E-invoicing compliance

E-invoicing compliance ensures that your companies inbound and/or outbound invoices meet the legal, technical and tax standards set by the countries you operate in. 

Maintaining compliance is essential because it prevents fines and operational disruptions and ensures invoices are processed smoothly.

Non-compliance can lead to significant delays in transaction processing and impact your relationships with customers and suppliers. Staying compliant helps your business operate securely and efficiently in a global marketplace.

Digital Reporting Requirements (DRRs) are regulatory mandates established by tax authorities and governmental bodies that require businesses to submit financial and tax-related data in specific digital formats. These requirements aim to enhance tax compliance, improve the accuracy and timeliness of financial reporting and streamline auditing processes. 

DRRs typically involve the electronic submission of detailed financial information, including transactional data, using standardized digital formats and specific file structures. 

By implementing DRRs, tax authorities can more efficiently analyze data, reduce tax evasion and minimize the administrative burden on both businesses and government agencies. These digital reporting systems often demand more granular data than traditional tax returns and may require submissions on a regular basis, such as monthly, quarterly or annually. 

As governments worldwide increasingly adopt digital strategies for tax administration, DRRs have become a crucial component in modernizing financial reporting and ensuring greater transparency in business operations.

Continuous Transaction Controls, or CTCs, are mechanisms where tax authorities receive transaction data in real-time or near-real-time to verify compliance.

This setup impacts business operations by adding an extra compliance step in the transaction process, which can sometimes involve pre-clearance before finalizing invoices. Read our blog article for more information on different types of CTC models implemented throughout the world.

CTCs offer benefits, such as increased transparency, but they can also introduce delays if your systems aren’t optimized for real-time reporting. An automated compliance solution like ours can help you meet these requirements seamlessly.

E-invoicing and CTCs are both mechanisms for managing transaction data but serve different purposes and operate in distinct ways:

• E-invoicing refers to the digital creation, transmission and processing of invoices between buyers and suppliers. Its primary goal is to streamline invoicing workflows, improve data accuracy, reduce paper use and enhance efficiency. E-invoicing is typically a requirement for businesses to adopt standardized digital invoicing formats, making it easier to process and manage invoices automatically across borders.
• Continuous Transaction Controls (CTCs) go a step further by involving tax authorities directly in the transaction process. With CTCs, tax authorities receive transaction data in real-time or near-real-time, often requiring pre-clearance of the invoice before it reaches the recipient. CTCs enable governments to verify tax compliance on an ongoing basis, minimizing fraud and ensuring accurate tax reporting.

In essence, while e-invoicing focuses on digitizing and improving the efficiency of invoicing between trading partners, CTCs emphasize real-time regulatory oversight by government authorities. Many countries implement both together, using e-invoicing as the foundation and CTCs to enhance compliance and transparency.

Digital Reporting Requirements (DRR) and Digital Continuous Transaction Reporting (DCTR) fall between e-invoicing and CTCs in terms of government involvement and real-time reporting.

• DRR refers to the obligation to submit standardized digital reports of financial data to tax authorities, usually on a periodic basis (e.g., monthly, quarterly). While this involves digital submission, it doesn't necessarily require real-time or transaction-by-transaction reporting.
• DCTR is a more frequent and granular form of reporting, where transaction data is submitted to tax authorities on a near real-time or very frequent basis. It's more detailed than DRR but typically doesn't involve the pre-clearance aspect of CTCs.

Many countries around the world now mandate e-invoicing, including countries in the EU, Latin America, and Asia, and each has unique technical and regulatory requirements. You can get a country-by-country breakdown of the laws in our publicly available Pagero Regulatory Atlas.

These requirements can include specific formats, data elements, digital signatures and approval processes. In some cases, invoices must be cleared by the tax authority before they reach customers.

Penalties for non-compliance vary by country but can include fines, delays or even the suspension of business operations in severe cases.

Some countries may impose hefty financial penalties on non-compliant businesses, while others may restrict business licenses.

Additionally, non-compliance can lead to increased scrutiny by tax authorities, affecting your reputation and relationships. Compliance is crucial to protect both your operations and your standing with customers and partners.

Pagero’s solution automates CTC reporting by sending transaction data to tax authorities as required, ensuring that all transactions meet compliance standards before being finalized.

Automation simplifies what would otherwise be a manual, time-intensive process and helps avoid delays due to non-compliance.

Our e-invoicing compliance solution is designed to handle real-time or near-real-time reporting requirements, keeping transactions moving smoothly. By integrating CTC compliance into your workflows, Pagero ensures you can operate smoothly under stringent controls.

Pagero’s e-invoicing compliance solution is built to handle the complexity of multi-jurisdictional requirements, automating updates and adjustments as regulations change.

Our Regulatory Affairs team continuously monitors each jurisdiction for regulatory updates. New specifications are then integrated into our internal format, enabling over-the-air updates that have no impact on your workflows.  

By centralizing compliance management, Pagero lets you handle diverse requirements for different countries all in one place. The solution also integrates with your existing financial systems, making compliance a seamless part of your invoicing process. With Pagero, you reduce manual work and gain confidence that your business is meeting local mandates everywhere you operate.

Pagero’s e-invoicing compliance solution integrates with any ERP, allowing compliance to be handled without disruption to your current processes. Our flexible integration offering goes well beyond ERPs, however. We connect to any source system you designate, be it your CRM, workflow, tax technology, billing system or middleware. 

Yes, e-invoicing and CTC requirements do impact accounts payable (AP) processes, and our AP automation solution is designed to help you manage these changes smoothly. In countries with e-invoicing and Continuous Transaction Controls (CTCs), AP departments often face additional steps, such as validating incoming invoices for compliance before processing, and ensuring that data accuracy and regulatory standards are met before payment.

Our e-invoicing compliance solution supports these needs by integrating directly with your AP systems, allowing incoming invoices to be validated, enriched and pre-cleared if required by local regulations. This ensures that all invoices are compliant before they enter your workflow, reducing the risk of delayed payments, penalties, or errors.

By automating compliance checks and data validation, we help keep your AP processes efficient, accurate and compliant, allowing you to focus on strategic tasks while staying up-to-date with evolving regulatory demands. With Pagero, your AP team is fully prepared to meet the requirements of a changing compliance landscape.

Pagero's e-invoicing compliance solution supports a vast array of formats and standards to facilitate seamless electronic invoicing across various industries and regions. A sample of supported formats includes:

• cXML: A widely adopted protocol that enables buying organizations, suppliers, service providers and intermediaries to communicate using a single, standard, open language.

• PEPPOL BIS: A standard developed for cross-border public procurement within the European Union, ensuring interoperability and compliance with EU regulations.

• UBL 2.1: The Universal Business Language, a standardized XML business document format used globally for electronic commerce.

• Finvoice and TEAPPSXML: National electronic invoice formats in Finland, compliant with the European Standard.

This is just the beginning. Reach out to us for a comprehensive run-through of supported formats. 

At Pagero, we ensure compliance with country-specific e-invoicing requirements through a proactive and comprehensive approach:

• Direct collaboration with local authorities: We actively engage with governmental bodies and regulatory agencies to obtain accurate and up-to-date information on e-invoicing mandates.

• Continuous updates to internal formats: Our team consistently revises our internal systems to align with the latest regulatory specifications, ensuring that our customers' invoicing processes remain compliant as regulations evolve.

• Direct connections to trading partners and authorities: the Pagero Network facilitates direct connections to other businesses, as well as to government portals and infrastructures. Our 2-step internal format performs validations and enrichments so e-invoices sent through the network match the requirements of the receiving party, whether that be a trading partner or a government. Pagero supports all CTC models. 

This approach allows us to provide a reliable, continuously compliant e-invoicing solution tailored to the specific requirements of over 80 countries. 

Our e-invoicing compliance solution is designed with security and reliability at its core. We adhere to rigorous data protection standards, including GDPR compliance, and hold ISO 27001/27701 certifications, among others, demonstrating our commitment to top-tier information security management.

With these measures, we ensure that your invoicing processes are secure, dependable and compliant across all jurisdictions.

Our comprehensive suite of resources and ongoing support keeps your business aligned with the latest in e-invoicing compliance:

• Regulatory Atlas: Our detailed, up-to-date resource provides information on indirect tax, continuous transaction controls (CTC), e-invoicing and e-archiving requirements across the world.
• Compliance Monitor: Stay informed with our monthly email updates on e-invoicing and CTC developments worldwide, ensuring you never miss a regulatory change.
• Country Compliance Reports: Request in-depth reports on specific markets to gain a clear understanding of local e-invoicing requirements.
• Compliance Alerts: Receive real-time information about regulatory updates in countries that you follow
• Center of Excellence: Our multilingual team of experts is ready to provide personalized guidance and support on e-invoicing and CTC compliance.
• Webinars: Experts from Pagero and our wide network of partners share intel on the lastest regulatory developments and trends.   
• Built-in compliance: We integrate compliance requirements directly into our technology, ensuring seamless adherence to local regulations.
• Compliance Library: Explore a holistic overview of e-invoicing and CTC requirements sourced from government authorities and interpreted by our own regulatory experts.   

These resources and services offer continuous support, keeping your business compliant and well-informed.