A Closer Look at e-Invoicing and its Various Formats

08.02.2012 | Author: brianw | Posted in Software
Print Email More
Invoice, a formal request for payment, is a commercial document issued by the seller. It indicates the dates when the products or services were delivered /rendered and the amount payable by the buyer /customer. Both electronic and paper based invoices are used these days. However, electronic invoices are the best bet as it helps to take the pain away from the procurement process. Businesses that automate invoicing and procurement processes are found to gain financially. Instead of investing in separate automation tools for procurement and invoicing, companies must invest in an eProcurement solution so that the entire procurement workflow from the order to the delivery and invoicing is automated.

Providing invoices electronically is an effective approach as it helps not only to streamline processes but also to reduce costs. Apart from financial and environmental factors, regulatory factors are also driving companies to switch from paper to electronic payment process invoicing. Though, neither the Sarbanes Oxley Act nor the EU directives specify the kind of invoicing to be done, e-invoicing helps a lot in order to be compliant with these regulations.

Electronic invoices can be transferred electronically i.e. through computer files or telematically i.e. from one computer to the other and therefore electronic invoices are also referred to as telematic invoices and digital invoices. Electronic invoices are issued in formats such as EDIFACT, XML, STFI, UBL, rtf, html, txt, pdf, doc, xls, gif, jpeg, and so on. In short, any format is used but in order to make it legally valid, it should be electronically signed. Let’s look at some of the most notable formats of electronic invoices.

EDI
EDI (Electronic Data Interchange) is the electronic transfer of invoice information between the supplier and the buyer in a manner agreed upon by both of them. It is one of the traditional formats and is fast and secure. This format is suitable for very large enterprises as it is costly and time consuming. EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport) is a form of EDI.

XML
XML (Extensible Markup Language) is the newer way of sending standardized text files between the supplier and the buyer. It is still in the growing stage and therefore new standards are slowly emerging. The two current standards that are under development are UBL (Universal Business Language) and UN/CEFACT.

PDF
PDF (Portable Document Format) is one of the popular formats for sending invoices as it can manage both texts as well as images.

Apart from these, there are several national formats such as Finvoice in Finland and Svefaktura in Sweden, and ISDOC in Czech Republic.

Click here to read more on – Regional development, Value network

Processing your request, Please wait....

Leave a Reply


Additional Articles From "Software"