Ernst and Young warns EU SMEs not to ignore e-invoicing

June 3, 2011  |  Electronic Invoicing

tax 230x200European businesses should not adopt an “anything goes” attitude to invoicing while current European Union (EU) legislation does not force e-invoicing migration as tax authorities are catching on to the potential the payment method can bring.

The warning comes from professional services firm Ernst & Young in its Indirect Tax Briefing report dated April 2011.

When commenting on the EU’s 2010/45/EC VAT Directive, which requires paper and electronic invoices to be treated equally and as such does not impose e-invoicing on European businesses, Ernst & Young believes this should not lead to businesses adopting an “anything goes” policy nor should they want that. Rather they should ensure an appropriate level of business controls is in place.

“The key issue is being in control,” said the report”

“Merely issuing, sending, receiving and archiving .pdf invoices, without any additional measures, will not necessarily be sufficient. However, in our view, Member States will not longer be able to bar such formats if the appropriate business controls are in place.”

It is Ernst & Young’s view businesses should document not only their invoicing and archiving flows but also the measures that guarantee integrity and authenticity.

“Tax authorities are also starting to realise [invoicing] automation beings potential for more in-depth and more efficient audits through data mining,” said the report.

“This trend will only increase the need for VAT taxpayers to ensure their invoicing processes are accurate, well-documented and well-controlled.”

Source: Electronic Payments International

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  1. Equal treatment means that the same control methods used in paper invoicing can be used for e-mail and structured invoicing. Easy as that. Think small:

  2. Totally agree with this assessment - that’s why as a company we always recommend people use automation software that can handle paper, e-invoices and various other formats, such as ReadSoft PROCESS DIRECTOR.