Tungsten Network launches ‘ComplianceCast’ – our new e-invoicing compliance podcast
The complexities of electronic invoicing mandates make it difficult for businesses to keep up with shifting compliance requirements and regulations. Governments across the world are introducing e-invoicing and e-reporting regulations which don’t follow one set standard. Companies operating across borders must be aware of changes to e-invoicing mandates, otherwise known as continuous transaction controls (CTCs).
To help businesses stay up-to-date with e-invoicing regulations, Kofax recently launched an e-invoicing compliance-focused podcast called ‘ComplianceCast’. This podcast will provide listeners with the latest news and information on CTC’s. In addition, episodes will feature interviews and insights from some of the leading figures in the compliance industry.
ComplianceCast is available to stream now here. Read on to find out more about this podcast series, and what to expect from the first two episodes.
Why is an e-invoicing compliance podcast needed?
As we exit a global pandemic and enter a cost-of-living crisis, many countries have implemented, or plan to implement, e-invoicing mandates as a way to close the VAT gap. The VAT gap is a term to explain the difference between the expected VAT revenue and the amount actually collected.
E-invoicing mandates control the way businesses send and receive invoices, and in many instances require invoices to be sent to the government before being sent to the buyer. To improve transparency and visibility of business operations, CTCs often include e-reporting rules which require certain data sets to be sent alongside the invoice using specific technology or platforms.
E-invoicing mandates differ from country to country, and are subject to extensions — this means the process can be changed at any time. CTCs affect every party in a typical payment cycle, from the suppliers to the buyers and the intermediaries.
It’s estimated that 50 new mandates, or extensions to mandates, will be implemented over the next seven years. With no standardisation in place, business owners have many changing compliance regulations to keep up with, particularly for businesses operating in multiple countries.
Luckily, ComplianceCast is here to ensure businesses stay updated on the ever-evolving e-invoicing landscape, critical to avoiding potential financial penalties and reputational damage. Read more here about the cost of non-compliance.
An introduction to e-invoicing mandates: what to expect in the first episode
In the first two episodes of ‘ComplianceCast’, Ruud is joined by Ellen Cortvriend who is a director at PwC and their COE lead for global e-invoicing and e-reporting.
E-invoicing mandates or CTCs can be complex to understand, particularly for those outside of Accounts Payable (AP) functions. That’s why these first two episodese are all about introducing e-invoicing mandates: explaining what they are, why they’re important, and how businesses can prepare. Below, we’ve listed a few of the topics discussed:
What is an e-invoicing mandate?
Ruud and Ellen start by providing listeners with a detailed explanation of e-invoicing mandates, including their function and how they’ve evolved over recent years. Previously, businesses would simply send an invoice to the buyer (with the possibility of a post-audit later down the line). Now, businesses must send the invoice to the government immediately before, or even instead of, sending it to the buyer. Without the right planning or partners, newly introduced processes can be a real operational burden.
E-invoicing mandates and technology/platform requirements
As well as imposing obligations to get approval for invoices or to report the relevant data, some governments are instituting a platform or portal to act as a middleman for invoices. These regulations mean invoices need to be sent to the relevant government entity before they can go to the recipient.
Ruud and Ellen discuss how this system means businesses must now become dependent on the government middleman to ensure their invoice is submitted to the buyer in a timely fashion.
Why are e-invoicing mandates being brought into place?
It’s clear that CTCs can be disruptive to business operations, so why are they being enforced at such a scale? The pair discuss the main driver for governments to implement mandates: combating VAT fraud and the under-collection of VAT.
Following the pandemic, and in the midst of a recession, governments are under more pressure than ever to close the VAT gap and prevent tax fraud. E-invoicing mandates hold businesses accountable and provide governments with greater visibility into their operations.
In addition, while e-invoicing adoption could be disruptive and costly to organisations in the short term, Ruud and Ellen discuss how digital transformation across AP functions could prove beneficial and actually save businesses money in the long run.
Which countries are enforcing e-invoicing compliance mandates?
In the opening episodes, Ruud and Ellen discuss how mandates were initially brought into place by countries with a large VAT gap. Italy, the first European country to enforce e-invoicing regulations, managed to close their VAT gap by around 2 billion euros. Now Romania (which has Europe’s highest VAT gap) is implementing very strict e-invoicing compliance measures. The list of countries that are introducing CTC’s is growing longer every day, and is only expected to continue rising.
How to prepare for e-invoicing mandates
As more and more mandates are being announced across the world, each with its own set of rules and reporting requirements, it’s imperative for businesses to be diligent. Ruud and Ellen explain how they always advise their customers ‘do not wait until rules are enforced, because then it will be too late’. Businesses need to have a proactive, centralised approach to dealing with e-invoicing. They also need to make absolutely certain that they use the mandates to their business’s benefit too, because if they don’t, it will be costly and disruptive.
Ruud explains how Tungsten Network helps prepare customers for e-invoicing changes, such as removing the need to connect to governmental platforms and reporting technologies. Businesses simply send Tungsten Network the data, it is then seamlessly transferred to the relevant authority and on to the buyer.
However, it’s still crucial for businesses to remain proactive and keep up to date with regulatory changes. Subscribe to the podcast to stay informed of all the latest news and happenings in e-invoicing compliance.