Compliance Challenges for ”Legacy B2C” E-Commerce Solutions Moving into B2B

Sovos
April 6, 2017

This blog was last updated on September 23, 2019

We are seeing a lot of vendor scope evolution on the market. Examples include EDI vendors that are developing business network-style services; another one is that platforms focused on procurement of indirect supplies are moving into strategic sourcing and vice versa.

A trend that receives less attention from analysts and specialized press is the journey that many e-commerce and associated payment platforms have started toward embracing B2B transactions.

Historically, e-commerce vendors have designed their capabilities for the generation and management of receipts and invoices for consumers. Such B2C invoices are often not, or only mildly, regulated. In most countries, significantly more complex legal (and in particular VAT) requirements apply to B2B invoices. Limitations of these consumer-focused solutions may include: incomplete invoice content, insufficient integrity and authenticity controls as well as limited legal archiving functionality.

Adding to the challenges of legal compliance, the invoicing process in terms of supported invoice formats, delivery channels and archiving (in many cases limited to web-publishing or e-mail of a PDF invoice combined with only temporary storage) are often insufficient for more demanding business users.

The compliance limitations can lead to significant VAT exposure for both merchants and their clients. In a world quickly moving to real-time tax controls, compliance shortcomings in individual invoices will also be much more visible towards authorities. In addition, the technical limitations often lead to sub-optimal automation and unnecessary costs.

It’s time the e-commerce industry took a good look at the compliance measures that B2B automation vendors have had to adopt to survive in the past decade in order to be prepared for the one to come.

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Author

Sovos

Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
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