Electronic invoicing is defined as a procedure aimed at converting the invoicing process and paper notices into an electronic process, through which invoices, debt, and credit notices can be exchanged and processed in a structured electronic format with coordination between the seller and the buyer.
E-invoicing aims to improve traditional invoicing by reducing costs by eliminating ink and paper, increasing accuracy, eliminating the risk of human error as it does not require any manual entry, and allowing payments to be made at a faster rate. Electronic invoices are created by software that supports electronic invoicing, which is a specialized program that allows invoices to be sent to the buyer instantly and tracked in real time.
Electronic invoices contain the same data and items as traditional paper invoices but are issued, sent, and received electronically. They are considered evidence of delivery of the product or service provided by the supplier, payment due to the buyer, and allow both the seller and the buyer to track payments and manage their finances.
The importance of e-invoicing software for companies
The benefits of electronic invoicing are many for companies and authorities, as there are programs that support electronic invoicing and allow cost savings by reducing the use of paper, ink, and other resources used in issuing and handling traditional invoices and saving time to process the invoice from creation to sending and receiving. These programs ensure improved accuracy, reduce human errors to the point of almost eliminating them, and reduce slowdowns and delays in financial transactions.
Electronic invoicing software increases the accuracy of electronic invoicing data. When there is less need for manual data entry by human resources, data accuracy increases, and electronic invoicing allows automatic reconciliation and validation.
One of the most important advantages of e-invoicing for businesses is that e-invoice information is shared more efficiently with auditors, which helps maintain compliance. In this context, when invoices are handled electronically and through an automated system, the chances of fraud are lower.
How electronic invoices work compared to traditional invoices.
Electronic invoicing is simply the conversion of traditional invoices into electronic invoices, and electronic invoices are a digital invoice of goods and services; they can be issued for all inter-firm transactions (B2B) or from companies to the government (B2G).
Electronic invoices do not differ in content from traditional invoices; however, traditional invoices and electronic invoices include significant differences in their operations and life cycle, and the differences can be explained as follows:
Traditional invoices
Traditional invoices are in paper form, printed, and delivered to the customer manually, and then the customer enters the data of this invoice manually in the accounting system.
Electronic invoices
In software systems that support electronic invoicing, electronic invoices rely on structured data that devices can interpret, process, and process automatically, and electronic invoices enable the automation of the end-to-end billing process, including storage and recording. To implement e-invoices, an electronic invoicing system capable of collecting, coordinating, and sending data to the desired destination is required.
Types of e-invoicing programs
There are different and varied programs that support electronic invoicing, and these programs are divided into two main categories as follows:
The first type
Point-to-point communication between buyer and seller, which often occurs when using electronic data interchange (EDI) invoices, the most common form of electronic invoicing. This is a way to transfer highly unified information in a predefined XML data file, in which a dedicated and secure communication link is used, ensuring secure exchange between two systems and improving data flow.
The second type
A network that connects multiple buyers and sellers on one platform so that all network users exchange electronic invoices in the same shape and format. This model has the potential to scale and develop and provides efficiency for all parties involved, so the future of electronic invoicing in this model is expected to be greater than the other.
Criteria for choosing the right e-invoicing program
There are programs that support electronic invoicing in abundance recently and with the technological developments in the business world, and when choosing the right electronic invoicing program for your organization, you have to take into account several important points, including the following:
Speed in the creation of the electronic bill
One of the most important criteria that would prompt an enterprise to use software to support electronic invoicing is to save time and complete transactions more quickly. Given the importance of electronic invoices as necessary documents, it is important to select an accurate program to ensure the creation of a correct and valid invoice.
It integrates smoothly with current systems.
Finding an electronic invoicing program that is integrated with other systems that you already use in your organization may be a bit of a challenge. You need to make sure that the software you choose is compatible with the other business systems you use.
It has an electronic invoice cancellation feature.
Some problems may be encountered in arranging your company’s invoices at times, such as data entry duplicates, data errors, or you may wish to cancel the request itself, etc. It is therefore important that, when you choose software that supports the electronic invoice, the software you choose will provide you with the functionality to cancel the electronic invoice that has already been created in any appropriate way.
Automate invoice sending and receiving.
You can ensure increased efficiency, cost savings, and even scalability across your entire business when you choose an e-invoicing software that integrates with a system that allows you to fully manage electronic invoices from sending and receiving these invoices.
Provide a data analysis feature.
It is important to choose an electronic invoicing program that provides a built-in analysis feature along with graphical dashboards to analyze data and trends, which allows you to get a clear picture that enables you to extract valuable information and results from this data, useful to you in the financial decisions of your organization. It is also necessary to make sure that the program uses the data correctly and that it is accurate in keeping it secure.
The software supports downloading invoices in bulk.
In your organization, you may need to choose one of the programs that support electronic invoicing so that it is able to generate invoices in quantities. In addition, it is important that the software allows you to send invoices in bulk simultaneously to create an electronic invoice, and that you also have the ability to print a QR code on the invoice.
Has sufficient flexibility
One of the things you should consider is that the program must be able to work efficiently in situations such as the lack of Internet services, where the software must be flexible in using other modes of electronic billing, such as offline utility, direct access to the portal, etc.
How to get started with software that supports electronic invoicing
There are many programs that support electronic invoicing, and the details of dealing with them in creating the electronic invoice may vary according to the program, but we can clarify the basic steps to activate the features of the electronic invoice as follows:
Reporting to suppliers and vendors
The first step to starting with e-invoicing is to communicate with your business partners, as you must make sure that they are ready to receive invoices electronically.
Selection of software to support electronic invoicing
In the second step, look for programs that support the electronic invoice, select the appropriate ones, and make sure that the coordination of the electronic invoice you have selected contains all the necessary information you need and that you can use it for your traditional invoice. In general, the bills must include, as a minimum, the following:
- Transaction details.
- The identity of the seller and the identity of the buyer.
- Accepted payment methods.
- Applicable taxes and deductions, if any.
Establishment of electronic invoices
In this step, the third step is to create the electronic invoice with the necessary data on the transaction and on the seller and buyer, and given the disposal of manual steps such as manual input or at least reduction of data, the entire invoicing process becomes significantly more efficient.
Delivery
In the fourth and final step, invoices are sent in the manner agreed between the seller and the buyer; this may be via e-mail or via a secure Web site.
Conclusion
Due to the development and transformation we are witnessing in the modern era in the way of conducting business from traditional manual methods to modern electronic methods, programs that support electronic invoicing are widely available on the Internet, and Qoyod is one of the most prominent programs that provides you with many advantages in the field of cloud accounting, including the creation and issuance of electronic invoices in the Kingdom of Saudi Arabia.
Qoyod Accounting Program aims to provide the best accounting services to its customers, which ensures the creation of electronic invoices in accordance with the items set by the Zakat, Tax, and Customs Authority (formerly the Zakat and Income Authority), and you can benefit from electronic invoices with the Qoyod accounting system and other advantages with the click of a button.
reference
- https://www.medius.com/glossary/what-is-e-invoicing/
- https://www.swindia.com/swil-blog/9-key-things-to-choose-in-an-e-invoicing-solution/#:~:text=You%20have%20to%20understand%20every,QR%20code%20on%20the%20invoice
- https://rtcsuite.com/e-invoicing/
- https://www.basware.com/en/glossary/e-invoicing-benefits-and-advantages
- https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/What-is-e-invoicing.aspx
