Digital transformation of economy implicitly entails the digitalization of all business processes. Among these processes is billing, where the electronic invoice is substituting the paper invoice with increasing frequency. Over a year ago we analysed the mandatory electronic invoicing in the world. It is in this context that we would like to comment about the latest news referring to its obligatory nature in Spain, published on the 30th of November.
A few weeks ago, the approval by the Council of Ministers of the draft Law Crea y Crece was made public, which will be sent to the Cortes Generales for Parliamentary processing.
This law is one of the main reforms of the Recovery, Transformation and Resilience Plan, aimed at boosting business creation and facilitating their growth and expansion. Improvement in the process of business growth is essential, according to recent evidence, to increase productivity, job quality and internationalization.
With this objective, the law generalizes the use of electronic invoices.
This measure has a great implication for the administrative level since it implies a change in the administrative management of all companies and freelancers who must use electronic invoicing in their transactions.
When will mandatory electronic invoicing come into force?
The measure will be implemented in two phases, depending on the company´s turnover:
- Companies and freelancers with an annual turnover of more than 8 million euros: obligation to apply this measure within one year of the pass of the law in the BOE.
- Other companies and freelancers: obligation to apply this measure within two years of the publication of the law in the BOE.
What exactly is electronic invoicing?
An electronic invoice or e-invoice is often confused with a digital invoice.
Both can be processed electronically from creation to payment. However, there is a great different between them.
An electronic invoice contains supplier´s data in a structured format that can be automatically recognised by the buyer´s ERP. This supresses the need for the account payable department to enter the data manually. Whereas a digital invoice is just an invoice that ca be viewed and processed digitally.
As mentioned above, the electronic invoice is created in the seller´s billing system, online banking or in a web form. From there, the electronic invoice file can be downloaded or sent directly to the buyer´s software. This e-invoice is delivered through an electronic invoicing operator. The operator fulfils the same role as the postal system when sending paper invoices. Each electronic invoice recipient also has their own e-billing address.
Through electronic invoicing, unnecessary steps such as the manual data entry and verification are eliminated. For that to be possible, the invoice must be in a format that the buyer´s system can process. Electronic invoice files come as structured data. Some commonly used formats are XML and EDI.
Electronic invoicing (e-invoice) is the transmission, receipt and processing of digital transactional documents between suppliers and buyers. A true electronic invoicing method must be completely electronic in such a way that the supplier´s data can be integrated directly into the buyers system.
To summarise…
An e-invoice is:
- Invoice data structured in formats such as XML or EDI created in billing software.
- Structured invoice data issued using web forms
An e-invoice is NOT:
- Unstructured invoice data in formats such as PDF, Excel or Word.
- Scanned paper invoices
- Documents processed with optical character recognition
If you are looking for alternatives to cover this legal need do not hesitate to contact us. Our more than 14 years of experience in issuing and receiving electronic invoices in different countries endorses us.
