is paper proposes a solution for secure, automated electronic invoicing that uses intelligent

PDF (ISO 32000) and Adobe® LiveCycle® ES (Enterprise Suite) server technologies. e

eInvoicing process, as developed by the CEN/ISSS Workshop on Compliance of eInvoices

has been used as a foundation and is compliant with respective European Union (EU) directives

and national value added tax (VAT) laws.

The importance of eInvoicing

As the world’s economies globalize, the pace of innovation accelerates, and the use of

electronic business processes grows, companies and policy makers are pressured to nd

new ways to remain competitive and to provide better customer service to end users and

constituents. Automation and simplication of business-to-business transactions through

the adoption of eInvoicing standards is critical for faster and more accurate processing,

reduced costs, greater business agility, and processes that meet compliance with tax and

other regulations. Automation also makes common tax verication activities less intrusive

and disruptive to core business activities.

eInvoicing oers signicant advantages over paper-based processes. Processing invoices

electronically may be as simple as sending and receiving invoices digitally, or as sophisticated

as delivering straight-through processing that eliminates the need for manual intervention

in common tasks. Suppliers avoid the costs of paper printouts, enveloping, and postage.

Faster transmission of the invoice and automated processing speed up account settlement.

Automated processes reduce opportunities for human errors that can have serious customer,

partner, or tax implications. By streamlining trade activities, eInvoicing fosters innovation,

competitiveness, and growth. e maintenance of electronic trade data in electronic formats

can streamline business reporting, electronic ling, and compliance-related tasks.

The European Union and eInvoicing

e EU faces unique challenges as it seeks to harmonise regulations for more than 25 member

states, facilitating innovation and productivity, trade, and growth. Central to the ow of

commerce within and between member states are paper-based invoicing processes that are

critical to the VAT system of EU countries. VATs represent 30% of revenue across the EU, and

electronic invoicing has been identied by the European Commission as a vital instrument

for harmonizing and simplifying VAT collection across borders and improving VAT-based

revenues by an estimated €40 billion annually through proper collection.

VAT is passed through the supply chain and ultimately absorbed by the end consumer of a

good or service. e input tax paid by a supplier is reclaimable or deductible from taxes owed.

Invoices are the cornerstone of this system because they establish and demonstrate a buyer’s

right to reduce his or her tax burden by the VAT paid on these purchases.

Applying best practices

for secure, automated

electronic invoicing

Using Intelligent PDF to support compliant

eInvoicing solutions

White Paper

Table of contents

1 The importance of eInvoicing

1 The European Union and

eInvoicing

2 eInvoicing process overview

3 Intelligent PDF solutions for

eInvoicing

6 Case studies

7 Summary

e economic benets of eInvoicing to businesses within the EU are signicant. More than

30 billion invoices are generated each year. e vast majority of this activity is paper invoices,

with an average cost of €30 per invoice. Early case studies show that a shi to eInvoicing in

EU countries can reduce invoicing costs by as much as 80%. For example, the savings from

the conversion of business-to-business invoicing alone within the EU is conservatively

estimated at €243 million annually.

Paper-based invoicing systems can be slow and error-

prone because as they require signicant human involvement, including handling and media

transfers from computerized systems to paper at the invoice’s source and back to the buyer’s

electronic systems. Tracking and correcting errors can add further delays and costs to

transactions. e cost of processing an invoice-related complaint typically exceeds €100.

e European Commission has set out a legal framework (Council Directives 2001/115/EC

and 2006/112/EC) for national regulations governing harmonized invoicing with regard to

VAT requirements. is framework is designed to encourage the universal reach of eInvoicing

across countries, sectors, and businesses, as well as inclusiveness, ease of use, and openness

to competition and choice of service providers. e framework stipulates a set of master data

elds that shall be incorporated in all invoices issued throughout the EU for VAT tracking

purposes. Additionally, it encourages the use of electronic invoicing, provided that the

authenticity of the sender and the integrity of content are guaranteed. e framework

recognizes the use of advanced electronic signatures, such as digital signature technology,

as well as other mechanisms based on the use of EDI systems. National tax legislation may

add further stipulations, such as dening retention periods for invoices by either or both

parties or requiring digital signatures.

eInvoicing process overview

Electronic invoicing systems must strive to deliver business eciencies through end-to-end

automations that permit straight-through processing and reduce costly errors and manual

processes while improving productivity. eInvoicing systems must ensure the integrity and

authenticity of data while complying with legal constraints and permitting auditors to conduct

their inquiries unfettered by technical impediments.

Figure 1 shows a typical electronic invoicing process. e following processing steps are

common to any deployment:

1. Prepare data—e supplier provides invoice data from online forms or directly from

back-end systems such as order handling or shipping.

Figure 1. Typical electronic invoicing process based on the best practice developed by the CEN/ISSS

Workshop on Compliance of eInvoices.

“The promise of eInvoicing is

to enhance economic vitality

by simplifying core business

processes. Software architectures

that enable straight-through

invoice processing utilizing

open standards such as PDF

will play a strategic role in

realizing that promise.”

Stefan Engel-Flechsig

Legal counsel and chairman

CEN/ISSS Workshop

on Compliance of eInvoices

BUYER

XML

CEN eInvoicing process

www.

E-mailInternet

SUPPLIER

DATA

Supplier prepares

invoice data.

Convert application-

specic invoice data

to XML.

Track invoice data and

manage data integrity and

authenticity.

Intelligent PDF and PDF/A create

an auditable trail that can be

accessed at any time. Buyers and

tax auditors can open intelligent

PDF les using free Adobe Reader.®

PDF

1. Prepare data 2. Convert raw data 3. Create intelligent

PDF invoice

4a. Archive invoice

4b. Send invoice

7. Verify and

process data

Data can be audited

RAW

XML

AUDITOR

Check and reconcile

against all the necessary

les available for invoice

handling.

XML

PDF