Tips and Tricks for a Successful E-invoicing Implementation with ERPs

Electronic invoicing mandates are increasingly prevalent worldwide, compelling businesses to adapt to real-time transactional data sharing with tax authorities. Compliance demands robust integration frameworks and meticulous data management practices. While ERP systems may not be fully prepared to handle these challenges, integration with a suitable e-invoicing solution is indispensable.

ERP as the core engine of a company

Enterprise resource planning (ERP) systems are core engines of modern businesses, orchestrating functions such as sales, purchases, and invoicing. These operations are the lifeblood of a company's daily activities, so ERPs must handle them seamlessly. However, the current e-invoicing trends challenge the capability of ERPs to fulfill their expected roles.

Problems arise when a company uses several ERP systems or different financial and accounting systems, or even when it uses a single system but in different versions. Adapting these systems to the legal requirements for e-invoicing in a specific country or multiple countries can be costly – both financially, with the purchase of appropriate additional modules, and technically, as simply purchasing these modules may not suffice and could require complex implementations or even further development.

Ultimately, the issues do not hinge solely on whether a company operates in one country or many. Rather, they depend on the IT environment and the specific needs of the business.

Are ERP systems not enough for modern business?

While ERPs are trying to encompass as much functionality as possible, the dynamic nature of e-invoicing mandates presents a continuous problem. Simply implementing a solution before a mandate's deadline is insufficient; maintaining compliance necessitates constant adaptation. Laws evolve, content requirements are modified, and schemas undergo changes, making static solutions inadequate. Tax authorities may mandate specific values and code lists, which might not be readily available in existing ERP setups.

Another challenge is achieving compliance with e-invoicing mandates in multiple countries and monitoring legal changes in the countries of operation.

To address these challenges, ERPs must seek partnerships with e-invoicing service providers. By integrating invoicing technology into their solutions, ERPs can augment their core functionalities and optimize document workflow (such as format conversion) through automation. This approach allows connectivity with diverse endpoints, certification adherence, and the extension of essential services, including microservices tailored to specific needs.

Whether through partnership, white labeling, or collaborative development, ERPs can leverage external expertise to enhance their capabilities. By integrating specialist invoicing technology as an engine in the background, ERP systems can adapt to the changes in e-invoicing while maintaining focus on their core functions.

E-invoicing integration with ERP

Due to the varied nature of incoming data, ERPs must adapt to efficiently ingest and process it. Although ERPs could theoretically be equipped to handle inputs such as e-invoices in XML format or QR codes containing essential information, these tasks are often managed by other specialized systems.

Creating synergy between ERP systems and e-invoicing service providers is crucial for smooth integration, allowing each system to perform its original functions without disrupting core ERP processes. Each e-invoice that enters the system requires scrutiny and validation by relevant personnel, such as accounts payable or accountants. This involves reviewing, approving, and initiating payment processes, all of which need to be seamlessly integrated into ERP workflows.

AP/AR process automation

The ultimate goal of e-invoicing integration with ERP is to facilitate touchless exchange of invoices with government platforms across various countries, in accordance with their specific exchange models. While the invoicing process may still require some human intervention, e-invoicing applications ensure that the exchange and potentially e-reporting aspects operate with minimal manual involvement.

Even in cases where a third-party e-invoicing solution is employed, it should be viewed as an extension of the ERP rather than a standalone system. The ERP remains the primary source of data, and e-invoicing solutions function as engines in the background, providing essential support and value.

Compliance and mandates

Meeting e-invoicing requirements is not just a matter of adhering to regulatory requirements but a critical aspect of sustaining business operations. Electronic invoicing mandates come with specific deadlines, and failure to comply can result in severe consequences, such as:

• Financial penalties
• Damage to customer relationships
• The revocation of business licenses
• Inability to deduct tax on invoices issued contrary to the e-invoicing obligation

It's essential not to underestimate the time required to achieve compliance. Going live in a compliant manner is a comprehensive project that requires careful planning, attention to detail, and coordination across departments.

Integration challenges to keep in mind

E-invoicing touches every aspect of business operations, impacting core functions such as AP, AR, procurement, and master data. Moreover, it is built on data, making data and invoice management a critical aspect of successful e-invoicing and ERP integration. Ensuring compliance with regulatory requirements, such as VAT and GST mandates, involves sharing granular transactional information with tax authorities according to regional requirements.

Integrating e-invoicing solutions with existing systems, particularly ERP systems, presents significant challenges.

1. Complexity of integration: The process becomes difficult when handling initial data migration, along with response messages, and error-handling mechanisms.
2. Number of systems: Integrating e-invoicing goes beyond ERPs – it extends to e-commerce platforms, procurement systems, and AP processing systems, all of which require alignment.
3. Alignment of e-invoicing workflows: Achieving seamless integration necessitates aligning e-invoicing workflows with existing ERP processes. This involves mapping out current processes, identifying invoice-raising points, and determining the order of invoice distribution to other systems.
4. Involvement of e-invoicing specialists: Businesses may require external advisors to fully grasp e-invoicing mandates and ensure compliance. Specialists with technical expertise and a deep understanding of source systems and data formats can provide guidance.
5. Effective project management: Dedicated resources within the organization can significantly contribute to project success, facilitating allocated budgets and targeted planning.

Benefits of e-invoicing implementation

1. Enhanced compliance: The right e-invoicing platform ensures compliance with regulatory requirements, allowing businesses to continue operations smoothly in various countries.
2. Improved data quality: E-invoicing compels businesses to address poor master data, leading to cleaner and more granular data and reducing the risk of errors and penalties.
3. Increased efficiency: Clean and granular data and reduced manual tasks facilitated by e-invoicing improve overall process efficiency.
4. Visibility and control: Businesses gain real-time insights into their invoicing activities, leading to improved decision-making and resource allocation.
5. Cost reduction: E-invoicing automation results in a reduction in costs associated with legacy invoicing processes and traditional invoicing methods.
6. Financial savings: Beyond operational efficiencies, e-invoicing delivers significant financial savings through reduced processing costs and enhanced accuracy.

Avoid e-invoicing integration challenges and maximize the benefits

When considering e-invoicing system implementation, planning is crucial. Rather than seeking quick fixes or addressing e-invoicing issues in isolation, it's essential to view it as an investment. Initiating the process early allows ample time for implementation, testing, and ensuring data and tax policy accuracy. Testing in sandbox environments provided by tax authorities enables businesses to validate transactions and responses.

From the outset, it's vital to identify the influence of e-invoicing on all business departments, processes, and systems, not limited to the ERP. This includes considering upstream and downstream systems, such as e-commerce platforms and billing systems, to ensure comprehensive integration and successful implementation.

E-invoicing integration with the right support

Implementing e-invoicing systems presents a host of challenges, from complex integrations to evolving regulatory mandates. It's not just about making a single API call but also about effectively managing the lifecycle of invoices within core ERP systems. Furthermore, the need for continuous adaptation to changing regulations underscores the importance of vigilance and flexibility.

At Comarch, we understand these challenges and offer comprehensive solutions to address them. Comarch e-Invoicing system is designed to seamlessly integrate with ERP, other internal systems, and government platforms, ensuring smooth operations across diverse regulatory environments. With compliance in over 60 countries and ongoing enhancements to align with evolving requirements, our platform stands ready to support your business needs. Learn more about Comarch e-Invoicing.

FAQ:

1. How long does it typically take to implement an e-invoicing system?

The timeline for implementation varies based on factors such as available resources, the complexity of the mandate, and the skill set of the team. Some organizations have gone live within a matter of weeks, especially when rolling out across multiple countries simultaneously. However, it's advisable to allocate at least six to nine months for implementation to ensure thorough testing, data accuracy, stakeholder engagement, and training.

2. If e-invoicing isn't mandatory, why should I implement it?

Efficiency stands out as a compelling reason. E-invoicing streamlines processes by establishing clear digital workflows supported by clean data, enabling real-time document exchange. By eliminating manual tasks, such as handling PDFs and paper invoices, organizations can achieve enhanced efficiency across their finance functions, including AP and AR.