E-invoicing in the UK is in full swing. Would you happen to know what this means? Well, it implies that you have every reason to be excited as a business owner.
Do you do business with the government? Great! The UK e-invoicing directive means you can invoice the government in real time! Yes. That’s right! Now, you don’t have to wait for weeks to get paid. And that’s not all there’s to e-invoicing in the UK.
What E-Invoicing in the UK Means for e-Procurement
The world is moving toward digitizing business processes from purchase to payment. The European Directive on electronic invoicing in public procurement offers a host of benefits in the public sector, including;
Massive Cost Reduction
It costs an estimated £13.98 to process a paper invoice. The cost of processing an electronic invoice is £4.77. Public organizations that ditch paper invoices for e-invoices can save at least 1 to 2 percent of their turnover.
According to the UK National e-invoicing forum’s findings, switching from paper to electronic invoicing for every 60,000 suppliers can help save a whopping £ 500,000! Now that’s quite something!
A full-time employee in the public sector can process about 24,500 paper invoices per year. This number increases to 43,000 for e-invoices.
Adopting e-invoicing in the public sector can increase its finance employees’ productivity by up to 50 percent!
Reduced Errors and Duplications
One of the most significant disadvantages of using paper invoicing is the possibility of making many errors and omissions, leading to delayed payments.
With the adoption of electronic invoicing, however, errors and omissions are now a thing of the past in public organizations due to the automation of the e-procurement process. No more manual keying of data, reducing human mistakes.
What E-Invoicing in the UK Means for the Private Sector
Private businesses and companies in the UK can enjoy a raft of benefits by switching to e-invoices. B2B e-invoicing can help streamline transactions in several ways, including;
Structured Data for Auditing
HMRC supports EDI. Do you know the impact this has on businesses in the United Kingdom?
Businesses and companies can conduct accurate financial audits and digitally submit their VAT tax returns to HMRC, hence always remaining tax compliant.
On that note, check out the “Make Tax Digital” campaign to learn how to stay on top of your tax returns and the HMRC electronic invoicing guide on all acceptable e-invoice formats.
Security and Rapid Dispute Handling
The best e-invoicing solutions offer digital signatures and are hosted in the cloud. That way, you can be sure they’re authentic and safe.
With the right software, your invoices are safe from fraud and manipulation. Further, e-invoicing allows archiving of invoices, which means you can quickly retrieve an invoice for fact-checking in case of a dispute with your trading partner.
What The UK E-Invoicing Directive Means for Suppliers
The e-invoicing regulations in the UK allow suppliers to get paid on time. Why? Well, because it takes less time to approve invoices.
Note – Of the 5.7 million SMBs in the United Kingdom, 39 percent think that lack of technology is the reason for paying their suppliers late.
Apart from the businesses highlighted above, e-invoices;
Improve Traceability of Orders
Since the invoice data is in the cloud, suppliers can keep track of orders at the click of a button. That way, both suppliers and buyers can collaborate over an invoice, leading to improved business relationships.
Increase in Sales Opportunities
Quicker payments mean you have a better cash flow. By extension, this implies that you have readily available funds to take more orders and, most importantly, deliver on time.
Want to dig deeper? Here’s an article that discusses the benefits of e-invoicing for the government and businesses.
How Did We Get Here? eInvoicing in the United Kingdom – The EU Directive 2014/55/EU Timeline
The pursuit of electronic invoicing in the United Kingdom started in 2009 when the European Commission requested member countries to create formal e-invoicing forums by 2011.
In 2010 the UK National e-invoicing forum was formed and tasked with the responsibility to fast-track the adoption of e-invoices in the United Kingdom.
In 2015, the Small Business, Enterprise, and Employment Act became law. The act recognized e-invoicing as a tool that can benefit the United Kingdom economy.
In May 2019, the UK government finally implemented the EU directive on e-invoicing for public procurement via Public Procurement (Electronic Invoices, etc.) Regulations 2019.
Anyone involved in public tender procedures must receive and process supplier invoices that follow an e-invoicing standard established under the Directive.
Public sector organizations and bodies must adopt electronic invoicing, including central government agencies, the NHS, and local authorities.
More About The UK Government e-Invoicing Standards
Sure, The Public Procurement (Electronic Invoices, etc.) Regulations 2019 outlines the basic rules for parties getting into contracts with public organizations in the UK.
But, new separate regulations are in force in different parts of the United Kingdom. Here are the most territory-relevant legislations that any supplier entering into contracts with government agencies should know.
- The Public Contracts Regulations (PCR) 2015, The Utilities Contracts Regulations (UCR) 2016, and The Concession Contracts Regulations (CCR) 2016. These are applicable in England, Northern Ireland, and Wales.
- Electronic Invoicing (Public Contracts, etc.) Amendment (Scotland) Regulations 2019. This legislation sets up the e-Invoicing requirement in Scotland.
- The Scottish government is pushing for the adoption of eInvoicing. The goal is to ensure that every organization in the county’s public sector shifts to electronic invoicing.
- In Wales, the National Procurement Service (NPS) is behind a strategy called eProcurement Service (EPS) to push for adopting e-invoicing in the Welsh public sector.
The next question becomes;
Why is the United Kingdom government pushing for the mandatory adoption of electronic invoicing?
The primary reason behind the call for compulsory e-invoicing in the UK is to introduce a standard invoicing format acceptable across EU countries and encourage brisk cross-border business.
The ripple effect is a more straightforward, cost-efficient way of doing business between suppliers and buyers across Europe and, by extension, worldwide via PEPPOL.
What You Need to Do to Shift to e-Invoicing in the UK
Any serious public organization or business in the United Kingdom should adopt electronic invoicing. The benefits of ditching paper invoices are clear. Besides, digitizing how you do business in this era of cut-throat competition makes perfect sense.
So, what do you need to start sending e-invoices in the UK? Also, could you tell me what you need to begin receiving e-invoices in the UK?
Your journey toward e-invoicing starts by identifying a reputable, experienced, reliable, and authorized UK-based EDI provider.
Remember, choosing the right e-invoicing solution can mean the difference between improving your payment processes and a frustrating experience.
After you’ve identified a good EDI provider, you can now roll out e-invoicing to your trading partners in phases as you seek to build terms and conditions that work for your business.
Unimaze Can Help You Transition to e-Invoicing in the United Kingdom.
Combining a wealth of experience, Unimaze is a UK-based EDI provider that can adjust to your business’s specific requirements while providing cost-effective solutions to improve your payment process.
- We’re customer-focused and super responsive. Our technical staff is knowledgeable and available to diagnose problems quickly.
- We’re flexible and provide e-invoicing solutions that’ll grow with your company’s needs. Our services are expandable, consistently working for you and your business.
- We offer simplicity and dependability. Whether a small business or a large organization seeking to enroll vendors in your supply chain, Unimaze ensures quick linking between your trading partners and your ERP system.
- We provide a full range of EDI services, from fully managed services for organizations of all sizes to turnkey EDI tools.
Simply put, Unimaze is committed to ensuring that your business reaps the benefits of e-invoicing in the United Kingdom.
Say goodbye to paper invoices!
Contact Unimaze support today and let us help you transition from paper to electronic invoicing. We’re your to-go-to e-invoice solutions provider in the UK.
E-Invoicing in the UK FAQs
What is a valid invoice UK?
A standard invoice in the United Kingdom should include the following;
A unique identification number.
The company name and address of the customer you’re invoicing.
The date the goods or service were provided (supply date).
Your company name, address, and contact information.
The amount(s) being charged.
A clear outline of what you’re charging for.
The date of the invoice.
The total amount owed.
VAT amount, if applicable.
While the data on an e-invoice may vary from one organization to another, an electronic invoice should contain the supplier’s data in a format that can be integrated into a buyer’s Accounts Payable (AP).
Can I Invoice without a company in the UK?
Yes, you can. E-invoicing allows you to trade with other businesses from anywhere on the planet through a secure network such as PEPPOL. Good e-invoicing should enable you to invoice your trading partners in real-time.
Take control of your invoices. Get in touch with Unimaze support today. Start your transition to e-Invoicing on the right footing!