Beyond the E-Invoicing Compliance Debate: The Extension of Real Time Controls for Other Documents

Javier Carreras
July 20, 2017

Since e-invoicing became a legal possibility – first in the EU in 2001, then LATAM in 2002, and subsequently worldwide – there have been commentators warning the business community not to overlook the fact that e-invoicing is part of a broader interlocking transaction of documents and processes. Often followed by wise lessons about procure-to-pay or order-to-cash cycles, such observers in my opinion often overlook the reason why so many conferences, white papers, reports and policy initiatives have for the past 15 years singled out the invoice: because, historically, tax law had the same obsession with invoices. There is more invoice-specific indirect tax legislation than tax rules concerning all other transaction documents and processes taken together.

Compliance is more than just a compliant invoice

Naturally there’s more to business-to-business automation than the invoice; it would be grotesque to claim otherwise. And yes, many tax laws suggest or even explicitly state that there’s more to compliance than having a compliant invoice. Any expert will agree that the invoice, in that sense, symbolises the transaction process of which it is, essentially, a formal summary that intervenes at a critical moment: when the supplier determines that it is contractually entitled to claim the buyer’s counter performance to a supply of goods or services: payment. If the invoice appears correct but there is no trace of the underlying transaction it summarises, your formal invoice compliance will usually not suffice. All that is true; nevertheless, the fact remains that the invoice is central to indirect tax compliance, and the sheer amount of e-invoicing legislation largely justifies the attention that the many legal, practical and business consequences of this relatively new legal and e-business discipline have drawn.

An extension of real-time controls

At least, that was my opinion until recently. What we’re now seeing is that tax administrations are extending e-invoice compliance measures to other transaction documents. This is especially true in countries which have gone down the path of real-time invoice controls. In Mexico, salary statements must be ‘cleared’ just like invoices. In Russia, there are special additional transaction documents for goods and services invoices that are also thrown into the mix as well. Turkey just went down the path of adding similar controls for transport documents – something Portugal introduced a couple of years ago. And many countries are introducing real-time controls on point of sale cash transactions. What we’re witnessing here is the extension of real-time controls to many other types of business documents and processes.

Which brings me to the main question of this post: is it correct to keep talking about these trends as “e-invoicing”? In my view, doing so creates a false sense of security for HR, e-commerce, logistics and other business professionals who will be equally affected by this trend. Or worse, practitioners in these areas could start their own specialised best practices, policy and standards discussions around real-time controls without realising that the world of e-invoicing has been grappling with these problems for over a decade.

So what shall we call this emerging, all-encompassing field? Real-time transaction controls? We would be very interested in your suggestions.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Javier Carreras

Share This Post

North America Sales & Use Tax
June 1, 2023
3 Things to Remember if You Get a Sales Tax Notice

Have you ever received a sales tax notice from a state department of revenue? Whether you answered yes or no, there are important things to keep top of mind to help keep your business prepared. Finding out that you have failed to comply with one or more of your sales tax obligations can be startling. […]

North America Unclaimed Property
May 30, 2023
How to Set Up a Successful Unclaimed Property Program

Unclaimed property compliance can be difficult and overwhelming. Clients often ask what they should be doing to ensure they are compliant with the various laws and regulations. It isn’t easy, especially if you have multiple property types such as checks, credits or customer accounts that have the potential to become unclaimed property in multiple states. […]

North America ShipCompliant
May 30, 2023
How Hold At Locations Improve Your Customers’ Wine Delivery Experience

Direct-to-consumer shipping wine lovers enjoy the convenience of having their favorite vinos shipped to their front door. But what happens when, for whatever reason, they aren’t available to accept their wine deliveries? Whether they aren’t available during the day or they don’t have someone 21 or older available to sign for their package, these challenges […]

North America Sales & Use Tax
May 30, 2023
Identifying Sales Tax Liabilities and Why They Matter

By Steve Claflin, CLA It’s incredible that it has now been five years since the landmark Wayfair decision. It seems like just yesterday we were reading the case, alerting clients and tracking the ever-developing state guidance. Unfortunately, many companies still are not familiar with their sales tax filing obligations caused by economic nexus, or they […]

North America ShipCompliant
May 25, 2023
Out-of-State Breweries Gain Self Distribution, DtC Rights in Oregon

Under a settlement agreement, breweries located outside of Oregon now have more options for selling into the Beaver State, including direct-to-consumer (DtC) shipping and self-distribution to retailers. The settlement arose out of a lawsuit filed by a group of Washington breweries last year challenging Oregon laws that limited beer self-distribution to in-state breweries and DtC […]