PDF E-Invoicing

Dispelling the myths surrounding the use of PDF e-invoicing and compliance.

Is a PDF an e-invoice?

Often it is stated that PDF e-invoicing is not really electronic invoicing. In most cases this is not true. Consider the definition: ““…an electronic invoice should contain data from the supplier in a format that can be entered (integrated) into the buyer’s Account Payable (AP) system ….. etc”

When a PDF is produced directly from a billing application (which most are) it is ‘application generated’ and in almost all cases it will be a text PDF, within which the invoice data items are directly embedded. The PDF file carries the information and acts simply as a way for people to visualise the content.

Is a PDF any different to an XML or EDI file?

If the PDF has been application generated (i.e. not scanned) then the answer is simple: NO, there is no real difference.

A PDF’s ability to carry the invoice data, is no different to how an XML or EDI file carries data. The only real difference is the way the data is structured internally within the document.

An XML or EDI file ‘should’ comply with a particular industry schema – such as cXML or Tradacoms – whereas the structure of the PDF will comply with the schema as defined by the Accounting Application generating it (or unique to the supplier if they have ‘tweaked’ the invoice template).

On this point, it should be said that XML and EDI files suffer the same ‘supplier specific’ data structure issues that PDFs do. Although in theory they ‘should’ comply with a specific schema, the reality is somewhat different.

The sender’s view of how to represent invoice data in the schema, is very often different to the receivers view. Data items are placed into the wrong schema elements, that will ultimately require ‘cleaning up’ (i.e. re-mapping) at some stage of the process (usually done by the service provider).

Therefore, using the argument that data will be represented consistently the same way within an EDI and XML schema across many suppliers, is simply not true. Supplier specific mapping rules are needed to ensure consistent data structures are delivered to the receiver.

Are electronic signatures required for PDF and other e-invoices in Europe?

No. Since 1st January 2013, all EU members must afford the same legal status to electronic invoice processes as they do for paper invoices.

The EU’s intention is to create an environment where it is as straightforward as possible for all sizes of organisation to use e-Invoicing when trading with partners, both nationally and intra-EU.

E-Invoices and paper invoices are legally the same

Under the new rules individual member states can no longer impose conditions in relation to the use of electronic invoices. Instead, it is for an individual business to determine the method used. In this sense, paper and electronic invoices are now treated equally – the same process for paper invoices can be applied for e-invoices.

An emphasis on business controls

Each organisation may determine their way to ensure the authenticity of the origin, the integrity of the content and the legibility of the invoice. The primary (but not the only) method is the use of business controls to create a reliable audit trail between the invoice and the supply to ensure the authenticity of origin, integrity of content and legibility for all invoices, whether paper or electronic.

Business controls can mean different things to different people. However, for most organisations business controls are standard practice, which are already embedded within the purchase-to-pay and invoice-to-pay processes. Business controls are simply about creating a reliable audit trail between invoice and supply of goods or services. Something that most organisation already do as standard practice.

For more information on Business Controls, please refer to: “Good Practice: e-Invoicing Compliance Guidelines” by CEN (European Committee for Standardisation)

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