There is no doubt about it – in the modern world, paper invoices will become a thing of the past. Their electronic equivalents are miles more efficient and cost-effective. Many companies are already exchanging electronic invoices, and, with a legal framework in place, these electronic invoices or eInvoices have the same legal status as their paper counterparts.

Supply chain partners and government authorities are increasingly turning to electronic invoicing to improve efficiencies, reduce costs and reduce their environmental impact. The European Commission, which views electronic invoicing as an important driver of economic competitiveness and environmental protection, established changes to the invoicing rules of the Value Added Tax (VAT) Directive which came into force in 2004. New initiatives are being taken by the Commission within the Europe 2020 strategy that focus on increasing the adoption rate of electronic invoicing, especially with  SME’s (Small and Medium Enterprises). The rules for electronic invoicing under the VAT Directive are different from paper-based invoicing in that electronic invoices can only be accepted if the origin and integrity of the invoice can be authenticated. The VAT directive has been translated into national legislations within EU member states, which creates differences in interpretation and requirements.  Descartes eInvoicing™ solution,  supports compliance with these requirements through its electronic archiving solution and multi country electronic signature services.

Some studies reference an estimated 75% reduction of invoice handlings costs if you integrate the digital invoice within your existing processes and ERP or accounting systems.  Descartes approaches eInvoices as part of specific  business processes,  focusing on the freight invoice within the book-to-bill process and the commercial invoice as part of the 3-way match process (order, dispatch advice, invoice), especially in the retail industry.  The solution is readily integrated with various Descartes applications and the customer’s back-end system through the Descartes Global Logistics Network™ Business Document Exchange Services.

Closely linked to the eInvoice solution is Descartes eArchiving™ solution.  Descartes eArchiving is a multi data center solution that supports data integrity, has a flexible retention period and the highest operational security measures. The electronic archive is accessible online using standard search functionality, including download and audit features for tax authorities in original and human readable format.

To avoid the need to have connections with many service providers or different Web portals, the interoperability of the different eInvoice solutions becomes a priority for the future. The Descartes federated model of interconnecting with various communities fully supports this approach, which is also called the 4-corner model (customer, service provider 1, service provider 2, supplier), as opposed to the 3-corner model (customer, service provider, supplier).

Key features to look for when moving to digital invoices include:

  • Compliance with local regulations, supporting cross-border eInvoicing in EU and beyond
  • The availability of a large community of connected companies
  • Standard integration with other value added logistics services
  • Support for all your invoices, including Web portal solutions and different types of data format conversions
  • Invoice integrity and authenticity management
  • A secure archiving solution
  • Multi-datacenter architecture, supporting EU soil-based storage
Written by Eric Geerts

Director, Product Management, EU Customs, Ports & Ocean Shipment Services at Descartes