Einvoicing in Europe: A guide for 2024

Einvoicing in Europe

Delving into the world of e-invoicing in Europe, our guide explores the transition to digital invoicing, navigates through the continent's varied requirements, and introduces streamlined invoicing with a great billing platform.

1. Understanding einvoice in Europe

Definition of einvoice:

An eInvoice, or electronic invoice, is a digital version of a traditional paper invoice. It is a billing document sent and received in an electronic format, which facilitates the exchange of the invoice document between the seller and the buyer.

Unlike paper invoices, eInvoices are created, sent, and stored digitally.

Paper invoice vs. einvoice in Europe

Electronic invoices must contain specific details to meet compliance standards, mirroring the requirements of their paper-based versions. They should include at least:

1. A unique identifier for each invoice, commonly known as the invoice number.
2. The date the invoice is issued.
3. The date of the transaction or payment, often referred to as the "time of supply."
4. The supplier's and customer's names and addresses.
5. The supplier's VAT identification number.
6. A clear description of the products or services provided.
7. The unit price of the goods or services.
8. The volume or quantity of goods sold or services provided.
9. The applicable VAT rate.
10. The subtotal owed or paid, excluding VAT.
11. The total VAT amount charged.
12. Any discounts that have been applied to the transaction.

Certainly, details such as the VAT rate may differ based on the specific requirements of each European country.

Benefits of einvoicing:

E-invoicing is set to become a compulsory standard across Europe, with the expectation that other regions will adopt similar mandates. While it might seem like just another box to tick for businesses, but it’s an essential aspect of your success.

Embracing e-invoicing not only minimizes mistakes and refines the billing workflow but also presents numerous additional advantages for companies, such as:

1. Efficiency: Automating invoice processes speeds up workflows and frees up staff for other tasks.
2. Accuracy: It reduces human errors in data entry, leading to fewer disputes and higher customer satisfaction.
3. Speed: Invoices are sent and received faster, which can improve cash flow with quicker payments.
4. Security: E-invoicing often has better security features than paper, reducing fraud risks.
5. Tracking: Digital invoices can be easily monitored, improving financial management.
6. Regulatory compliance: Meets government e-invoicing mandates for tax purposes.

2. Einvoicing requirements in Europe

Overview of the European einvoicing standards

Since April 18, 2020, electronic invoicing (e-invoicing) has been a mandatory requirement for business-to-government (B2G) transactions in many regions, including the European Union. The eInvoicing directive mandates that all EU public administrations must be able to receive and process electronic invoices that comply with the European standard.

Each member state has been required to adopt and implement this directive within its own legal framework, which means there may be some variation in the specific rules and deadlines for compliance at the national level.

Here's the list of deadlines for e-invoicing in specific EU countries:

• France: Starting from 2026.
• Italy: Effective immediately.
• Germany: Starting from 2025.
• Spain: By 2024 or 2026, depending on the company's business.

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Country-specific requirements and variations within the EU.

The European Commission has updated eInvoicing Country Factsheets in 2023, which include details for Bulgaria, Croatia, Czech Republic, Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Portugal, Slovakia, and Spain.

These factsheets provide insights into each country's policy framework, eInvoicing platform, approach for receiving and processing electronic invoices, and monitoring of eInvoicing implementation.

Legal obligations for businesses regarding einvoicing

Businesses need to ensure that they are capable of issuing and receiving e-invoices that comply with the EU's standards and the specific legal requirements of the member state in which they operate.

This includes being able to process invoices in the standardized format and report them to tax authorities as required.

E-invoicing in the EU is complex due to varying national regulations and the need for up-to-date compliance. Businesses may find it burdensome to navigate these complexities, which include integrating technology, adhering to evolving laws, ensuring data security, and maintaining interoperability across borders.

3. Einvoicing tools and systems

Using a trusted  billing platform simplifies this by ensuring invoices meet current legal standards, offering technical integration support, reducing administrative workload, providing robust data protection, and scaling with business growth.

This allows companies to focus on their core activities while staying compliant with EU e-invoicing requirements.

Key features to look for in an billing (with einvoicing) system.

1. Compliance: Ability to stay compliant with local and international e-invoicing regulations.
2. Integration: Seamless integration with existing accounting and ERP systems.
3. User-Friendly interface: Easy to navigate and use without extensive training.
4. Automation: Capabilities for automating invoicing processes, from creation to payment.
5. Security: Strong security measures to protect sensitive data.
6. Support and maintenance: Reliable customer support and regular updates for long-term use.
7. Scalability: Can accommodate business growth and increased transaction volume.
8. Analytics and reporting: Advanced reporting features for better financial insights.

Comparison of different e invoicing tools in the market.

In our latest article, we dissect the e-invoicing software landscape of 2024, comparing top tools that offer automation, user-friendly interfaces, and seamless ERP integrations. Read the Billing tools comparison.

Now, if you want to take a closer look at how it works inside an e invoicing tool, we built a used case with Hyperline’s solution.

4. How to create an einvoice

Hyperline; an easy-to-use platform

1. Quick Setup:

• Register and log into your Hyperline account.
• Add your business details in the settings.

2. Easy Invoice Creation:

• Click 'Create Invoice' and select a client.
• Add items from your product list.
• Automate the process - your eInvoice is on its way!

Best practices for data accuracy and compliance

• Tax settings are pre-configured to comply with regulations. You don’t have anything to do.

Automation and streamlining the invoicing process

1. Recurring billing:

• Set up once for automatic recurring invoices.
• Notifications keep you informed about sent and paid invoices.

2. Integration simplicity:

• Connect Hyperline with your accounting software.
• Synchronize data effortlessly, reducing manual input.

Try Hyperline.

Conclusion:

In Europe, e-invoicing is not just a convenience; it's a strategic move towards greater efficiency and compliance with evolving digital standards.

Embracing digital transformation in invoicing is now essential for businesses to stay competitive and maintain financial clarity. Hyperline offers a streamlined, user-friendly platform to modernize your invoicing systems with ease.

Take the step forward with Hyperline and transform your e-invoicing approach today.