29. August 2016

Invoicing by email: Don’t you forget it!

In recent years, sending invoices by email has almost become the norm. At the latest since the Tax Simplification Act of 2011, you can make the switch to complete electronic invoicing without much difficulty. The requirement to provide an email with a qualified signature or send it using the EDI procedure was removed with this act.
Benefits of sending and receiving invoices by email.

One important benefit is clear for all to see: elimination of paper and postage costs. Individual savings can be calculated very quickly and this is already the first incentive. However, the real savings can be found in the elimination or simplification of workflows. According to a study conducted by Deutsche Bank, (partially) automated invoice processing yields savings of up to six Euro when electronic invoices are sent. Savings of up to eleven Euro can be made if invoices are received by email. This applies per invoice!

These calculations do not just includes the cost of paper, postage, printing etc., but also the time spent by employees on manual invoice processing.

Calculate the potential savings yourself.

Go ahead and calculate the potential savings that can be made in your company:

Incoming invoices per month x 11 Euro + outgoing invoices per month x 6 Euro x 12 months = annual savings

Example from one of our SME customers:

250 x 11 Euro + 300 x 6 Euro = 4,550 Euro x 12 months = 54,699 Euro

Some things to keep in mind when dealing with electronic invoices:

1. What information must be contained in an electronic invoice?

In principle, the Value Added Tax Act (§ 14 of UStG Section 4) must also be observed in the case of digital invoices. In terms of information, there is no difference between analogue and digital invoices. All invoices are treated the same with regard to tax law.

2. Does the invoice recipient have to give consent?

Yes, customers have to give their consent. However, this sounds more dramatic than it really is because consent can also be given implicitly. This means that you can simply send future invoices by email and unless the customer objects, they have given their implicit consent. However, out of courtesy at the very least, it is advisable to inform the customer in writing that future invoices will be sent by email.

3. How are incoming and outgoing invoices to be archived?

A retention obligation of 10 years also applies to electronic invoices. Here it should be noted that the original must also be retained and its originality guaranteed. In addition, it must be ensured that electronic invoices are legible even after a period of 10 years. Therefore, make sure that the invoices are not archived using outdated technology, or are not liable to fade or become damaged in folders in the archive.

4. Is archiving in paper form permitted?

Electronic invoices must also be stored digitally. Printing electronic invoices so that they can be archived in analogue form is not permitted. However, you are allowed to scan incoming analogue invoices and add them to electronic invoice processing. Under certain conditions (GoBD-compliant), the digital invoice can be archived and the original analogue invoice destroyed.

5. Is revision security increased by electronic invoicing?

The revision security of a company does not automatically increase only by using electronic invoice processing. This is not automatic even with certified software. This depends greatly on the individual company, industry and most critically the defined processes. It is often a good idea to have your software and workflows assessed by an independent auditor.

But yes, you can increase revision security by implementing electronic invoice processing. However, this should only be viewed as one part of a larger strategy. Here you can find more information on the topic of revision security.

You recognise that there are lots of advantages to sending invoices by email and the associated electronic processing. However, there are also a few things that you need to be aware of. If you have any questions, feel free to leave a comment or contact us in another way.