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Keywords: electronic invoicing, einvoicing, e-invoicing, EU, VAT, Carter, Accountancy Age
Matthew Garrow-Fisher | News | 20 April 2012
UK accounting firms are being urged to work with their clients to help them develop robust processes for electronic invoicing in order to compete effectively with their European rivals.
Writing for Accountancy Age, Steve Carter, Head of e-Invoicing Solutions at Bottomline Technologies, said there are many nations across the continent that are already well ahead of the UK.
He noted that with the 2013 deadline for compliance with cross-border VAT and digital invoicing directives approaching fast, it is imperative that UK organisations act, and called on accountants to help them.
Indeed, he pointed out that seven of the top eight markets for UK businesses are within the European Union, so failure to move swiftly could have serious commercial consequences.
"The directives will require strong processes to ensure the integrity of inbound and outbound invoices, in paper and electronic format, to guarantee document protection and remove any ambiguity," he wrote.
"The new rules aim to promote and simplify invoicing legislation by removing existing burdens and barriers. It establishes equal treatment between paper and electronic invoices without increasing the administrative burden and aims to promote e-invoicing by allowing freedom of choice between the two forms."
But the directive will only achieve its goals if e-invoicing processes are as robust as those in place for paper-based transactions, Mr Carter insisted, warning that duplicate documents and an unclear audit trail could undermine the switch to electronic documents.
He said that compliance with EU directives requires a "demonstrable system" to prove that invoices are genuine, that they are for the correct amount, that they have not been tampered with and that the goods have been received as per the order.
Not only this, but to comply with VAT rules invoice information must then be stored according to the legal requirements of the relevant country, with each nation differing on its policies in this area. Failure to do so could result in an inability to reclaim VAT or an investigation by the tax authorities.
If UK companies are not able to meet these challenges they risk letting their competitors in Europe overtake them, since many have already become pretty sophisticated on their use of e-invoicing and are using it to exploit new supply chain finance models like factoring and dynamic discounting.
"For accounting firms, the challenge now is to work with clients to not only impose strong e-invoicing processes and meet the diverse requirements of different European counties, but also explore the role e-invoicing can play in financing to ensure UK businesses are well placed to exploit emerging international opportunities," Mr Carter concluded.
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