Invoice dematerialization: the ultimate guide
Digitalization is becoming more and more important in our daily lives, both personally and professionally: mail has been replaced by e-mail, shopping by e-commerce, books by e-books... The rise of digital technology has led to the dematerialization of many practices, and invoices are no exception to the rule. More practical, more economical, more ecological, the dematerialization of invoices offers many advantages.
Beyond these positive aspects, the dematerialisation of invoices will soon be a legal obligation: all companies are therefore concerned. This digitisation is accompanied by a certain number of specificities and constraints that should be known in order to start a successful transition.
What types of dematerialised invoices exist? What legal value do they have? How to make a successful transition to dematerialised invoices? This guide contains all the information you need to know about dematerialised invoices.
What is dematerialization of invoices?
There are in fact two kinds of dematerialization of invoices. Also, you should not confuse digital invoices with electronic invoices. These different processes of dematerialisation of invoices do not have the same characteristics but above all: not the same legal value.
The digitized invoice is the most basic form of dematerialization. As the name suggests, it consists of scanning a paper invoice so that it can be sent or stored in digital format. Although it facilitates access to invoices internally and shortens sending times, this solution for dematerialising invoices has no legal value. In the event of an audit, it is the paper invoice that must be presented. The digital invoice therefore offers a certain organisational advantage, but it does not make the invoice storage process any easier, or even duplicates it: the paper invoice must necessarily coexist with the digital invoice.
Electronic invoicing is the most successful method of dematerialization. It consists in digitizing the entire invoicing process. From creation to archiving and dispatch, all stages of electronic invoicing are dematerialised. And yet, this is not enough in itself. To ensure the legal value of these invoices, you must be able to guarantee: the authenticity of the sender, the integrity of the content and the legibility of the document. It is only on this condition that the invoice is considered as an electronic invoice, in accordance with Article 289 of the General Tax Code (CGI).
- date of issue of the invoice ;
- invoice number ;
- date of sale or service ;
- identity of the buyer ;
- identity of the seller or provider ;
- Purchase order number, if previously issued ;
- individual VAT identification number of the seller and the business customer ;
- designation of the product or service ;
- detailed breakdown of each product or service ;
- catalogue price and possible price increase ;
- VAT rate legally applicable and corresponding amount ;
- price reduction if any;
- amounts without and including VAT ;
- the date on which settlement is due.
The electronic invoice is then considered as the original invoice: this is the only solution for dematerialising invoices that allows the company to be completely paperless. The aim of this dematerialisation method is therefore to process electronic invoices that comply with regulations and therefore have a recognised legal value. The electronic invoice therefore replaces the paper invoice.
Read also : What is an electronic invoice?
Beware: it is not enough to send and receive PDF invoices by e-mail to be able to claim to be doing electronic invoicing! Respecting the principle of a reliable audit trail or the use of an electronic signature are crucial. Similarly, storing a PDF invoice on a Drive does not guarantee the legal value of the archive.
Document dematerialization vs. tax dematerialization
These 2 distinctions are in fact based on the difference between document dematerialization and tax dematerialization. While document dematerialization refers to the digitization of paper invoices thanks, for example, to an Automated Data Reading (ADR) solution, tax dematerialization concerns the creation and exchange of structured or unstructured files, respecting the principles of EDI (Electronic Data Interchange), electronic signature or reliable audit trail. In the first case, the paper invoice remains the reference document; in the second case, the standards guarantee the authenticity, integrity and legibility of the dematerialized invoice. You will have understood: only the electronic invoice is covered by tax compliant dematerialization and is guaranteed to comply with the legislation.
Good to know: the principles of EDI, electronic signature and reliable audit trail are each precisely defined in an official tax bulletin (BOI), which can be consulted on the internet. It is therefore easy to know if your practices are in line with the regulations concerning electronic invoicing.
The legal validity conditions of a dematerialized invoice
In order for an electronic invoice to be recognised as compliant by the law, the authenticity of the issuer, the good legibility and the integrity of its content must be guaranteed. To do this, there are 3 solutions:
- The electronic signature ;
- The reliable audit trail ;
- EDI, electronic data interchange.
Please note: electronic invoices must be kept for 6 years for tax law and 10 years for commercial law. It is therefore imperative to keep them for the longer period: 10 years.
Dematerialization of invoices: what does the law say?
What is the current status of the legislation?
For several years now, the French government has been working towards the widespread use of electronic invoicing. Under the impulse of international reforms of periodic and continuous controls of transactions (CTCs), the State seeks to fight against VAT fraud . In this context, the government is progressively adopting measures aimed at establishing electronic invoicing as the new standard for invoicing.
Since 2017, electronic invoicing has been mandatory for B2G (Business to Government), and only for this type of market. In the context of a commercial relationship between a private company and a public entity, electronic invoicing has therefore gradually become mandatory: first for large companies (more than 5,000 employees) on1 January 2017, then for medium-sized companies (250 to 5,000 employees) in 2018, for small and medium-sized companies (10 to 250 employees) in 2019 and finally, for very small companies (less than 10 employees) on1 January 2020. All French companies are therefore now obliged to deploy an electronic invoicing system for their commercial exchanges with the State and its authorities. This electronic invoicing is done via the Chorus Pro portal, set up by the AIFE (the French government's financial IT agency).
On a slightly different basis from B2G, electronic invoicing will be gradually made compulsory for business-to-business relations on the national territory. Thus, the process of dematerialisation of B2B invoices will extend from1 July 2024 to1 January 2026, making electronic invoicing mandatory for all transactions between French companies.
Electronic invoicing: the 2024 regulation
The Finance Act 2020 provides that all invoices for transactions between VAT taxpayers will be issued in electronic format by 2026. The data on the invoices will then be transmitted to the administration for control. These provisions will apply progressively, from1 July 2024 to1 January 2026, depending on the size and sector of activity of businesses.
Attention: Initially planned for 2023-2025, the generalisation of electronic invoicing was postponed at the Council of Ministers meeting of 15 September 2021. Here is the timetable finally adopted:
- 1 July 2024: Obligation for all to be able to receive electronic invoices.
- 1 July 2024: Obligation to issue electronically for large companies.
- 1 January 2025: Obligation to issue electronically for TSEs.
- 1 January 2026: Obligation to issue electronically for SMEs.
Dematerialization of invoices: what are the advantages for companies?
The first advantage of dematerialization of invoices (and not the least...), is the reduction of costs which results from it. If the cost of processing a paper invoice is 15 euros (according to Ernst & Young), the cost of an electronic invoice is 5 euros. Thanks to the electronic invoice: no more paper, no more printing, no more mail, no more archiving. The cost of invoice management is thus divided by 3!
Gain in speed
The dematerialization of invoices then allows you to gain in speed : the input and control are automated, the approval process is smoother, disputes are dealt with more quickly, suppliers are paid within a shorter period of time... Your employees thus spend less time on repetitive administrative tasks with little added value and can concentrate on more strategic missions. Studies estimate that the dematerialization of invoices can reduce processing time by 75%.
Securing the process
Paper means printing, scanning, sorting, archiving... All these manual steps can be a source of errors, or even of loss or damage to documents. In this respect, dematerialising invoices makes it possible to secure the invoicing process by automating operations and making storage more reliable. In addition, dematerialisation of invoices improves traceability Invoicing: validation circuits and automatic controls are put in place and guarantee the authenticity and reliability of the electronic invoice.
Improve customer-supplier relations
Another advantage of dematerialising invoices is that electronic invoicing improves relations between customers and suppliers. 70% of financial directors have noted a reduction in processing times. There are several explanations for this:
- The electronic invoice is transmitted instantly, no more delay in sending and no more loss in the mail;
- Some processing steps are eliminated (mail sorting, data entry, control...);
- Interdepartmental traffic is expedited;
- The traceability of electronic invoices allows the follow-up of the invoice processing status.
Thanks to these advantages, the sources of dispute between customers and suppliers are minimized and payment deadlines are optimized. So everyone is satisfied!
Taking action for the environment
Finally, the dematerialization of invoices allows you to reduce your carbon footprint: no more paper, no more printing ink, no more transporting mail... In this respect, the electronic invoice can be part of your CSR policy: the planet will thank you for it!
Dematerialization of invoices: how to choose your tool?
There are many solutions available on the market and not all are equal, especially from a legal point of view. Here is a list of criteria to take into account in order to choose your dematerialization tool.
A dematerialization solution that complies with regulations
In order to be able to say goodbye to paper, the invoice dematerialisation solution you choose must enable you to process electronic invoices that comply with the regulations . In this respect, you should be aware of one specific point: solutions based solely on LAD technology do not meet the regulations set by the government for 2024. While the details of the forthcoming regulations are not yet clear, the general principle already gives some certainty. What is certain is that, unlike LAD technology, your e-invoicing solution will have to allow, among other things
- Receive and process electronic invoices in a structured format;
- Check the consistency of data when invoices are entered into the platform;
- Guarantee the authenticity of the issuer, the integrity and readability of the data to ensure the legal value of the invoices.
A solution that automates the invoice entry and validation process
In order to take full advantage of the benefits of electronic invoicing (cost reduction, time saving, security...), make sure you adopt a solution that allows you to automate the invoice entry and validation processes. To do this, there are three essential points:
- Collection: choose a centralizing platform that takes into account many formats and deposit modes.
- Control: the solution must allow you to control the coherence and the presence of the data (compulsory mentions in particular), as well as the possible duplicates by taking into account the invoice numbers.
- Standardization: the solution must be able to provide you with invoices in a standardized format to save you time thanks to automatic integration by the ERP, or allow you to manage them directly on the platform.
A secure dematerialization solution for invoices
An essential criterion in the choice of your e-invoicing solution is the security of the process. Choose a secure solution that complies with the PAF (reliable audit trail) in order to legally guarantee the authenticity of the origin, the integrity of the content and the legibility of the electronic invoice. You will then benefit from opting for a device that automatically rejects non-compliant invoices: by sending an alert to the issuer of the non-compliant invoice, such a device will ensure optimal reliability. Finally, pay attention to the fact that your future dematerialization solution guarantees thelegal archiving of your electronic invoices. This device is indeed essential insofar as it guarantees the authenticity of a document so that it can have the status of proof in case of legal necessity.
A solution to improve supplier management
To improve your supplier management, choose a solution that includes the following features
- Dashboards of paid and upcoming invoices, in order to have a perfect visibility on outstanding invoices at any time
- Top suppliers in terms of amount and volume of invoices, in order to quickly identify risks and to assist in decision-making
- Invoiceprocessing status, so you can keep an eye on the progress of your invoices
- Supplier interface for invoice tracking, to help your partners and limit calls to the accounting department to find out the status of their invoices
- Free use for suppliers, to make your platform a community space
- Traceability at each stage of processing, to limit disputes.
A technological solution adapted to telework
Finally, in a context of widespread teleworking, it is important to be able to access your invoice dematerialization software from anywhere. To do this, choose a SaaS solution based on the latest cloud technologies. Adapted to teleworking, such a solution will ensure scalability and robustness. By choosing a "many-to-many" solution, you will benefit from a significant community effect for both suppliers and customers: no additional invoicing for you in the event of connection to new suppliers and no additional cost for the supplier. In all cases, prefer an iso-functional solution with Chorus Pro, both in terms of formats and protocols expected by the State for invoices and statuses. This is an essential point to ensure the durability of your solution.
The dematerialization of invoices via electronic invoicing is becoming the new standard for invoicing, especially from a legal point of view. In order not to be surprised by future regulations, it is advisable to prepare for e-invoicing obligations today, by adopting a dematerialization tool for invoices without further delay. However, there is no need to rush: it is essential to take the time to choose the right dematerialization tool for your invoices.
Freedz is a collaborative platform that brings together customers and their suppliers around the electronic invoices they exchange. Moreover, the electronic invoicing implemented by Freedz is in line with what the State expects for 2024.
It's not for nothing that we participate in DGFiP workshops on the subject 😉 By combining security, efficiency and accessibility, Freedz allows you to anticipate future regulations while simplifying your invoicing process now!
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