Electronic invoicing, or e-invoicing, is just massively changing the way businesses handle their billing communications and financial transactions. But like any emerging technology, it often comes with its own share of myths and misconceptions. In this blog, we'll dive into those myths and evaluate them from our professional perspective to uncover the true potential and benefits of e-invoicing. In the end, you'll see why e-invoicing is not only a modern necessity, but also a powerful tool for businesses of all sizes.
What is e-invoicing?
Before we dive into the myths, let's take a moment to understand what e-invoicing is really all about. And a heads up: PDF invoices sent by e-mail don't fall into this category! On the contrary, e-invoicing encompasses the entire process from creating, to sending, to receiving invoices electronically instead of traditional paper documents.
In fact, the current draft law for mandatory e-invoicing in Germany (planned to apply for B2B transactions from 2025) explicitly excludes PDF invoices as electronic invoices. It's important to understand that to begin to see the scale of the changes that are coming here! Only digital invoices according to EN 16931 (e.g. "XRechnung") will then be considered as electronic invoices!
It's essential to consider things comprehensively, and so e-invoicing also involves the digital exchange of invoice data, often via secure platforms and standardised formats, to reduce manual work and potential errors. This also means a shift with a focus on information and data. After all, the added value of an invoice is not in the medium, but in what is written within the document: why you want to be paid by your customer and why your customer needs to know why they should pay you. In a data-hungry world, this is important as more and more organisations demand better and richer data from their suppliers.
Unlike PDF invoices, actual e-invoices can efficiently meet these increasing requirements for transparency and accuracy. This is also why states are increasingly introducing so-called "B2B reporting platforms" and obliging invoice issuers and recipients to report the invoices there. Not least to increase tax transparency!
The reality of e-invoicing: myths and truth
Now that we've clarified what e-invoicing is, let's take a look at the most common myths and explain how we see it with our fact check!
Myth 1: E-invoicing is too complicated
Fact: Modern e-invoicing systems are designed to be user-friendly. Companies of all sizes can easily use these platforms, making e-invoicing accessible to everyone. It's easier than you think, and it's high time to drive digitalization forward decisively. Modern cloud solutions, like our service Banqup, are particularly suitable. They focus on the needs of SMEs and can offer additional services (such as payment integration or invoice financing) based on this focus.
Myth 2: E-billing is expensive
Fact: While initial setup may incur costs, e-invoicing significantly reduces expenses on paper, printing and postage, leading to substantial long-term savings. Only with full electronic invoicing can highly appealing complementary solutions also become possible. For example: flexible invoice financing for SMEs!
Myth 3: E-invoicing is insecure
Fact: E-invoicing platforms have the highest priority on security and use advanced encryption and protection measures to protect your data more effectively. Far more secure than paper invoices, which subsequently have to be scanned in again at the recipient's end.
Myth 4: E-invoicing is only for tech-savvy companies
Fact: Most e-invoicing systems are user-friendly and do not require advanced technical know-how. They are specifically designed to simplify invoicing for everyone. For example, the invoicing process can be done regardless of location. No need to physically travel to the office anymore to check paper invoices. Even working from home or other remote locations, work can continue seamlessly and securely.
Myth 5: E-invoicing is time-consuming
Fact: E-invoicing automates processes, reduces manual work and saves time, while minimizing errors. The proportion of automated invoice verification can be massively increased. The process costs are the real potential savings.
Myth 6: E-invoicing requires high IT investment
Fact: Cloud-based e-billing solutions minimize the need for extensive IT infrastructure and are cost-effective for businesses. Economies of scale can be passed on from the e-invoicing provider to the user in this context.
Myth 7: E-invoicing is all about compliance
Fact: Compliance may be critical, but e-invoicing also offers additional efficiencies and cost benefits. See above!
Myth 8: E-invoicing concerns only domestic transactions
Fact: E-invoicing is not limited to domestic transactions and can streamline international invoicing to ensure compliance with the regulations of different countries. Especially in international settings, a variety of requirements arise, which only a specialized provider can guarantee compliance with.
Myth 9: E-invoicing is less reliable
Fact: Modern e-invoicing systems are extremely reliable and offer transparency and traceability throughout the entire invoicing process. Archiving and subsequent searching in particular are significantly better than in the paper process.
Myth 10: E-invoicing reduces human interaction
Fact: E-invoicing improves communication between companies and simplifies interactions, strengthening relationships. More time is left for what really matters!
Benefits of e-invoicing for businesses:
Why should businesses consider e-invoicing? Let's take a look at some of the many e-invoicing benefits that go far beyond the myths:
- Cost savings: E-invoicing significantly reduces paper, printing and postage costs and offers long-term financial benefits. In addition, fully digitalized processes are the real drivers of cost savings.
- Efficiency: Automated processes reduce manual work, minimize errors and optimize the invoicing workflow.
- Eco-friendly: Going paperless reduces a company's environmental footprint and contributes to sustainability goals. Using valuable paper for invoices is simply no longer in keeping with the times!
- Enhanced security: E-invoicing platforms have the highest security priority and ensure the secure transmission and storage of sensitive financial data.
- Regulatory compliance: e-invoicing helps companies ensure tax compliance and minimizes the risk of penalties.
- Business growth: More efficient invoicing processes save time and resources, allowing companies to focus on growth and innovation.
In conclusion, e-invoicing is not just the future but the present of financial transactions. Dispelling these myths is essential for businesses to unlock the full potential of e-invoicing, experience cost savings, increase efficiency, and contribute to a sustainable future. It's time to embrace the digital transformation and reap the many benefits that e-invoicing offers.
Take the time to explore the many benefits of e-invoicing and visit our other blog posts for even more information. We're available to tell you more about our solutions and how they can benefit your business.