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Electronic invoices

Electronic invoices

Companies are increasingly taking advantage of the capability to issue invoices electronically ("electronic invoicing" or "electronic billing"). However, alongside the commercial advantages, using these new transmission channels also harbors potential risks.

Benefits and risks for companies

For many companies in a range of sectors, the conversion to electronic billing affords significant benefits in terms of costs and efficiency, in particular if a large number of invoices needs to be issued and sent out every day. Further cost reductions can be achieved via seamless integration into existing IT-aided business processes. However, financial administration and fiscal legislation places particular, and to an extent stringent, demands regarding a fit-for-purpose electronic invoicing process. If it cannot be proved beyond doubt that the requirements are satisfied, for example as part of a company audit, there is a risk that the deduction of input tax will be lost, especially for the recipient of the invoice.

Irrespective of the transmission channel (e-mail, FTP, EDI, or fax), the current legal situation requires that the authenticity of origin and the integrity of the invoices is guaranteed (section 14 German VAT Act (UStG)). This can only be achieved by using the qualified electronic signature. Additionally, special requirements regarding retention and auditability of invoices issued electronically must be complied with.

Outsourcing the process

The current legal and organizational hurdles in the electronic invoicing process result have resulted in a large proportion of companies using external service providers to issue electronic invoices and send them to customers or to verify the invoices received by customers. However, it must be ensured that not every service model is suitable from an input-tax perspective and may harbor liability or tax risks.

Support from IT AUDIT

IT AUDIT supports you in the fiscal, legal, and organizational design of your process for electronic billing.

Our service spectrum covers the following main areas:

  • Auditing the process for electronic dispatch of invoices
  • Assistance in compliance with statutory requirements
  • Support in selecting software or a service provider
  • Arrangement or audit of necessary requirements
  • Support in creating conclusive process documentation

Irrespective of whether you deploy the process yourself, use a service provider, or act as a service provider yourself, we will work with you to analyze the individual process steps and notify you of the current statutory and legal situation. We regard ourselves as a partner that seeks optimum solutions and as the inspiration for future developments. In turn, that gives you legal certainty and reduces your risks in relation to the issue of electronic invoices.

Where to find us:
Im Mediapark 5a
50670 Cologne
Phone+49 221 952681-190
Fax+49 221 952681-114
E-Mail infoit-auditcom