A crucial part of running any business is getting paid at the right time, in the right way. This is made possible through a process known as invoicing. Typically, companies issue invoices to their customers as a formal request for payment, either as paper documents or as digital files.
Traditional paper documents, however, pose environmental issues and are more cumbersome to handle. Their digital counterparts, like PDF and Word documents, aren’t a perfect solution either. Information on these digital files still needs to be entered into invoicing systems manually, a process that is both time-consuming and error-prone.
Indeed, the SME Financing Survey conducted in 2017 by Enterprise Singapore revealed that paper-intensive and manual invoice settlement processes are common inefficiencies faced by local companies. Notably, manual invoicing may lead to delayed payments, and even an increased susceptibility to fraud given the multiple stages an invoice goes through.
This is where electronic invoicing, or e-invoicing comes in. To debunk a common misunderstanding - an invoice in a digital format is not necessary an e-invoice. An e-invoicing network carries out the exchange of e-invoices directly across systems without human intervention. Keen on switching to e-invoicing? Read on to find out how.
In Singapore, many SMEs have cited late payments as a serious concern. According to the same survey from Enterprise Singapore, 64% of over 1,800 respondents faced delays in receiving payments from customers.
E-invoicing could help alleviate this pain point, according to Mr Geok Seong Wah, Director of the Infocomm Media Development Authority’s (IMDA) E-invoice Project Office. “[E-invoicing] will enable companies to directly transmit invoices from one financial system to another, [allowing] businesses to speed up [their] invoicing processes, which results in faster payments.”
But beyond increasing speed and efficiency, e-invoicing could also allow businesses to access new financial options. Compared to manual methods, e-invoicing provides a more robust and accurate oversight of payment commitments. This information could help businesses grow in a more sustainable manner by encouraging better cash-flow management.
Given the rising public concern over environmental issues, businesses looking for environmentally friendly alternatives could also turn to e-invoicing. Aside from minimising paper waste, e-invoicing also eliminates storage and retrieval needs, further reducing operating overheads.
Setting up for success
In 2019, IMDA launched the Nationwide E-Invoicing Initiative to encourage businesses to move to e-invoicing. To join this nationwide e-invoicing network, businesses must first identify a suitable service provider. For instance, those interested in basic e-invoicing capabilities may opt for free solutions , while others can turn to paid, cloud-based systems found on this list. Meanwhile, larger organisations with in-house enterprise systems can get in touch with Access Point Providers to connect their systems to the network.
With so many service providers to choose from, it may be difficult to figure out which solution is best fitted. Here, we recommend comparing the features that each service or solution brings to the table, and assessing key features which directly benefit your business. For example, SESAMi users can gain access to their e-Sourcing solution, which lets companies receive alerts and respond to relevant tender opportunities. DataPost, on the other hand, offers value-added services like invoice financing and QR code generation for their users.
Upon subscription to a Peppol-ready solution provider, simply follow the steps from your solution provider to register on the Peppol Global Directory, the network which facilitates the exchange of e-invoices. Active businesses registered in Singapore before 25 March 2020 and are on the e-invoicing network via a Peppol service provider before the end of this year will be eligible for IMDA’s E-Invoicing Registration Grant, which provides businesses with a one-time payout of $200 disbursed through PayNow Corporate.
Sending your very first e-invoice
Once your business is on the network, it’s time to figure out how to send or receive your first e-invoice. Fortunately, many service providers have prepared comprehensive tutorials to help new users out upon registration. To give e-invoicing a try, follow these steps to send a sample invoice to yourself.
First, create and send an e-invoice (using your service provider’s instructions) to the Peppol/Recipient ID 0195:SGECHOTEST01. This ID is a special account on the network that will return or “bounce” its incoming invoice through a specified e-mail address, returning a copy back to your specified email address stated in the Invoice ID or Remarks/Notes field. It’s that simple!
For businesses transacting with the Singapore Government or its agencies, please refer to this guide prepared by the Accountant-General’s Department on how to do so and the requirements to comply with.
Still doubtful about e-invoicing? These testimonials from local businesses could change your mind.
“The nationwide e-invoicing network [has made] it easier for us to send invoices… [improving] productivity and reducing costs in managing our invoices.”
– Mr Effendy Chearles, Director of ELGONET, a Wi-Fi solution provider.
"Mapletree is happy to be onboard IMDA's nationwide E-invoicing network as an early adopter in the private sector. It allows us to streamline our invoicing process by implementing direct exchange of invoices over Peppol network to improve business efficiency. This is an important factor as we expand our business globally. Also, we can be greener as it helps to reduce paper use and wastage from the printing of invoices."
– Mr Neo Sing Hwee, Head, Operations System & Control, Mapletree Investments Pte Ltd
E-invoice is now InvoiceNow! To find out more about InvoiceNow and join the network, register for IMDA’s monthly business briefing webinar—available in English and Mandarin—here!