How to E-Invoice in a Global Setting: From Tax Compliance to E-Signatures

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It’s easy to become stuck in a rut if you’ve used paper for so many years to do everything, including accounts receivable. As you grow your business, continually using paper is going to become more challenging, especially when doing business overseas. If you think you’ve mastered how to use paper invoicing for your American customers, you’ve only just begun to deal with complex international regulations.

Not paying attention to e-invoicing tax compliance rules overseas could land you in trouble with a particular country. You could end up with major fines for violating compliance, and it could become a major mess trying to clear it up on paper.

It’s all the more reason going digital with e-invoices is the best action you can take this year.

Let’s look at how this works on a global scale, and what you can do to make invoicing work more efficiently on an international basis.

Why E-Invoicing is Essential for Overseas Billing

Before you expand your business to overseas markets, stop and calculate how much it’s going to cost you to send invoices by paper internationally. Mailing paper invoices to other countries is going to cost considerably in postage, especially when mailing hundreds of these on a recurring basis.

International shipping isn’t always error-proof either. It’s possible those paper mailings could get lost along the way. If some get lost temporarily, an international customer might receive your invoice far too late.

It’s to your advantage to digitize your invoices so every customer overseas receives a bill instantly without fail. It allows you to archive all your invoices as well so if there are any disputes, you’ll have immediate access.

While you’ll be saving money on mailing costs, ensuring international compliance has a strong guarantee by using e-invoices.

Tax Compliance Rules

As many note, there isn’t any legal reason to avoid not using e-invoices overseas since every country accepts them other than parts of Africa and Asia. Keep in mind these e-invoices require correct processing and archiving to avoid regulation issues.

At the top of your concern, though, is probably tax compliance rules overseas. EU-wide invoicing rules state you usually have to include the customer liable for the tax, otherwise known as a reverse-charge procedure. Plus, the person liable for tax needs to have their VAT identification number, their name, and address listed on the e-invoice.

These procedures would take far more time adding them on paper, making archiving with e-invoices easier for tax purposes.

Proper Formatting and E-Signatures

Some countries require specific formatting in e-invoices. It’s something you can easily accomplish when working with a trusted partner to navigate overseas regulations. You’ll want a platform that can turn your e-invoice into any format imaginable from PDF to UBL.

Also, you want to stay compliant with BCAT and EDI, or face significant fines if you ignore them.

Don’t forget about e-signatures either, which is one of the best ways to verify someone in another country signed your e-invoice. Through an e-signature, you’re providing complete legal certainty and reliability if any of your invoices become challenged.

Most of all, you’re providing an audit trail in any case where the IRS audits your international business dealings. Archiving provides complete transparency, and your e-signatures prove you’re doing honest transactions in countries you’re connecting to.

Thanks to the EU working hard to assure e-invoices become the standard by 2020, you need a partner to get you ready.

Colleen Reddy

As a Solutions Marketing Manager at Esker, Colleen understands exactly how the pains of manual processing and paper affect business professionals. Focusing on accounts payable, sales order processing and cloud faxing, Colleen brings tips and tricks on how to improve document processing and workflow in your company.

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