I don’t really like to start a article off with “101”. I really hope that it doesn’t turn anyone away, but I felt that it was time to go back to the basics.

E-Invoicing

E-Invoicing is one of those terms that people throw around a lot as a “catch-all”. It can be used to explain the software that receives invoices, as well as the invoice itself. It also describes an industry and the companies who provider software to get rid of the paper. So, it’s easy to understand that where confusion can come about when referring to e-Invoicing.

1^st – What Is It?

E-Invoicing or an e-Invoice in its purest form is referring to what was previously a paper invoice is now an electronic invoice. I don’t think I just broke great literary ground with that last statement, but what comes next is where the confusions start.

What Is It Really?

The term “electronic” is where the problems seem to start. There is no real standard for electronic, so it greatly depends on what your service provide, that’s the company that provider your company with accounts payable automation software, defines as electronic. Here are few examples.

• EDI – Electronic Data Interchange. This is a very old form of electronic invoices that is expensive to set up and expensive to maintain. However, you will see this form in a lot of manufacturing companies. You have to make sure your service provider can send and receive EDI information.
• Electronic Formats – This is the most common form of electronic invoice, and the service provider you pick will need to be able to receive and convert these formats into an invoice. The most common version of the electronic formats are XML, CSV and TXT. Your service provider may have a preferred format as well as a preferred structure which is commonly known as a schema… you should ask if they have a schema.
• PDF – Portable Document Format. As the name implies a PDF is an image and not text. This is the most commonly misused form of an electronic document. You really have to know your service providers capabilities when it comes to PDFs. Some providers will require you to print the PDF upon receipt (this goes for other images too, like TIFF, GIF and JPEG) and scan it into the system which is not an electronic invoice at all.

I am sure you have heard the old saying that knowing is half the battle. Well, know what an electronic invoice is and isn’t is more than half the battle, and knowing can also save you a lot of time, effort and destroyed dreams.

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