The e-invoice is a digital counterpart to the traditional paper invoice. Instead of being printed and sent in physical format, the e-invoice is created and exchanged in electronic format, usually via digital means such as email or dedicated platforms.
Where does e-invoicing originate?
In 2014, the European Union fostered the implementation of electronic invoicing in its member states (Law 25/2013), with the aim of increasing the sustainability of commercial transactions, reducing costs and improving efficiency.
In the public sector, implementation is complete; in the private sector, the pace is different. Italy is at the forefront of implementation, while countries such as Germany, Belgium and Greece are developing large-scale plans and others, such as France, have a fairly advanced project.
In the case of Spain, the regulations for 2024 require the use of e-invoicing for all commercial transactions in the private sector with a turnover of more than 8 million euros; other companies have one more year to implement.
E-invoicing contributing to the environment
One of the main objectives of e-invoicing is to reduce the environmental impact of the production, handling and disposal of paper. Each million paper invoices requires 10,000 kg of wood, and sending these million invoices electronically would significantly reduce the CO2 emissions from the energy required to produce the paper.
Electronic invoicing process
In the electronic invoicing process, a digital representation of the invoice is created, which usually follows a structured and standardised format, such as XML (Extensible Markup Language). This data file contains all the necessary information on the invoice, such as details of the issuer, receiver, invoiced items, taxes, etc.
Electronic invoicing offers a number of benefits, such as reducing the costs associated with printing and physically delivering invoices, streamlining accounting processes and improving the traceability of business transactions. It also facilitates the integration of invoicing into IT systems and the automation of accounting processes.
Types of electronic invoices
There are various types of e-invoices, and the classification may vary according to each country’s regulations and standards. However, in general, some common types of e-invoices can be identified. Generally, there are two types of e-invoice:
- Electronic invoices in a structured format: They are easily read by computer systems. In other words, they are coded so that the computer can manage the information automatically. For this reason, they are usually produced in XML (e.g. Facturae or UBL).
- Electronic invoices in unstructured format: are those that need to be typed in by the recipient (e.g. a PDF document).
Currently, the e-invoice is saving 3,300 pine trees per year since its widespread implementation.
Electronic invoicing requirements: what you must have in your digital invoice
- The number and serial number of the invoice, which must be sequential.
- The date of issue of the invoice.
- The transaction date of the invoice.
- The company name of the issuing and the receiving company. In the case of a natural person, first name and surname.
- The tax identification number of the invoice issuer and the recipient.
- Tax address of the issuer and the beneficiary.
- Transactions or concept of the invoice, with a brief description.
- Taxable base, VAT rate and income tax withholding, if applicable.
- The total amount of the invoice when the taxable base and VAT are added and personal income tax is deducted.
How does the electronic signature guarantee the authenticity of the origin and the integrity of the content of an electronic invoice?
In order for an electronic invoice to have the same legal validity as a paper invoice, the consent of both parties (issuer and recipient) is required.
In order to guarantee the authenticity of the origin and integrity of the content of an electronic invoice by means of an electronic signature, you can use one of the following two types of electronic signature:
- Advanced electronic signature based on a qualified electronic certificate.
- An advanced electronic signature based on a qualified electronic certificate and created using a secure-signature-creation device (also known as a qualified electronic signature).
In both cases, you will need to have a recognised electronic certificate.
These benefits are clear evidence that e-invoicing is here to stay and will be a game changer for businesses. However, it also has certain disadvantages, starting with the fact that companies and freelancers are obliged to use an invoicing programme, with the associated costs and learning curve.
