To ensure globally compliant e-invoicing on an ongoing basis, you should keep a close eye on the following eight functional domains:
- Technical and legal document rules: Are there mandatory technical rules for the file format? What is the minimum required content for an invoice? Do you have means to ensure the correct calculation of all amounts that must be stated on the invoice?
- Reporting: Do you have to provide frequent reports of accounting information to the tax administration? Monthly, quarterly? Manually or automated? Do reports have to be in a specific technical file format? Do you have all the information required for a complete report?
- Integration with clearance systems: If you issue or receive invoices under the indirect tax laws of countries with ‘clearance’ rules, are your processes set up to provide the right information to the clearance point? Are you using the correct certificates, signatures or access credentials? Are you interfacing with the clearance point through a portal or via automated processes? Can you handle all error messages?
- Digital signatures: E-signatures are undoubtedly one of the few common denominators that enable implementation of a globally compliant e-invoicing process with a uniform base architecture. Whether these are mandatory or an optional means to meet integrity and authenticity requirements, do you have the capabilities to create the right signature format? Are private keys protected according to legal and corporate security rules? Do you have processes for certificate renewal? Note that in many ‘clearance’ countries, buyers must sign the payload in clearance point communications too.
- Compliant archiving: Are you archiving in the right location and for the requisite period of time? Are you making sure your archive meets rules for auditor access, legal entity separation, time-stamps and other requirements for each relevant country?
- Mandatory agreements and notices: Many countries have requirements such as buyer consent for receiving e-invoices and outsourcing of tax-relevant processes. You should pay particular attention to keeping these agreements and notices up-to-date as processes and trading relationships evolve.
- Trading partner integration: In some countries such as Turkey and Russia, the clearance point is actively involved in delivering the tax invoice to the buyer. Do you take this into account? Some European countries also require specific technical transmission setups for sending e-invoices to public buyers.
- Indirect tax determination: It’s increasingly important that you make correct choices regarding VAT percentages and associated notices that may need to be included in your invoices. Who’s responsible for this process, and how do you ensure you learn from feedback on errors? Note that VAT is very, very different from sales tax in this respect so your process for determining sales tax in the US cannot necessarily be extended to also work in countries with VAT.
Finally, when considering these points for globally compliant e-invoicing, it is critical that you should have a good understanding for each invoicing process, whether you are responsible for compliance in each domain or whether compliance assurance and compliance maintenance have been outsourced to a service provider.