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Electronic invoice 2023: an obligation that has its advantages

What are the benefits of switching to electronic invoicing for businesses?

Published on May 11, 2021
Reading time: 3 min
Maud Tezenas du Montcel

Since January 1, 2020, all companies working for the State are required to use electronic invoicing via the Chorus Pro platform. 

This new standard will soon be applied to business-to-business payment processes, as from 2023, all companies will be required to accept electronic invoices. Then, in 2025, they will have the obligation to issue their invoices in this same format. Note that the transition to electronic invoicing will be gradual, and that large companies will be subject to this obligation starting in 2023.

Why such a change? This new directive aims to simplify VAT controls and limit fraud. Indeed, some data contained in electronic invoices will also have to be transmitted to the tax authorities for VAT control and pre-declaration. 

The timetable for electronic invoicing

In November 2020, the Directorate General of Public Finance (DGFIP) submitted its report "VAT in the digital age in France", which focuses on the development of electronic invoicing. It is part of a long process, initiated several years ago at national and European level. 

When will e-invoicing be the new standard for all companies? The changeover will be conducted over a two-year cycle. As of January 1, 2023, large companies will have to adopt e-invoicing. Small and medium-sized companies will follow on January 1, 2024, and then VSEs and SMEs on January 1, 2025. 

To prepare for this transition, the description of the technical and legal prerequisites at the IS level is expected in September 2021, by way of an ordinance.

The benefits of e-invoicing

Before we look at the expected benefits of e-invoicing, let's take a quick look at the semantics. Regulators differentiate between electronic invoices and dematerialized invoices. The latter are digitized paper invoices, sent in PDF format. They are not considered as electronic invoices.

Electronic invoices, or e-invoices, are created, sent and received in electronic format, using a digital tool. They must meet 4 criteria: authenticity, inalterability, readability and archiving (10 years). 

If electronic invoicing is imposed on financial departments to facilitate the fight against VAT fraud, it still has many benefits for companies. 

Electronic invoices, or e-invoices, are created, sent and received in electronic format, using a digital tool. They must meet 4 criteria: authenticity, inalterability, readability and archiving (10 years). 

If electronic invoicing is imposed on financial departments to facilitate the fight against VAT fraud, it still has many benefits for companies. 

Security and fight against fraud 

Electronic invoicing guarantees a more efficient fight against VAT fraud, thanks to the access to secure and reliable information. The obligation to opt for a standardized format for invoices, and the mandatory transmission of data will allow automated cross-checks between purchases and sales.  

More generally, the switch to electronic invoicing ensures the integrity of documents and their probative value. Your invoices are digitally traced and stored on secure servers over the long term. You can access all your archived invoices in just a few clicks, making it easier for you to close out your accounts or conduct a financial audit. 

Reduce costs on the billing cycle

Electronic invoicing helps companies to be more competitive by reducing the administrative burden of the invoicing cycle and the associated costs. 

According to a report by the DGFIP, companies could reduce the cost of processing invoices by 90%. 

Time and productivity savings 

This cost reduction is closely linked to the reduction of time spent on invoicing processes. In paper form, supplier invoicing is a long, unreliable process with little added value. 

Even when the process is partially digitized with the sending of PDF invoices, many steps are necessary to sign an invoice, with an inevitable recourse to printing, then scanning the document, to sign and validate the invoice. 

Finally, apart from this operational time saving, electronic invoicing improves the management of companies thanks to the simplification of administrative procedures. They also facilitate VAT declarations thanks to the pre-filling of information. 

Improved experience 

In addition to legal compliance by 2021, e-invoicing provides your employees and external partners, whether they are customers or suppliers, with an improved and simplified experience. 

It allows you to ensure a seamless and secure workflow that can be easily customized for each type of transaction. In addition, each party has real-time visibility into the progress of the billing process. 

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