7 e-Invoicing Compliance Best Practices

By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies 

Amalto-e-invoicing-complianceCompliance is making sure to follow the rules. Rules are clear. They’re written black on white on the websites of the Internal Revenue Service, the Secretary of State and the U.S. Securities and Exchange Commission, among other federal and state agencies. They can also be explicitly listed on your organization’s HR Handbook. However, an individual may think that s/he’s indeed following the rules, when in reality he or she’s complying with his or her own interpretations of what those rules are. That’s the kind of person who may ultimately find himself or herself being portrayed on American Greed or NBC’s Dateline a few years later. But, if compliance is handled properly, risk is likely to be mitigated, and a ten-year-old Ponzi scheme that ruined an entire rural community is all our TV producers have left to work with…

Now, what does e-invoicing compliance mean exactly? In other words, what does a business need to think about and actually do, prior to start e-invoicing its clients?

7 e-Invoicing Compliance Best Practices:

  • Accurate management of sales taxes and all other types of taxes, so the supplier doesn’t run the risk of incurring fines and penalties
  • Get the approval from the appropriate tax authority for switching from paper invoices to electronic invoices. Moreover, the e-invoicing application vendor may also have to report to the same authorities that it will be processing invoices electronically on behalf of a client
  • Respect of all format requirements and requirements associated to the authenticity and integrity of the documents involved in the automation process
  • Ensure that the content of all invoices and their respective follow-up correspondences (receipts, etc.) include all requirements as stipulated by the regulator, so those documents are indeed deemed valid for tax purposes
  • Proper archival of all e-invoices according to strict rules: What (information), where (servers’ location), and for how long (history). The latter pertains to local auditability rules (6 years back in the United States)
  • Guarantee that the e-invoicing solution vendor provides a service that fulfils its client’s tax and accounting compliance obligations, since using a third party’s application represents in no way a shift of liability towards the tax authorities
  • Require an external (and independent) e-invoicing compliance advisory report assuring the client that the e-invoicing solution provider’s interpretation of legal requirements will ensure the highest quality of services
Regulations change regularly. As a result, compliance is certainly the most important part of a business and therefore should not be taken lightly. If neglected, the consequences are dire.