What it takes to create a compliant invoice process

July 9, 2021 Tradeshift Editorial Team

In today’s business environment, understanding compliance regarding invoicing is essential for success. But, with compliance regulations changing and varying for each country, how can organizations ensure they remain compliant with their business practices? What’s more, how does compliance affect an organizations’ ability to succeed? Below we break down the complex topic of invoicing compliance and offer advice for how you can ensure your operations are compliant and running smoothly. 

What do you need to include on invoices to remain compliant?

So, what do you need to include on an invoice to remain compliant? The short answer is it depends on the invoice. Typically, invoices need to include the name of the sender and the receiver, an address, and the itemized receipt of goods or services. However, as your invoices become more complex, so does the information that needs to be listed. As a general rule of thumb, your invoices (especially your e-invoices) need to have the following four things to be compliant

  • Authenticity of Origin: This ensures both the sender and recipient of the invoice are authentic and verified. There are two ways to manage this: ensuring both parties involved have a certificate proving their authenticity or through identification and authentication protocols.
  • Integrity of Content: This ensures no alterations to the content are made once the document has been issued. If someone were able to alter your digitally signed invoices without detection, then you would never know if they had intercepted it during transmission! This could cause delays in production or barriers down the line for your AP team.
  • Readability: All E-invoicing has to be accompanied by a human-readable document of data. Typically these are PDFs throughout the entire existence - from issuance through storage period.
  • Storage: Electronic documents must be stored safely. This guarantees integrity and provides an audit trail. It should be able to be accessed later on for any reason at all. 

How are organizations changing how they use invoices?

In today’s environment, businesses have to change how they use invoices. Companies are moving away from traditional paper invoices, and the new trend seems to be digital, or e-invoicing. There are many inherent benefits of using e-invoicing. A few key benefits include shorter processing times, easier storage and organization, and a reduction in the amount of paper that AP professionals need to sift through. But, there is also a great benefit from simply adopting a digital platform that supports your trading needs. 

After the impact of the pandemic on work, organizations realized the need for digital tools that support virtual work. Having a digital trade platform not only enabled businesses to continue operations virtually but also helped companies to better address and prepare for disruptions to their supply chain. At Tradeshift, we encourage organizations to embrace digital tools and platforms to expand their operations, increase organizational resiliency, and ensure regulatory requirements. We run a digital platform that can help you run compliant payables and payment processes quickly and accurately. 

Why is compliance so important?

Tax compliance is the laws and regulations associated with sales or value-added tax (VAT) that buyers and suppliers must adhere to. Similarly, e-invoicing compliance refers to the laws and regulations that suppliers and buyers must comply with when sending and receiving electronic invoices. While these two forms of compliance are very similar, each has its own unique requirements that organizations must keep in mind. Failure to ensure compliance could result in fines, fees, barriers to production, or a halt to your cash flow. Businesses need to ensure compliance not only for regulatory reasons but also to ensure that their business operations can operate efficiently and effectively. 

When it comes to compliance, things are always changing. Countries pass new codes and restrictions that organizations need to adhere to, and often these regulations can vary greatly from country to country. It can be overwhelming and time-consuming for supply chain professionals to try and keep up with these changes. But, ensuring that your team has the most updated information regarding compliance is crucial to keep your operations running. Due to our strategic partnership with compliance specialists like Sovos Trustweaver, Tradeshift can help to inform you of these changes and ensure your team is prepared for the future.  

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How does Tradeshift help?

Partnered with Sovos, Tradeshift helps you to ensure your supply chains and business operations are compliant and running smoothly. Our software is built for the evolving and complex modern tax landscape and is customized to support your team where you need it most. Within our Tradeshift Pay™ product suite, we tackle compliance across two areas:

  • E-invoicing compliance: laws and regulations are used to ensure taxes are paid and reported correctly. Requirements vary from country to country. Common required information includes tax registration numbers and tax rates. 
  • Tax compliance: This is done by the buyer in collaboration with Tradeshift’s professional services team and confirms all requirements are met. 

The best solution is to rely on the efforts of all parties. With support from our Tradeshift Pay™ solution, our team of professionals provides several ways to enable, encourage, and help your organization enforce compliant e-invoicing. Tradeshift places compliance in your hands, granting you access to the tools and resources you need to create an efficient business model. 

Tradeshift has a proven track record of helping organizations to create resilient, compliant, and reliable business practices. Our software solutions help you reach your business goals by:

  • Saving you time: Our platform uses technology to record and track invoices. This means that our tools are built to save you time and effort. With Tradeshift, your AP team will not have to manually enter data and file invoices. Rather, they can delegate time-consuming or tedious tasks to our advanced AI. And, with e-invoicing, you have unrestricted access to historical data at any point.
  • Reducing the risk of error: You and your team no longer have to stress about losing or misplacing invoices. With e-invoicing, you can directly interact with the customer and handle invoices online. Our digital system handles the collection and analysis of data leading to a more reliable process, and our built-in digital paper trail makes it easier to track invoices leading to stronger communication between all parties involved. 
  • Providing an easy-to-use experience: Our e-invoicing system allows you to scale up or down the level of involvement our AI has in your processes. This gives you complete control over what you want to automate and when. Our customers also love the easy tracking and organization of transaction records. With a consolidated platform, you can communicate with your customers, track and process invoices, and pay outstanding invoices all from one location. That’s compliance done right. 

Compliance, while it is a tricky subject, doesn’t need to be the reason you lose sleep at night. By setting up the right foundations and relying on the right set of tools and resources, you can ensure your team stays ahead of the curve and is informed on the latest compliance requirements. Tradeshift can help you to take charge of compliance in your organization by equipping you with the digital platform you need to streamline your transactions.

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