E-invoicing

Electronic invoicing (also called e-invoicing) is a form of electronic billing. E-invoicing methods are used by trading partners, such as customers and their suppliers, to present and monitor transactional documents between one another and ensure the terms of their trading agreements are being met. These documents include invoices, purchase orders, debit notes, credit notes, payment terms and instructions, and remittance slips.

E-invoicing includes a number of different technologies and entry options and is used as an umbrella term to describe any method by which an invoice is electronically presented to a customer for payment.

The main responsibility of the accounts payable department is to ensure all outstanding invoices from its suppliers are approved, processed, and paid. Processing an invoice includes recording important data from the invoice and feeding it into the company’s financial or bookkeeping systems. After the feed is accomplished, the invoices must go through the company's business process to be paid.

An e-invoice can be defined as structured invoice data issued in Electronic Data Interchange (EDI) or XML formats, possibly using Internet-based web forms. These documents can be exchanged in a number of ways including EDI, XML, or CSV files. They can be uploaded using emails, virtual printers, web applications, or FTP sites. The company may use imaging software to capture data from PDF or paper invoices and input it into their invoicing system. This streamlines the filing process while positively impacting sustainability efforts. Some companies have their own in-house e-invoicing process; however, many companies hire a third-party company to implement and support e-invoicing processes and to archive the data on their own servers.

Since the mid-1960s, companies began establishing data links with trading partners in order to transfer documents, such as invoices and purchase orders. Inspired by the idea of a paperless office and more reliable transfer of data, they developed the first EDI systems. These proprietary systems were fairly efficient, but rigid. Every set of trading partners seemed to have their own method of electronic data interchange. There was no standard that any trading partners could choose to adopt. Recognizing this, the Accredited Standards Committee X12, a standards institution under the umbrella of ANSI, moved to standardize EDI processes. The result is known today as the ANSI X12 EDI standard. This remained the main way to exchange transactional data between trading partners until the 1990s, when companies that offered more robust user interface web applications began to appear. These new web-based applications had functions that catered to both the supplier and customer. They allowed for online submission of individual invoices as well as EDI file uploads, including the CSV, PDF, and XML formats. These services allow suppliers to present invoices to their customers for matching and approval in a web application. Suppliers can also see a history of all the invoices they submitted to their customers without having direct access to the customers' systems. This is because all the transactional information is stored in the data centers of the third-party company that provides the invoicing web app. This transactional information can be regulated by the customer in order to control how much information the vendor is allowed to see.

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