7 ways e-invoicing and e-reporting add real business value

Author: Priyasha Purkayastha, Sr. Content Writer, TJC Group | Co-author: Patchanok K, B2G Team Lead, TJC Group

E-invoicing and e-reporting are hot topics right now as it has become mandatory for B2B, B2C, and B2G transactions worldwide. But have you given a thought to why they have become so popular and how businesses benefit from them? Well, we have just the right blog curated by our experts for you. Read on to know more!

A quick introduction to e-invoicing and e-reporting

Simply put, electronic invoicing, or e-invoicing is a form of electronically exchanging invoices between a supplier and a buyer. Simultaneously, electronic reporting or e-reporting enables companies to electronically transmit financial information directly to the relevant tax authorities. These, furthermore, help companies to comply with VAT in the Digital Age (ViDA) and other new international e-tax initiatives. E-invoicing is the essential precursor to introducing e-reporting. The way data is managed and structured within a company’s ERP system will govern how straightforward it is to implement.

The rise of electronic transactions

Governments worldwide are mandating the use of real-time, electronic invoicing systems and real-time financial reporting.  This broader transition to fully digitalised systems has been underway for some years now. Many of these changes are being accelerated by the EU’s VAT in the Digital Age (ViDA) proposals. According to research by the management strategy and market research specialist IMARC Group, the long-term growth of e-invoicing will hit 20% annually between now and 2028.

Implementing e-invoicing and e-reporting are challenging regulatory requirements for many multinational companies. In fact, every country has set its own compliance rules and deadlines. Information needs to be presented very differently in different regions, and when these tasks are scaled up across a diverse international business operation, it becomes a highly complex undertaking.  This is because the data to be included in an e-invoice needs to be stored in a defined and highly structured format, which then enables the invoice to be read automatically by IT systems. Automated reading means the data can be updated in real-time and receipts generated instantly.

An in-depth overview

In spite of the many complexities of complying with new electronic invoicing and reporting standards, there is a clear plus side to the introduction of these new processes. These systems ensure that companies start to streamline their financial and administrative processes and, where necessary, permanently get data volume growth under control. Typically, e-invoicing and e-reporting software will be integrated with an organisation’s Enterprise Resource Planning (ERP) system, which for many users is SAP. Looking to the future, many companies are migrating away from SAP ECC to SAP S/4 HANA, and unchecked data growth has profound cost implications.

Having worked with countless companies who are using SAP and helping them to introduce best-practice B2G compliance systems, we believe e-invoicing and e-reporting are positive developments. As a matter of fact, they offer numerous benefits that drive long-term operational excellence and cost savings. Here are seven ways that the digital transformation of invoicing and reporting, involving the electronic submission of documents in real-time, is transforming multinational business operations for companies who use SAP.

Key advantages of e-invoicing and e-reporting for businesses

Automatic boost to efficiency

One of the primary advantages of e-invoicing is the significant increase in efficiency. According to a report by Billentis, e-invoicing can save businesses 60 to 80% of invoice processing costs compared to traditional paper invoicing. This cost reduction is achieved through automation of manual tasks, elimination of data entry errors, and faster processing times.

Eliminates chances of human error

E-invoicing also improves accuracy and reduces the chance of human error. By automating the invoicing process, businesses minimise opportunities for inaccurate data inputs, delayed paperwork, and so on. This increased accuracy helps prevent costly mistakes and ensures that all invoices are processed correctly and swiftly.

Greater informational transparency

E-invoicing and e-reporting also enhance customer relationships and supplier interactions. By providing a shared, cloud-based portal for invoice viewing and management, businesses can offer greater transparency and accessibility to their customers. This improved communication leads to more positive customer relationships and faster dispute resolution.

Enhanced security with encryption

Security is another crucial advantage of e-invoicing and e-reporting systems. These solutions often integrate with existing ERP systems, ensuring secure transfer of information between platforms. Encryption of payment data further protects sensitive financial information.

Reduce risks of penalties and reputation damages

Interestingly, from a compliance perspective, e-invoicing and e-reporting help businesses meet regulatory requirements more efficiently. By ensuring that all invoices are accurate, complete, and submitted on time, these systems reduce the risk of penalties and enhance the company’s reputation with regulators.

Cuts paper consumption and carbon footprint

E-invoicing and e-reporting also contribute to environmental sustainability by reducing paper consumption and carbon emissions associated with mailing physical invoices. This aligns with growing corporate social responsibility initiatives and can improve a company’s environmental footprint.

Insights for strategic decision-making

Lastly, these digital solutions provide valuable insights into spending patterns and potential savings through built-in analytical tools. This data-driven approach enables better financial decision-making and strategic planning.

Now that you have understood the advantages of e-invoicing and e-reporting – let’s see how TJC Group could support their implementation in your company.

Prepare your company for the introduction of e-invoicing and e-reporting

As we have highlighted, the digitalisation of invoicing and reporting processes impacts daily business operations, financial systems, master data governance, and individuals’ work. TJC Group follows a proven methodology to support companies with the implementation phase. This begins with a situation analysis to understand the existing situation and the impact of the changes proposed. The situation analysis helps to identify non-standard processes and specific system information settings. Also, it helps to address the main challenges for taxpayers to comply with, including data, processes, and technology.

As a matter of fact, project scoping activities help determine the invoice data sources, along with the availability of the following –

• Required data
• Transaction posting procedures
• The type of invoicing document
• The invoicing process,
• Any involved stakeholders
• Settings in the ERP system for generating invoices

It is quintessential to have a clear overview of existing scenarios to help ensure uninterrupted operations and compliance with tax regulations.

Leveraging SAP DRC for e-invoicing and e-reporting

If you are an existing SAP user, powerful tools are available to support your transition to e-invoicing and e-reporting. SAP DRC (SAP Document and Reporting Compliance) is one of the most valuable solutions for tackling any e-invoicing and e-reporting concerns. In fact, the solution allows users to create, process, and monitor transactional documents and reporting – enabling organisations to stay compliant with their local legal framework and regulations very quickly.

With digitalisation taking over the process of tax compliance, not only does it translate into tighter controls (with risks of business disruptions), but it also creates a paradigm shift in transposing traditional compliance obligations. Responsibility for compliance lies firmly with the taxpayer, and companies need to adjust to new requirements for periodic (usually quarterly) reports and tax returns. This may sound uncomplicated, but bear in mind the size of a typical company’s SAP database and the fact that audit activities involve the analysis of multiple records (in the thousands or even millions). Therefore, automation and technology are becoming a quintessential part of e-invoicing and e-reporting activities to help prevent the explosion of tax compliance costs.

Key features and benefits of SAP DRC

How can TJC Group help you implement e-invoicing and e-reporting?

Nonetheless, here are some of the primary advantages of working with TJC Group –

• As SAP data management experts, TJC Group is one of the most sought-after partners for long-term B2G compliance & management.
• We go the extra mile with our talented and senior SAP finance consultants, who work as a flexible extension of your in-house team.
• In fact, we use the proven SAP Activate methodology for project planning and execution. Thereby ensuring that we always deliver optimised templates and solution accelerators. 

• We have a highly skilled team of experts defining the best scope of practice while developing an initial scope statement and project schedule for every SAP DRC implementation. This stage helps identify and mitigate risks for project implementation and minimises any negative business impact. 

What sets TJC Group apart as SAP B2G compliance experts?

With 25+ years of experience assisting clients with challenges pertaining to SAP data management for tax and audit purposes, collaborating with TJC Group basically helps organisations in several ways –

Unsurpassed SAP knowledge 

TJC Group’s knowledge covers SAP solutions, tax, and technology. The company’s vast expertise bridges the gap between stakeholders and regulators while creating synergy between the tax and IT teams. 

Access to SAP SME’s

Evidently, our subject matter experts (SMEs) have broad experience working on projects related to tax and SAP. Additionally, we have a dedicated Business to Government (B2G) team that helps clients stay compliant with ongoing regulatory changes. They also ensure that clients avoid non-compliance charges and reputational risks. 

Access to state-of-the-art technology

One of TJC Group’s most significant strengths is its use of advanced technology. As a matter of fact, more than 40% of our workforce is dedicated to R&D, which helps ensure the smooth operation of all processes.

The adoption of e-invoicing and e-reporting drives clear business value, improved efficiency, and improved accuracy. Additionally, it also enables faster payment processing times, enhanced customer relationships, better compliance, etc. As more countries mandate e-invoicing and reporting, a partner to support you throughout always comes in handy. Connect with us now for your e-invoicing and e-reporting implementation requirements.