An e-invoice is an invoice which is sent and received electronically. By using e-invoices companies minimize manual data entry and can track invoices more easily. Other reasons for using e-invoicing than traditional paper invoicing include the following.
In a typical scenario, the buyer purchases goods or services and the seller submits/sends an invoice to the buyer electronically. The buyer will receive the e-invoice into the system being used. The buyer then examines and verifies the accuracy of the invoice following which, the invoice is authorized and approved by the accounts payable staff. A workflow will then distribute invoices to the correct persons in the correct order. Approved invoices are posted and paid. The extent to which this process is automated depends on how much information (order number, account information etc) is available in the e-invoice.
There are different types of electronic invoices, with different levels of automation and integration:
Suppliers of e-invoice solutions can convert between different e-invoice standards and can transform paper invoices into specific electronic formats requested by the customer.
Invoice scanning means to capture, interpret and transform invoice information from paper to an electronic format. Invoice scanning does not involve eliminating the use of paper and therefore, it only results in partial gains.
Both invoice image and data from invoice scanning can be received into the system.
If a company does not have a financial system, or if the existing financial system cannot be used to send invoices electronically, it is still possible to send electronic invoices through an internet bank, customers’ web pages or third party web portals.
EDI (electronic data interchange) is an electronic transfer of data from one computer to another using an agreed structured format that can be generated and read by a computer and processed automatically. EDI is usually used in business relations with tight integration (an example is between parties in the automotive industry).
The EDI interface in IFS Cloud is designed to be independent of EDI standard and EDI translator. The message can be converted into several different message standards, where the conversion is performed by an EDI converter. MHS (Message Handling System) is used in a similar way as EDI, but it can only be used between companies or sites using IFS Cloud. You can use EDI or MHS media codes to send and receive EDI and MHS invoices from IFS Cloud.
XML (Extensible Markup Language) is a widely accepted way of sharing information over the internet in a way that computers can use, regardless of their operating system. There are numerous different XML invoice standards depending on the country, line of business, etc. One benefit of XML is that it offers easier and cheaper integration with business partners since it does not require EDI converters.
In IFS Cloud, invoice images and other attachments can be enclosed in sent and received XML invoice messages. You can use E-INVOICE media code to send and receive XML invoices in IFS Cloud.