How does electronic invoicing work?

electronic invoicing

Until just a few years ago, invoices were made exclusively on paper.However, this type of document is beginning to have an important ally: electronic invoicing.

Electronic invoices, like those in paper format, are proof of the delivery of goods or the provision of services. Both have the same legal effects, although the electronic ones present two clear differences:

  1. Invoices require data validation through electronic signature
  2. Delivery is through digital means

Since 2015, the use of electronic invoicing is mandatory to work as a supplier of the Public Administration. However, today, there are already many private companies and freelancers who have also jumped on the bandwagon of digital invoices.

Invoices, in general, and electronic ones, in particular, are governed byRoyal Decree 1619/2021, of November 30, which regulates billing obligations and reflects aspects such as:

  • The obligation to issue and send invoices with other companies and freelancers
  • Follow three essential requirements:legibility, authenticityandintegrity
  • Lead times
  • special schemes
  • The content of the invoice

Bill “Create and Grow”

On November 30, 2021, the Council of Ministers approved the“Create and Grow” bill on electronic invoicing between companies and freelancers in Spain. The regulation is part of the reforms contemplated in theRecovery, Transformation and Resilience Plan, aimed at promoting the creation of companies and facilitating their growth and expansion.

Among the actions to favor the growth of companies, measures are included to advance in the fight against delinquency in commercial operations. To this end, the obligation to issue and send electronic invoices is extended to all commercial relationships between companies and the self-employed.

How to choose the electronic invoicing software?

The following characteristics must be taken into account when selecting the program or software correctly:

  • Accessibility:It is important to choose a program that can be accessible from different devices.
  • Automation:There are more and more softwares that allow you to automate some tasks. Automating the billing process will help increase productivity by reducing time spent on mechanical tasks.
  • Legality:When we talk about invoices, it is very important to comply with legal regulations to ensure the privacy and security of the data with which we work.
  • Integration:Electronic invoicing programs must be able to be easily integrated with other programs used in the company.

What types of electronic invoice formats exist?

There are basically two types of electronic invoices:

On the one hand, those witha structured formatthat facilitates their automated processing. They are XML files, EDIFCACT, etc.

And invoices withunstructured format, those that are on paper and are scanned. The files are in PDF, TIFF, JPG, etc. format.

Benefits of the electronic invoice

The main benefit of this invoice format is economic savings, since printing costs and postage are eliminated. In addition to this, other advantages are:

  • Shorten processing processes
  • Reduce potential billing errors by hand
  • Reduce space for storage
  • Contribute to the modernization of the economy
  • Eliminate paper consumption and its transportation, thus helping the environment

About Kushal Enugula

I’m a Digital marketing enthusiast with more than 6 years of experience in SEO. I’ve worked with various industries and helped them in achieving top ranking for their focused keywords. The proven results are through quality back-linking and on page factors.

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