What is E-Invoicing?
Electronic invoicing or E-invoicing is the automated creation, exchange and processing of request for payments between suppliers and buyers using a structured digital format.
Benefits of E-Invoicing
E-invoicing brings about benefits to businesses in the following area:
Cost reduction: moving from paper to electronic invoices eliminates or reduces several costs to businesses, such as invoice transportation, manpower costs and archiving. It also improves accuracy which saves in error correction costs.
Faster payment cycles via improved verification and validation: E-invoicing can accelerate invoice processing times by mandating that “required fields of information” are completed before e-invoices are sent. This would allow validation to be speedily completed and payment to be released. With the further application of rule-based processing (including the potential for artificial intelligence), human intervention could be further reduced and processes speed up.
Access to new financing options: E-invoicing allows for accurate and real time visibility of the status of payment cycles, enabling more efficient cash flow management for business sustainability and growth planning. E-invoicing also has the potential to enable supply-chain financing in near-real-time, facilitating greater efficiency and transparency that could increase working capital and liquidity.
Leveraging data analytics: Businesses that migrate to e-invoices can use data analytics to help identify potential fraud or human errors, and AI-enabled solution could further enhance such activities and extend benefits across large volumes of transactions quickly.
Business-to-Business (B2B) Benefits: While there are already significant motivations for businesses to adopt e-invoicing, e-invoicing also has the potential for wider B2B ecosystem benefits. Some of these include development of new services (e.g. advanced accounting services) and ecosystem multiplier effect.
The open standard “Pan-European Public Procurement On-Line (PEPPOL)” will be adopted to provide standards-based mechanism of exchanging invoices in structured format. The PEPPOL standard is maintained by OpenPEPPOL, a non-profit international association. It was conceived in the European Union in 2008, with OpenPEPPOL established in 2012. It has 277 members from 31 countries, with 176 Access Points in 19 European countries, Canada and the US, that serve to connect over 120,000 entities. PEPPOL conducted over 60 million e-invoices in 2017. Please visit PEPPOL’s website for more details.
IMDA has joined PEPPOL as the first PEPPOL authority outside of Europe, and the first country in Asia. As the PEPPOL Authority, the IMDA will be able to set national rules and specifications that meet Singapore’s domestic requirements, as well as appoint and certify Service Metadata Publishers (SMP) (colloquially called the address book) and Access Point (AP) providers. We will also ensure conformance to the PEPPOL technical and service standards.
Support from Government, Businesses and Technology Solution Providers
The Accountant General’s Department (AGD) will be working with IMDA to integrate Vendors@Gov into the nationwide e-invoicing framework. AGD recognises that by working with IMDA there will be a number of benefits for businesses, including:
Catalysing B2B transactions from the connect one, connect many effect with domestic and international benefits; and
Championing technological change in the business sector
AGD and IMDA will also be looking at how government procurement processes in conjunction with PEPPOL standards can be used to drive industry adoption of other common business messages.
The National Trade Platform will similarly support the nationwide e-invoicing framework as one of the key international standards for trade documents accepted on the platform, alongside other e-invoicing standards. Other agencies who will explore connecting their systems and processes include the Government Technology Agency (GovTech) and the Maritime and Port Authority of Singapore (MPA).
In the coming months, IMDA will put in place the e-invoicing framework for technology solution providers to join the network and bring on board their corporate customers. This will also include working out the details for awarding and certifying PEPPOL Access Point(s) and the Service Metadata Publisher(s). Interested parties are encouraged to refer to imda.gov.sg/einvoice or email email@example.com.