and productive operations.

"Manually entering data into systems for processing is not necessary with e-invoicing, sparing firms from laborious and sometimes costly human mistakes. Electronic invoices won't be lost in the mail or left sitting in someone's inbox forever. Businesses enjoy considerable savings in human resources and accounting accuracy when the information is in a digital format that is readable by systems. For commercial interactions, this decrease in differences is revolutionary.

The European Union and E-invoicing

As part of its "VAT in the Digital Age" (ViDA) project, the European Union is concentrating on e-invoicing with the goal of achieving uniformity across member states by 2028. E-invoicing is becoming more and more popular as governments across the globe work to enhance VAT collection and tax law enforcement. According to Baulf, governments have been searching for more effective ways to collect VAT and enforce tax regulations throughout the past three years. More and more countries are starting to require the use of e-invoicing for routine corporate operations in an effort to guarantee transparency and modernize indirect tax reporting and management.

Important Information

France: By September 2027, all domestic transactions utilizing formats like UBL, CII, or Factur-X will be subject to mandatory B2B e-invoicing in France.​

Belgium: With the exception of B2C transactions, Belgium will require B2B e-invoicing as of January 2026.​

Poland: Beginning in July 2024, Poland will require B2B e-invoicing via the National e-Invoicing System (KSeF).

Cybersecurity

Businesses today are very concerned about cybersecurity, and e-invoicing offers a way around this problem.

According to Baulf, "Today's organizations are really afraid of the cybersecurity dangers they confront. E-invoicing's cornerstones—encrypted file transmission, digital signatures, and secure networks—enhance security and guarantee data integrity and authenticity, making it the safest method of exchanging financial and business-related information. Safeguarding sensitive financial data requires this extra security layer.

International trade is being facilitated and domestic businesses are being transformed via e-invoicing. E-invoicing is revolutionizing how companies operate both locally and internationally, according to Baulf. This means that for VAT reporting, live-reporting of transactional VAT data will take the place of the "periodical summary VAT information push," which is the periodic submission of VAT information to authorities.

Tax authorities have the ability to participate in the invoicing process and obtain the data directly through a procedure known as "real-time VAT information pull." Larger-scale, this makes cross-border trade less complicated as companies may adhere to local tax and regulatory requirements, avoiding fraud and preserving the integrity of the VAT system.

"E-invoicing guarantees quicker payments and time efficiency, freeing up corporate executives to concentrate on important tasks like making strategic decisions that propel the company ahead. At Avalara, we think that next-generation e-invoicing will enable "anyone, anywhere, anytime" global trade, ease cross-border trade, and give businesses operating in many jurisdictions interoperability across processes and data. The function and strategic significance of e-invoices will only increase as companies want to engage with a larger spectrum of trading partners.