For many companies, invoicing is an important but also a painfully time-consuming process.
In the manual invoicing process, a person needs to match and verify the invoices and another person to authorise the transaction (in small companies, this could be the same person), before the transaction can be registered into the company’s account. This may also lead to human error, which leads to delays in payments to vendors.
Adopting of e-invoice can help eliminate many of these problems.
As its name suggests, an e-invoice is an invoice that is generated, transmitted and process digitally with little to no manual processing required. E-invoices are created digitally in a supplier’s financial system, and then transmitted electronically through the network to the recipient, where it is processed electronically and allowing the process to be better integrated.
The Infocomm Development Authority of Singapore (IMDA) has launched the National E-invoicing Network in Singapore in 2019. As part of the International PEPPOL (Pan European Public Procurement On-Line) network, the e-invoice initiative aims to digitalise the economy, helping enterprises to improve efficiency and cash flow, while reducing cost and error, and also allowing a faster payment cycle.
Here are three major differences between e-invoice and paper invoice that companies in Singapore should know about.
#1 Standardised Invoice Format
Currently, many businesses may issue a PDF file through email or post. These are usually considered “single-sided”, where your customers will need to re-enter the information into their system. The same will also be required when the customer makes a payment for the invoice, and the businesses will need to input the data into their system.
However, with e-invoicing, the same data can be used across many businesses and agencies due to the use of a standardised invoice format. In technical terminology, the standardised invoice provides a structured data that can be easily used by a database and technology across different companies.
This is where the PEPPOL network comes in – it helps businesses in ensuring a standardised invoice is produced and generated.
E-invoice is typically structured, and the data comes in formats such as XML or EDL. These file formats are created using compatible invoicing software, while other web-based platforms can also allow invoice issuers to create and issue structured invoice data.
#2 Entering of Data
Another important thing to note is the entering of data to generate invoice. As mentioned earlier, PDF or paper invoices are generated manually. This could be done by inputting data manually or Optical Character Recognition (OCR), if a company has invested in this technology to ease the load of data entry.
However, both manual entry of data and OCR are not 100% error free, thereby requiring human effort to check if the data from the documents are entered corrected. In addition, there is a need for manual work to understand the different formats and label used by different companies.
However, by adopting e-invoices, errors caused by data entry will be reduced. E-invoice uses a standard structure format of entering information, and exchange of such information is done via PEPPOL network. This should reduce human errors, while reducing manpower needed for checking entries.
#3 Transmission And Storage
From the perspective of the invoice issuer, the key need is for them to send their invoices reliably and economically to their customers to get their payment. There are some companies that are still sending out paper invoices through post. However, postal delivery of invoices has its risks, such as the loss of the invoice while in transit for delivery or just the misplacement of invoice once received.
Many companies have adopted using PDF for their invoice in response to the inefficiency of postal mail. However, while there is notable cost-saving to this, there could be occasions where the emails get lost during transmission, or when the email address is changed.
Both options do not allow the seamless transmission of the invoice or ensuring that the invoice is received and accepted by the other party.
E-invoicing can help eliminate such problems by ensuring invoices are correctly transmitted and received by the other party. This helps in providing a seamless process and leading to faster payment cycles.
More Benefits of Using E-Invoice
While the functional differences between e-invoice and paper invoice may seem minimal, there are many further advantages in using e-invoicing system as compared to using paper or PDF invoice.
Being digital helps to save costs in paper and postage fees, as well as reduces man-hours required to process the invoice. The system is highly automated and data is transmitted electronically, with unnecessary steps being eliminated from the invoicing process.
The automated process will also help to reduce manual input of the information required, thus reducing mistakes. Businesses can also be assured that the invoices can be tracked easily and systematically.
An automated invoicing system will also provide information on when the invoice has been sent, viewed and paid. Depending on the system, invoice issuers can also see when their customers have viewed their invoice. This enables invoices to be processed efficiently and ensuring that they will be paid on time.
The adoption of the nationwide e-invoicing network will also mean that businesses in Singapore will be able to integrate with companies globally. As the e-invoicing network adopts the PEPPOL network, organisations can easily send e-invoices to businesses overseas and achieve the speed of processing similar to what can be achieved locally. You can check out IMDA list of PEPPOL-ready accounting software which can provide you with e-invoicing capabilities.
Grants Available To Encourage Use Of E-Invoices
To help businesses adopt e-invoicing, IMDA has launched the E-Invoicing Registration Grant, which provides a one-time payment of $200 for each business with a Unique Entity Number (UEN). OCBC Business Banking customers can register their business for Peppol online with OCBC.
This amount is given upon first registration to the E-Invoicing Network on or before 31 December 2020. Businesses interested in the grant can visit the IMDA website to find out more details.
Stay Healthy, Go Digital
Keep your workers and business healthy during this period by going digital. Through the partnership with IMDA Go Digital Initiative, OCBC Bank has put together useful digital solutions that can help your business buy, sell and operate better during this time. You can also get your business ready with E-Invoicing (PEPPOL) through OCBC.
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OCBC Velocity helps you view all your accounts details, comes integrated with E-Invoicing and cash management capabilities as well as access to our award-winning trade financing solutions. Use OCBC Velocity, your business in your hand.
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