Accounting & Finance
6 Ways To Comply With Global E-Invoicing
First of all, it’s important to know what e-invoicing is. This is just a shorthand way of denoting an electronic invoice. E-invoicing is convenient because it reduces waste and speeds up the process of billing clients and partners. Global e-invoicing takes that practice and puts it on a worldwide scale.
Understanding global e-invoicing compliance isn’t always the easiest thing so below are some ways that businesses can be sure that they’re complying with international standards. While this technological billing system is making its way around the globe, it doesn’t come without a good deal of confusion and a lack of clarity. Below are six ways to comply with global e-invoicing legislation.
1. Understand Country-Specific Rules
Unfortunately, international electronic invoicing isn’t as easy as following a set formula. There are still country-specific rules that companies and entrepreneurs need to remember. First, businesses should check if e-invoicing is required as some countries, particularly those in South America, make electronic invoicing mandatory. In other countries, it might be necessary for certain industries or with specific partners but not required by law for everyone. Things can get a bit muddled, which is why doing this preliminary research is paramount in complying with global regulations.
2. Apply for E-Invoices
Sometimes, part of global e-invoicing compliance is requesting permission to issue these invoices in the first place. Different provinces or nations may have specific pre-application procedures that must be followed before a corporation or individual can issue an electronic invoice. This application process might include submitting paper bills and financial statements, showing records and documents, and even applying for a specialized certificate that grants the ability to send out e-invoices.
3. Choose the Right Format
As most people would expect with electronic correspondence and documentation, the format is important. On a global scale, several different formats are accepted so companies must check in with the country they’re doing business with so they understand which formats are and are not accepted.
In general, XML files are permitted as they serve as a base language for many communication protocols around the world. Even so, there could be other mandatory file formats such as PHP, XLS, or JSP. Moreover, there are DAT, DWG, HTML, and PDF too. Different countries may use a unique kind of software program or system that renders useless the files that are normally used by international partners. An Internet search can provide information on which formats are acceptable for electronic invoices in a certain country.
4. Include the Right Content
While e-invoicing doesn’t necessarily differ much from a paper bill, there are a few components that are almost always included. For one thing, the payment terms must be included so that all parties involved understand how much money is being paid, who it is coming from, and who it is being sent to. This may also include the services rendered, such as consulting or contracting.
Also, contact information is typically included on an electronic invoice and this may include full name, physical address, telephone number, and email contact. The payment date is also critical and lets everyone know when to expect bank withdrawals or deposits.
Finally, the payment amount needs to be clear and properly laid out on the e-invoice. Global e-invoicing may involve different currencies so the entity that is writing the invoice should note the invoice currency as well as the currency rate. This will get rid of any confusion about the proper final amount.
5. Electronic Signatures
Finally, an e-signature is applied to the large majority of electronic invoices around the world. An electronic signature is a way of solidifying the payment terms and agreements as well as establishing the integrity of the invoice itself. Electronically signing an invoice is a way of authenticating and validating it and this is a necessary part of the compliance process. These days, it is far too easy for fake online documents to make the rounds across businesses and the world.
6. Safe Storage
As with a physical bill, an electronic invoice needs to be stored away safely, most often under predetermined security measures. The most common way to ensure secure access to an e-invoice is to keep it digitally stored in the cloud or some type of finance software.
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