e-InvoicingBasics

From paper to 100% electronic invoicing

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e-Invoicing Quiz

Test your knowledge on e-invoicing with our e-invoicing quiz.
Click on an answer to reveal if you are right – or not!

1. Which of the following countries has tax authority legislation in place for electronic invoicing?
    
   1. FranceFrance
      
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   2. United KingdomUnited Kingdom
      
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   3. GermanyGermany
      
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   4. SpainSpain
      
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   5. United StatesUnited States
      
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   6. All of the AboveAll of the Above
      
      Correct, They all do. Each country has some form of legislation that relates to electronic invoicing from the local tax authority that must be complied with.

 

2. Which of the following processes guarantee the required authenticity and integrity for electronic invoicing within the European Union?
    
   1. EmailEmail
      
      Maybe. Under the new rules (2013) sending an electronic file (PDF) as an attachment over email can potentially meet the requirements for authenticity & integrity. But this is yet to be proven and has no precedence.
   2. Electronic Data Interchange (EDI) with proper management controlsElectronic Data Interchange (EDI) with suitable management controls
      
      Correct. Both B & C are the most definitive answers, EDI being the longest established, with clear guidelines in Europe since 1994.
   3. Digital signaturesDigital signatures
      
      Correct. Both B & C are the most definitive answers, digital signatures provide authenticity & integrity and can be implemented quickly and efficiently.

 

3. Electronic invoicing programmes are proven to offer compelling savings for companies of any size. On average, my company can expect to save the following:
    
   1. Between 0.5% and 2% of my annual revenuesBetween 0.5% and 2% of my annual revenues
      
      Correct. There are many claims made on the different savings that can be made by reducing paper processing within AP and AR. The simplest formula to evaluate your savings potential is that on average your company will save between 0.5-2% of its annual revenues. For a €500m company that can range from €2,500,000 to €10,000,000. Source: Billentis, 2012
   2. Ten per cent of my annual revenuesTen per cent of my annual revenues
      
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   3. Eighteen per cent of my annual revenuesEighteen per cent of my annual revenues
      
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   4. Twenty five per cent of my annual revenuesTwenty five per cent of my annual revenues
      
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4. If audited by the local tax authority a company has to provide documentation to support its accounts. If you receive electronic invoices what do you need to prove:
    
   1. The invoice came from the named supplierThe invoice came from the named supplier
      
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   2. The invoice has not been tampered with or modified in any wayThe invoice has not been tampered with or modified in any way
      
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   3. All of the required data fields are on the invoiceAll of the required data fields are on the invoice
      
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   4. The correct tax amounts are shown for each line itemThe correct tax amounts are shown for each line item
      
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   5. That the process I employ can prove all of the aboveThat the process I employ can prove all of the above
      
      Correct. As the receiver of the invoice you are not technically responsible for proving any of these criteria, but the process that you employ must do this. This may seem a pedantic point but the law states that the issuer of the invoice is responsible for a-d above. To place the burden of compliance on suppliers (especially if a small business) would stifle e-invoicing adoption and reduce potential cost savings, so many large corporates employ third party companies to provide e-Invoicing software and services thus ensuring that both trading counterparties are compliant when sending and receiving invoices.

 

5. Your company uses EDI to send and receive electronic invoices to and from all of your domestic and international customers. Which of the options below gurantees the authenticity and integrity of your EDI invoices?
    
   1. Print a paper copy of each invoice you send/receivePrint a paper copy of each invoice you send/receive
      
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   2. A properly managed process, including data validation, authenticity & integrity & archivingA properly managed process, including data validation, authenticity & integrity & archiving
      
      Correct. EDI is the most consistent form of electronic invoicing across Europe as authenticity and integrity is engrained within a value added network (VAN), Regulations defined by organisations such as the ICC and GS1 have been in place since 1994 (1994/820/EC) to clearly define what a compliant EDI process for e-Invoicing is, and this has been agreed by all EU member states. However not all companies implement this process efficiently and others prefer to print paper copies of invoices and retain them for tax audits.
   3. Store the paper copy of each invoice you send/receive in an archiveStore the paper copy of each invoice you send/receive in an archive
      
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6. I know that I have to keep a human readable copy of EDI invoices for a certain number of years. Which of the following invoice storage methods are considered to be tax compliant?
    
   1. Storing paper copies in filing cabinetsStoring paper copies in filing cabinets
      
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   2. Storing EDI invoices in an electronic archiveStoring EDI invoices in an electronic archive
      
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   3. Storing PDF copies of EDI invoices in an electronic archiveStoring PDF copies of EDI invoices in an electronic archive
      
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   4. All of the aboveAll of the above
      
      Correct. All three of methods are acceptable to most tax authorities, however, storing paper copies negates the cost savings offered by electronic invoicing. Also, if your company is saving EDI invoices in an electronic archive they must be presented to the tax authorities in a human readable format.

 

7. When sending/receiving electronic invoices, which of the following optionsshould be your primary concern:
    
   1. Security of the informationSecurity of the information
      
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   2. Compliance with local tax authority regulationsCompliance with local tax authority regulations
      
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   3. Cost savingsCost savings
      
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   4. All of the aboveAll of the above
      
      Correct. You should be concerned about all three. While security of information is not part of tax compliance, it is a best practise to always keep sensitive information secure. If your company embarks on an e-Invoicing programme it does have to consider the different tax compliance laws for each country in which it does business. The cost savings offered by electronic invoicing, with an average ROI of between 6-18 months, offer compelling reasons for you to adopt this approach.