Building Your Strategic Roadmap For Global e-Invoicing Compliance

By Paula Smith, Managing Director, Indirect Tax Technology Practice, KPMG LLP; Lauren Tallman, Global Invoicing Specialist and Senior Manager, KPMG LLP; and Christiaan Van Der Valk, General Manager, Indirect Tax, Sovos

When executives first encounter e-invoicing mandates, a common reaction is to assume their ERP systems can handle the requirements with minor adjustments.

While this assumption is understandable, it often leads to painful discoveries as implementation
projects progress.

ERPs are financial systems that manage a variety of company data, but they were never built to support tax. They were never designed as network endpoints.

This fundamental architectural limitation creates cascading challenges when retrofitting existing ERP systems for e-invoicing compliance:

1. Data quality and completeness: E-invoicing mandates often require extensive data fields, far beyond what most ERPs capture in standard configurations.
2. System landscape complexity: For multinationals with multiple systems, reconciliation becomes a significant challenge. Reconciling what is reported to the tax authority becomes a huge reconciliation exercise.
3. Manual intervention points: Organizations have built workflow processes to address this challenge, but these processes are too often manual and become problematic when real-time reporting or clearance is required.

The hard truth many organizations discover is that achieving e-invoicing compliance often requires a fundamental reconsideration of their entire system architecture, data strategy, and process design. This post explains why many existing ERP systems can’t handle e-invoicing requirements, provides a six-step strategic roadmap for implementation, and reframes compliance challenges as opportunities for innovation.

Your Strategic Roadmap for Global Compliance

When faced with the daunting task of global e-invoicing compliance, many organizations make the critical mistake of viewing it as merely an IT problem to solve. This perspective often leads to fragmented solutions that create more problems than they solve.

Instead, forward-thinking organizations develop a comprehensive strategy that acknowledges the interconnected nature of compliance, business processes, and technology infrastructure.

Here’s a roadmap:

1. Adopt the Right Architecture: Create a loosely coupled cloud environment where your business processes and compliance functions can operate independently yet work together seamlessly. This architectural approach provides the flexibility an organization needs to adapt to rapidly evolving regional requirements. Also, when putting together a plan of action, be sure to survey your needs and weigh vendor options. No single vendor can meet all your automation and compliance requirements in all countries, despite what they may claim.
2. Start with Assessment: Before implementing any solution, perform comprehensive assessments, including data quality assessment, fit-gap analysis, and system inventory mapping every data flow affected by e-invoicing mandates. It is essential to identify and address data issues with all existing systems.
3. Maintain Data Parity: Ensure you have the same real-time visibility as regulators. You don’t want to be in a position where you completely lose control over your data, and all you can do is accept whatever the tax administration defines as your tax liability.
4. Prioritize and Plan: Develop a clear roadmap prioritizing countries based on implementation deadlines, business volume, and complexity. It’s important to clearly outline the roadmap of what’s coming down the pipe, where immediate action is needed, and ensure a steering committee is in place to maintain that global viewpoint.
5. Foster Cross-Functional Collaboration: E-invoicing touches virtually every department: tax, IT, finance, trade & customs, and even HR. Establish a governance structure with representatives from each function to ensure all perspectives are considered and all requirements addressed.
6. Embrace Continuous Tax Data Management: Recognize that e-invoicing compliance isn’t a one-time project but an ongoing program requiring continuous tax data management. As requirements evolve and expand into new jurisdictions, strategies must adapt accordingly. It is important to stay ahead of regulatory changes to avoid the scramble to catch up.

The Opportunity Within the Challenge

Within this challenging landscape lie opportunities for forward-thinking organizations. Those who approach e-invoicing strategically—integrating compliance requirements into broader digital transformation initiatives—may discover
unexpected benefits.

The data standardization and process automation driven by compliance requirements can yield operational efficiencies, improve supplier-buyer relationships, and generate valuable business insights. Particularly in the adoption of frameworks like PEPPOL, electronic invoicing is driving innovation, advancing the digitalization of tax functions, and
enhancing process automation.

The global e-invoicing revolution is here to stay. Those who adapt strategically (developing comprehensive approaches that balance compliance, business efficiency, and data control) will not only ensure compliance but also discover unexpected opportunities for business process innovation along the way.

This post is the third of a three-part series based on insights from “What’s Going on Over There? The Global Impact of E-Invoicing Mandates on U.S. Multinationals,” a joint perspective from KPMG LLP and Sovos.

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