Electronic Invoicing: What is it and how is it done? Discover its advantages!

Invoicing is a common task in all companies, with the exception of simplified cases. Invoices have existed since ancient Mesopotamia, but they have been modernized But, what is an invoice? Let's review it: The definition by the RAE is the following: “An account in which the items sold or services rendered are detailed with their prices, and which is delivered to the customer to demand payment.” There probably aren't too many people who remember a handwritten invoice, as the use of computers has been standardized in the business world for many years, which has facilitated administrative management processes. It is currently the most widely used method, but sometimes it can be challenging to verify the authenticity and legality of an invoice, making it susceptible to potential fraud. Therefore, electronic invoicing has proliferated, as it offers additional benefits. Electronic invoicing is a proof of payment, just like the traditional invoice, but issued in digital format through specialized platforms. Benefits for companies

• Streamlines procedures and simplifies processes.
• Reduces operational and administrative costs.
• Greater control of accounting documents: especially useful due to the obligation to retain them.
• Quick and easy access: all invoicing will be available and organized.
• Increased security.
• Free invoicing system in universal format.
• Savings in paper and printing costs and reduction of physical archive space.

FACe: the public administration invoicing system

  FACe, according to its official website, is the “General Entry Point for Invoices in the General State Administration,” which allows electronic invoices to be sent to the agencies of administrations that work under this format. It falls within the objectives of Law 25/2013, to promote electronic invoicing and create the accounting register of invoices in the public sector. One of the consequences of this regulation is the obligation, since January 15, 2015, to invoice the public sector only electronically. Any public administration can adhere to this format to manage all invoices from the same place. FACe is designed so that companies and self-employed individuals awarded public contracts for works, services, or supplies can present invoices for the work executed. The FACe electronic invoicing program has been developed with the purpose of:

• Having a unified and codified format for document presentation and consultation.
• Facilitating integration with company invoicing programs to connect automatically to the system.
• Having a free invoice generator through the public application Facturae for companies and self-employed individuals.

To access invoice sending and consultation, it is necessary to have a digital certificate, an electronic signature, or have the Cl@ve system activated. What services does it offer?

• Validate and view invoices, as well as consult those issued.
• Issue invoices: they can be sent to administrations adhering to FACe as well as to other administrations indicating the corresponding DIR3 code.
• Check CSV as proof.
• Certificate management: to validate certificates, keys, or electronic signatures.
• Directory of invoicing services integrated with the system and FACe units, that is, the adhering public entities.

One of the advantages of the FACe system is its integration with Facturae and other private invoicing applications, which facilitates the work of public suppliers.

What is the RCF? What is it used for? The Accounting Register of Invoices is a tool that regulates the registration of both paper and electronic invoices. It has been developed with the purpose of:

• Controlling public spending and conducting more exhaustive budget tracking.
• Reducing delinquency in the public sector.

Through this portal, an entry register and a verification code are created that serves as proof and facilitates consultation to see in what state the processing is. For this, it is essential that electronic invoices are structured, that is, issued in a common format or language, to complete the process automatically. To understand its operation, let's visualize the flow of information in the RCF.  

GENERAL CASE

ELECTRONIC INVOICES CASE

  It is important to review the information before proceeding with the registration, as, as can be seen in the infographics, they would be returned in case of errors, which would delay the payment from the administration. The obligation of electronic invoicing should be seen as an opportunity for entrepreneurs and not a problem, as its advantages are enormous. Once it has to be implemented for invoicing with the administration, this method should also be used for private invoicing. Developments and applications: the negotiable invoice The negotiable invoice is an ideal financial instrument for companies that need liquidity. It is the third copy of an invoice, and in the case of electronic invoices, they become negotiable when registered with an institution for securities clearing and settlement. In some countries, electronic invoicing has evolved alongside regulation and is much more developed, allowing invoicing platforms to be integrated with factoring or invoice discounting platforms. If the invoice is sent correctly, only the proof is needed to anticipate the money and thus finance oneself. In addition, a factoring or invoice discounting platform like Inversa could be integrated into the invoicing system, eliminating intermediaries and streamlining procedures. What a good idea, isn't it? Well, I'm sorry to tell you that it would not yet be possible in Spain due to regulations. In Latin America, this issue is more regulated and developed than here, especially in Peru, where it is already in use. At Inversa, we hope that it won't be long before it can be implemented here and take advantage of it.