What is EDI Invoice and how can I use it ?
20 June 2023
20 June 2023
EDI Invoice is the most mature solution for implementing an electronic invoicing project. In fact, with just a few months to go before the introduction of mandatory electronic invoicing for all BtoB transactions, it remains the leading tax-compliant dematerialization solution used by businesses.
In this article, find out more about EDI Invoice, its implementation, operation and benefits, as well as possible alternatives to EDI Invoice. Finally, you’ll discover 5 reasons to choose EDI Invoice before 2024.
EDI enables billing data to be transmitted securely from management system to management system, in a structured, standardized format.
The EDI invoice principle is based on three points :
In fact, the implementation of EDI invoicing is governed by law and by standardization rules.
The issue of electronic invoices or e-invoices is governed by Article 289 of the French General Tax Code.
For the EDI message to become an invoice : the supplier and customer mutually undertake to exchange invoices and credit notes via EDI. The EDI message contains all mandatory invoicing information and meets the following guarantees :
These guarantees give the EDI message the status of an invoice, enforceable against third parties and tax authorities in the event of an audit.
To be able to transmit and integrate invoicing data into different information systems, the Invoice or EDI Invoice message must comply with certain standards. Various standards are defined and regularly updated by organizations such as GS1 and GALIA. The most common formats are EDIFACT, XML and UBL 2.0.
Invoices are then transferred from sender to receiver via secure VAN (Value Added Network) or VAN (Réseau à Valeur Ajoutée) networks offered by EDI solution providers.
EDI Invoice enables the invoicing process to be fully integrated into suppliers’ and customers’ information systems, without the need for re-keying.
The invoice is issued by the supplier’s Sales Management or ERP system. The EDI solution chosen by the supplier converts the invoice into an EDI message. The supplier’s EDI provider takes charge of the message and directs it either to the customer or to the customer’s EDI provider. The supplier receives notification when the message is delivered.
The customer’s EDI solution receives the invoice. Invoice data is extracted from the message and integrated into the management system without any re-entry. The customer can then set up a P2P (Purchase to Pay) process to reconcile invoice data with delivery and order data, and then trigger payment.
At the same time, supplier and customer store the Invoice message in an SAE (Système d’Archivage Electronique), to guarantee its integrity for the legal 10-year period, and to enable its restitution in the event of an audit.
Issuing and receiving electronic invoices via a fully automated EDI process, secure on both sides, brings many advantages:
If your business partner, whether supplier or customer, is unable to send or receive EDI invoices, you can use other methods to dematerialize invoices.
There are several solutions for issuing electronic invoices, without the need for full EDI.
WEBEDI is an alternative solution to full or integrated EDI. The company accesses an EDI service via an Internet browser.
Invoices are deposited and received via the WEBEDI portal, since there is no automatic integration with information systems. WEBEDI is the solution for sending and receiving EDI invoices without having to invest in a complete EDI system.
Electronic signatures involve signing a digital document using an electronic certificate that complies with the RGS (Référentiel Général de Sécurité) and eIDAS (Electronic Identification And trust Services) standards. The electronic signature thus authenticates the document and guarantees its integrity. Invoices in PDF format, electronically signed and accompanied by a certificate, are permitted by law.
The PAF (Piste d’Audit Fiable, or Reliable Audit Trail) enables any digital file, PDF or otherwise, to be considered an electronic invoice. The requirement is to be able to establish the authenticity of the invoice by means of an audit trail that enables the invoice to be reliably and truthfully traced back to the events that generated it: sale, delivery, order. The PAF is also a means of justifying the authenticity of paper invoices.
And finally, the Factur-X format promoted in France by FNFE-MPE is a mixed or hybrid format. In other words, the invoice is an electronically-signed PDF/A3 file embedded with an XML file containing the invoicing data in a structured format. Likewise, Factur-X is both human-readable and machine-readable. It can therefore be used to issue electronic invoices with structured data, regardless of the recipient’s level of equipment.
From July 1, 2024, electronic invoicing will gradually become mandatory for all B2B transactions.
The application of this obligation is accompanied by the transmission of invoicing data to the tax authorities, enabling them to draw up VAT revenue forecasts and pre-filled declarations. Consequently, in the long term, only electronic invoice formats incorporating structured data will be authorized. Simple or signed PDF formats will therefore be abandoned.
Choosing to switch to EDI Invoice now means you can :
1. benefit from EDI service providers’ expertise in electronic exchanges;
2. digitize your purchasing and sales processes;
3. reduce the cost of issuing and receiving invoices;
4. trace and secure all commercial transactions;
5. comply with the 2024 obligation.