With each company and economic region having its own invoicing regulations, global e-invoicing compliance requires constant monitoring and regular reviews. The introduction of e-invoicing mandates and new mandate models has added to the confusion for businesses seeking to remain compliant and streamline their workflow.
In a recent webinar, Georg Sonner, Global Business Advisor from Basware sat down with Liisa Kurki, Solution Owner Purchase-to-Pay & Order from KONE, to discuss the shifts in global e-invoicing requirements.
4 Emerging Trends in Global e-Invoicing Compliance
As companies continue to implement digital transformation within their organisations, governments institute e-invoicing mandates to recover lost tax revenue. For a global compliance strategy, it’s not enough to just add e-invoicing capabilities. It’s also critical to consider the direction governments are taking when implementing mandate models and what that means for your organisation.
1. Clearance Models
According to a paper issued by the European Parliamentary Research Service in August 2021, tax evasion and fraud has led to a €120 billion European Tax Gap. As a result, more and more countries are moving from the post-audit model to the clearance model. The clearance model in most countries is differentiated by its mandatory e-invoicing and technical integration requirements.
Italy is one example. They have already instituted a B2B clearance model with e-invoicing mandates and increased their tax revenue. But they aren’t alone. By 2025, most of the world will likely have a compliance model in place.
2. Proactive tax compliance
Earlier e-invoicing models, such as the post-audit model, were based on evidence of invoicing and declarations from both the suppliers and buyers. It is entirely based on trust.
With the use of the clearance model, compliance standards are shifting to proactive requirements. However, the supplier sends the invoice to the government before the buyer, allowing the government to clear the invoice rapidly.
3. Innovation is creating more potential e-invoicing models
While more countries are adopting the clearance model, it is not yet set in stone as the best method. Many organisations have created ‘hybrid’ models that combine aspects of both systems. For example, the supplier must first receive a registration number from their government in some cases. Once they have an identification number, they can send their invoice via traditional channels.
4. E-Invoicing is becoming the norm
As governments enforce mandatory e-invoicing, it’s clear that e-invoicing is less of a competitive advantage and more of the norm. Those who fail to adapt will be left behind and slapped with compliance fees.
However, there are many reasons organisations choose to switch to e-invoicing. For example, Finland-based KONE, a global leader in the elevator and escalator industry, decided to move to e-invoicing due to its safety, improved quality, eco-efficiency, and automation capabilities.
How can Basware help?
While it’s safe to say that governments are shifting to more proactive mandates, e-invoicing, automation, and regular audits can help organisations stay on top of regulation changes. As a global market leader in e-invoicing, Basware is the strongest partner to consider for your global e-invoicing compliance requirements. No matter your needs, Basware helps you cover all e-invoice delivery channels. To learn more about KONE’s specific journey to e-invoicing and more nuances about current trends, watch the entire webinar here.