E-invoicing: What’s the big deal?

Justin Ashworth, solutions executive at iOCO.

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As of 1 January 2025, e-invoicing became mandatory in Poland, Germany, Belgium and France, with Forbes reporting the European Union is undergoing a major shift in how it approaches tax compliance, with several member states introducing mandatory e-invoicing.

So, the big deal is that e-invoicing is a global trend and while it is not mandatory in South Africa – yet – it is widely practised in the country, to the extent that the South African Revenue Service (SARS) has even defined what it should look like.

Let’s unpack exactly what e-invoicing is and what value it adds to businesses operating in the digital age.

The term refers to the electronic exchange of invoice documents between a supplier and a buyer. Unlike traditional invoicing, which involves printing, mailing and manually processing paper invoices, e-invoicing automates these tasks, which in turn reduces errors, speeds up processing times and lowers costs.

E-invoicing systems can integrate with a company’s existing financial software, facilitating seamless data transfer and real-time updates. Manual data entries are error-prone, leading to delays and disputes that can be avoided through e-invoicing systems which automate data entry and validation.

E-invoicing systems can integrate with a company’s existing financial software, facilitating seamless data transfer and real-time updates.

The end result is the acceleration of payment processes because only complete and accurate invoices are sent out.

As far back as 2014, Gartner declared e-invoicing had gained worldwide traction and highlighted growing global adoption.

Gartner noted a move to e-invoicing had already been proven to yield significant savings for businesses, but added the complexity of multinational e-invoicing is challenging.

It is regarded as one of the most significant advances in the way companies handle transactions, as it is a process that replaces traditional paper invoices with an electronic version.

Across the world, this move has enabled companies to streamline operations, enhance efficiency, accuracy and most crucially security.

Moreover, it provides not only a secure and efficient platform, but also a robust one that connects businesses to global networks such as Peppol − an extremely secure, international network that allows organisations to exchange business-critical electronic documents with everyone who has registered on its network.

There hasn’t been any official announcement from SARS regarding the adoption of Peppol as an e-invoicing network; however, uptake is gaining momentum due to its efficiency in electronic invoicing and document exchange.

Peppol is very big in Europe, with many countries exploring or implementing it to streamline invoicing processes and improve tax compliance. Given the benefits of Peppol, such as standardised data formats and enhanced interoperability, it could become a viable option for SARS in the future.

Peppol – initially a framework designed to simplify and standardise electronic procurement processes across different jurisdictions and specifically in dealing with public sector entities − has now expanded to include private sector transactions.

The network uses a set of open standards to ensure electronic documents, such as invoices, can be exchanged seamlessly between different systems and organisations.

One of the key features of the Peppol network is its use of access points, which are gateways that connect businesses to the network, allowing them to send and receive electronic documents.

Access points are provided by certified service providers, ensuring the network is secure and reliable, and by using them, companies can connect to the Peppol network without having to invest in complex infrastructure or software.

While this framework originated in Europe, its influence is being felt worldwide, with countries including Singapore, Australia and New Zealand recognising the potential to streamline business transactions and enhance efficiency and adopting similar systems. In these regions, businesses can utilise the network to send and receive electronic invoices, regardless of their location.

The global adoption of this electronic document exchange system is testament to its effectiveness.

Despite the many benefits, implementing e-invoicing systems can require significant upfront investment in software, training and infrastructure, particularly for small businesses.

This can be overcome by partnering with vendors offering scalable solutions that can be tailored to different business sizes and needs.

Also, navigating the varying regulatory requirements for e-invoicing can be daunting. However, these hurdles can be surmounted by acquiring the right advice from compliance experts who continuously monitor regulatory changes and update the system accordingly.

E-invoicing and electronic document exchange networks mark a significant advancement in the digital transformation of business transactions. By automating and standardising the invoicing process, these technologies provide numerous benefits.

Despite the challenges associated with adoption, the global trend toward e-invoicing is unstoppable. As more businesses and governments embrace these innovations, the future of transactions is unquestionably increasingly digital and interconnected.

As we advance deeper into the digital age, these solutions will become essential for organisations aiming to enhance their competitiveness on a global scale.

By providing a standardised, secure and efficient method for exchanging electronic documents, businesses around the world are modernising their operations and remain competitive in the digital age – now that is a big deal.