E-invoicing: what it is, why it is mandatory, and how to get started

E-invoicing means that invoices are sent and received in a structured digital format so that they can be processed automatically by accounting systems. Unlike a PDF or paper invoice, an e-invoice contains data in a standard format such as XML or UBL (Universal Business Language). This eliminates the need for manual entry and allows systems to start processing immediately. These XML invoices are increasingly being used in business services.

An important element in this is the use of secure networks such as Peppol. This European network ensures the secure and reliable exchange of e-invoices between businesses and governments, which significantly reduces the risk of errors, fraud and delays. Please note: a genuine e-invoice is not a scanned invoice or a PDF with metadata, but fully structured data that can be read directly by software. This fundamentally changes the way organisations organise their digital invoicing.

The European Union is working under the name ViDA (VAT in the Digital Age) to modernise the VAT system. One of the key priorities is the mandatory introduction of e-invoicing for cross-border B2B transactions within the EU. In addition, Member States are encouraged to introduce national obligations as well. This mandatory e-invoicing is intended to combat VAT fraud and enable real-time reporting. "We see that European regulations such as ViDA are having a huge impact on the digitisation of finance. The Netherlands cannot lag behind in this," says John.

Several countries are leading the way in this regard. Italy has made e-invoicing mandatory for all B2B transactions since 2019. Germany will begin a phased introduction in 2025, followed by Belgium and Poland in 2026. France has also set 2026 as its deadline, with a transition phase starting in 2024. The Netherlands will undoubtedly follow suit. For organisations, this means that optional digitisation is a thing of the past. E-invoicing is becoming a prerequisite for participation in the European market. Local authorities are already requesting e-invoices via the Peppol network, particularly for tenders.

Although the legal obligation is important, there are numerous business advantages that convince organisations. For example, costs are reduced because manual work such as scanning, retyping and checking is no longer necessary. This limits errors and significantly reduces the processing costs per invoice. Research by the European Commission indicates savings of between four and nine euros per invoice. By switching to e-invoicing, companies can make structural savings on administrative costs.

In addition, invoices are processed and paid more quickly. Automatic processing ensures shorter turnaround times, faster payments and better relationships with suppliers. E-invoicing also provides immediate insight into outstanding obligations, the status of payments and your cash flow. Real-time dashboards and reports allow you to optimise your financial management. "As far as I'm concerned, e-invoicing is not only a compliance solution, but also an opportunity to demonstrate financial leadership within your organisation," says John.

E-invoicing also forms the foundation for broader process automation. Think of automatic matching with purchase orders (3-way matching), digital approval flows, audit-proof archiving and improved traceability. In short, e-invoicing makes your processes more efficient and future-proof.

The transition does not have to be complicated. A structured approach will help you get started. Begin by analysing your current invoicing process. How many invoices do you process each month, how many of these are still processed manually, and where do errors or delays occur? Tools such as Spend Analytics provide valuable insights into this.

Next, investigate whether your ERP, accounting or financial system is suitable for e-invoicing. Does it support UBL or XML? Can it be linked to networks such as Peppol? And is it easy to integrate with suppliers or other software? If your system is not yet ready, consider a solution such as AP Automation from ISPnext. Preferably choose a platform that is recognised for e-invoicing within the European Union.

It is essential that the chosen solution complies with European directives. Choose a platform that connects to your ERP, is linked to Peppol, archives invoices in an audit-proof manner and grows with international legislation. Additional advantages include support for multilingual templates, country-specific VAT rules and built-in validation.

Once the technology is in place, involve your suppliers. Find out which suppliers can already send e-invoices, who needs guidance and which file formats they use. A Supplier Portal and clear communication plan, including instructional videos, frequently asked questions and technical documentation, will make the transition smoother.

Finally, technology alone is not enough. Successful implementation requires adapted processes and clarity about roles. Who validates invoices, who approves them, how are deviations handled? Record agreements using RACI models and train your employees. This will increase support and ensure continuity.

The introduction of e-invoicing does not end with technical implementation. Real change comes when employees understand why it is important, how it impacts their work, and how they contribute to it. Communication, training, and change management are therefore crucial. Consider workshops, manuals, and appointing internal ambassadors. In our blog "The adoption of e-invoicing: how to get your employees on board," you can read about how to approach this effectively.

The introduction of e-invoicing is not only a compliance issue, but above all an opportunity to modernise and automate your financial processes and prepare them for the future. Organisations that invest now will soon benefit from lower costs, faster processing and greater control over their expenditure. ‘At ISPnext, we believe that simplicity in processes leads to speed, control and peace of mind within finance. E-invoicing plays a key role in this,’ says John.

Would you like to know how your organisation can make the switch easily? Request a no-obligation demo from ISPnext and discover how our solution can help you work in a compliant and efficient manner.