Electronic Invoice

Electronic Invoice

Written by Ana Canteli on 15 May 2020

The need to manage the large volume of invoices and receipts associated with the commercial activity of a company implies assuming expenses related to the printing, shipping, and management of the document, which entails an expenditure of $1.2 per invoice sent and even something else for the invoice received, especially for custody obligations.

What is an electronic invoice?

An electronic invoice is proof of the delivery of goods or the provision of services in electronic format, which has been previously accepted by the recipient. It is a legal and guaranteed alternative to the traditional paper invoice. In Spain, all invoices, including electronic invoices, are regulated by Royal Decree 1619/2012, of November 30, which governs billing obligations. This Regulation establishes the rules that invoices must comply with, regardless of their format. Likewise, after the publication of standard EHA 962/2007 of April 10, it is possible to destroy the invoices received on paper if a certified digitization process has been previously carried out that obtained electronically signed digital copies.

How does electronic invoice work?

The invoice processing will depend on several criteria, in particular the format. We differentiate between invoices in structured format and invoices in an unstructured format. The former are those that can be generated automatically by the issuer's billing systems and can also be processed in this way, by the electronic payment and accounting systems of the recipient. Examples of structured formats are those that use the XML language, EDIFACT, etc. We consider electronic invoices in an unstructured format, mainly images, scanned or PDF invoices, which involves an additional procedure. Such as human intervention - to read the document and verify that it is legible, authentic, and or complete. Or the application of optical character recognition or zonal OCR.

Every invoice must meet some minimum characteristics:

• Legibility: it can be read, either by a natural person or a computer program.
• Authenticity: guarantee the identity of the issuer and receiver of the invoice.
• Integrity: guarantee that its content has not been modified.

The good thing about the invoice in electronic format is that the readability is provided by the software that manages them. As for authenticity and integrity, there are several ways to guarantee them. The most common is through a recognized electronic signature; It is the advanced electronic signature, based on a verified certificate and which has been produced using a secure electronic signature creation device. Other alternatives are the use of means provided by the parties involved, as long as those means have the approval of the Tax Agency. The electronic exchange of EDI data, or through the usual business organizational management, when an activity log is created to link the invoice to the delivery of goods and services documented in it.

OpenKM's document management system offers the technological platform to manage the entire billing cycle of an organization, whether in electronic or paper format. For electronic invoices in paper format, optical character recognition facilitates the identification of the documentary type and the extraction of key values ​​in the form of metadata. Any of these key data can be used to retrieve the invoice through the document manager's search engine, or even to classify or catalogue the document through automation. OpenKM's electronic invoice software also has a workflow to manage billing workflows. For example, if we receive or issue an invoice of an X value if it is higher than a particular value, OpenKM can capture that invoice within an approval workflow, to ensure compliance with internal regulations and applicable laws, at the same time that we minimize human error. For more information, the system has an audit trail that allows traceability throughout the invoice life cycle.

The OpenKM invoicing software is 100% customizable. If the organization wishes, it can create a billing portal for clients or suppliers, in which they access only the functionalities they need and are guided by a succession of screens, which facilitates and streamlines the process. Besides, any of the parties can receive notifications from the system, thanks to the subscription functionality, concerning documentation of interest: invoices issued, payable invoices, invoices received, pending of signature. The OpenKM suite offers a digital certificate signing client and a handwritten electronic signature application.

Benefits of electronic invoicing

• Improvement of the administrative efficiency of the organization, shortening the processing cycles, especially collection.
• Time and money savings in the creation and conservation of documentation.
• Increased security at the level of confidentiality, document management, legal compliance, and response to information loss.
• Reduction of the impact of human errors.
• Improved customer satisfaction; management is more comfortable and faster by eliminating paper, the postal service, and it contributes to modernizing business management.
• It helps to implement the business sector in the Information Society.

OpenKM's e-invoicing solutions offer the technological environment necessary to manage the organization's invoicing flow, regardless of its format, whether in its relationship with customers, suppliers, or even public administrations.