What is an Electronic Invoice?
While renewed technology and many applications in the developing world enter into our lives, it provides a more comfortable life and provides certain conveniences in business life.
Thanks to the internet, which has become an indispensable element of our lives with the development of technology, invoice inquiries can now be easily handled.
e-Invoice is a service that allows access to all the invoice archives that can be accessed thanks to the service providers on the internet. Using this service, all old invoices in the archive and the latest invoice information can be accessed. In addition to the fact that all the invoices transferred to the electronic environment can be easily accessed over the internet thanks to today’s technology, they have also got rid of the risk of disappearance, which is frequently encountered in the old archive warehouses.
These systems, which are very important in business life and which companies use, especially include accounting and finance applications. Thanks to the e-Transformation portals, companies can easily make transactions in these areas. The e-Transformation portals offered by the companies also provide the opportunity to save money in terms of cost and time.
e-Invoice, we can say that this type of invoice is actually no different from regular invoices. The invoice that you will send to the other company subject to the e-Transformation portal can be sent as an e-Invoice. However, if the company to which you will send invoices does not use the e-Transformation portal, different applications are included: e-Archive Invoice
e-Archive Invoice is an electronic invoice type that travels among users who are not e-Invoice payers. Unlike e-Invoice, it can also be sent to end users.
With e-Transformation applications, including e-Archive and e-Invoice, companies also have the advantage of performing many transactions in cloud data storage environment. This application, where information can be stored for 10 years, enables companies to have instant access to data.
Your company, which will switch to e-Transformation, will achieve optimum cost while at the same time saving a great deal of time. E-Invoice applications that increase work efficiency enable you to perform your billing transactions more reliably and practically.
You can ensure that your personnel work in a better system within the system where costs such as invoice printing and sending are eliminated. You can also check what you are doing in the system by checking at any time. You also have the opportunity to learn about recent transactions and many more.
Hybrid invoice is ‘the method of embedding structured electronic invoices in PDF’. The hybrid name is due to the fact that the invoice contains both structured data that the machines read to automate billing workflows, and what we know as an image or PDF, what we can quickly review about the invoice. Having xml data and invoice image in the same file is nothing new as invoice images are usually embedded in XML files invoice, but this time the order is different – PDF is carrier container and XML is inside.
What are the Advantages of e-invoice ?
The e-Invoice system also has many advantages for your company. Thanks to this system, you get rid of costs such as paper, ink, and mailing. Your bills will no longer be lost. With the help of computer, you can easily and quickly prepare your invoices.
Since your invoices will be archived electronically, you will get rid of an obligation like invoice storage. Since you will not use paper, you will reduce paper intake and consumption and thus follow an environmentally friendly policy.
After you register for the e-Invoice system once, all invoices you will issue will be e-Invoice. A financial seal will be determined for your company. The duration of these seals is 3 years. Companies registered in the e-Invoice system should also be registered in the e-ledger system. If the counterparty you have invoiced has not switched to the e-Invoice system, you can bill the company. If you switch to the e-Archive system, you can issue an electronic invoice to these companies.
Why is e-invoicing compliance important?
For our clients, e-invoicing compliance is a ‘necessary evil’, as they need to be able to handle VAT and other taxes correctly in order to not incur fines or other penalties, and, of course, to be able to make VAT deductions correctly.
What a company needs to do before getting started
Very often, a company must meet certain requirements before it can get started with electronic invoicing. These requirements may entail the company being obligated to report switching from paper invoices to electronic invoices in order to receive approval from the tax authority, or the service provider having to report that it will start processing invoices electronically on behalf of the client.
In some countries, the supplier must get the invoice recipient’s consent in order to switch from paper invoicing to digital invoicing. This is primarily because, although e-invoicing has been available on the market for a while, in many countries its use is still at an embryonic stage. Many companies do not have the capacity to handle electronic documents. They still work only with paper.
“In some cases, the tax and accounting legislation may not be up to speed either. For this reason, the first question should always be whether or not an electronic invoice constitutes a valid document for tax purposes.”
Requirements that must be fulfilled
“The next step is the entire e-invoicing process, where the company, for example, must look at format requirements and requirements connected with document authenticity and integrity. In some countries, there is only one way to fulfil these requirements, while other countries offer a greater range of options. There may also be discrepancies within a given country – so-called ‘invoicing regimes’.
“The content of the invoice is also an important consideration. This includes the minimum content requirements as stipulated by the regulator in order for the invoice to be valid for tax purposes.
“As concerns the issuance, transmission and acceptance process, there is a significant difference between post-audit (most EU Member States) and clearance countries (for example, Turkey and LATAM). While in the post-audit countries the requirements are mostly to be met by the supplier, in clearance countries both the supplier and the recipient are equally involved in the process of clearing the invoice with the tax authority.
“But it is easy to forget that even in the post-audit countries there are typically some requirements that are to be met by the recipient as well. For example, some countries may require the recipient to send a receipt or some other form of acknowledgement to the issuer indicating that they have received the invoice and that it is correct, or that they have received the invoice but wish to make changes to it. The authenticity and integrity requirements apply to the recipients as well.”
What to consider when archiving
“Last but not least, it is important to look at archiving requirements. How will the e-invoices be archived? Which documents must be stored and for how long? Are there any auditability requirements? In some countries, for example, there may be a requirement to archive locally. While other countries may allow archiving abroad, the tax subject must obtain consent from the local tax authorities or notify them that the company will be storing their e-invoices somewhere else.”
Responsibility lies with the client
“There is often a misconception about the division of responsibility between the client and the service provider. When a tax subject outsources parts of its operations to a third party – to an e-invoicing service provider, for instance – this does not result in a shift of liability towards the tax authorities. The role of the service provider is to provide the tax subject with a solution, which the tax subject can assess and decide whether it reasonably fulfils the tax and accounting compliance obligations.
“If there is a disagreement between the client and the service provider over the interpretation or implementation of certain regulations, the opinion of the client should always be given more weight. It is the company that incurs any additional taxes or fines, not the service provider.
Professional Support in the Application Process
MELASOFT, which has been leading the IT sector for years, assists you. Firm analyzes are made first of the institutions and private individuals who want to move on to the application process, and support is provided at every stage for a smooth application process. You can complete this process smoothly and on time with MELASOFT’s Professional and expert staff. In this way, it is not difficult and late to switch to the invoice application electronically.