What is eInvoicing?

eInvoicing is the direct exchange of invoice data between suppliers and buyers using a secure digital network with a common standardised format that’s readable by both people and computers.

Instead of manually entering, scanning, or emailing invoices, eInvoicing enables seamless transactions by ensuring invoices are automatically received and processed by financial systems.

With eInvoicing, councils, businesses, educators, and governments can also connect once and immediately transact with everyone on the same network, no matter what eInvoicing-enabled software they use.

Peppol: the eInvoicing framework

EInvoicing utilises the Peppol framework, short for Pan-European Public Procurement Online.

Peppol is an international standard that facilitates the secure and efficient exchange of eInvoices. The UK, along with multiple regions in Europe and globally, uses Peppol to support standardisation and interoperability between different business systems.

The Peppol framework offers a four-corner model, meaning invoices do not require direct integration between buyers and suppliers but instead travel through accredited Peppol Access Points. This approach ensures:

• Consistency: Standard formatting for all eInvoices.
• Security: Verified transactions reduce invoice fraud.
• Scalability: Businesses only need to connect once to transact with any Peppol-registered entity.

By leveraging Peppol, businesses can ensure compliance while improving operational efficiency.

eInvoicing legislation and adoption

Government agencies across Australia, New Zealand, the United Kingdom, and Europe are actively driving the adoption of eInvoicing to improve payment efficiencies and reduce processing costs.

In many regions, mandates are in place or planned for specific industries or sectors. In the UK, eInvoicing is currently voluntary (except for NHS England suppliers), but HMRC and the Department for Business and Trade are consulting on potential wider adoption models.

Businesses are encouraged to stay informed of current requirements and future developments by referring to the relevant government or regulatory body in their region.

Why eInvoicing matters for businesses

eInvoicing is more than just a compliance requirement - it’s a crucial step in digital transformation for educators, businesses, and all levels of government.

Ed Chung, CEO of TechnologyOne, previously described eInvoicing as a game-changer, saying it has the potential to ‘grow exponentially’ once it has a sufficiently wide user base.

In the UK, manual invoice processing is still common, with research from the UK Government consultation indicating that most SMEs still rely on paper or PDF formats for most of their invoices, creating a significant opportunity for automation.

With manual invoices costing an estimated £20–£30 each to process, moving to eInvoicing offers substantial cost and time savings. Adoption is expected to rise following government consultation.

eInvoicing is already proving to be a powerful tool for modernising the business ecosystem, and as more businesses and governments around the world make the switch, those without it will risk being left behind.

Is eInvoicing mandatory?

While not yet compulsory for all UK businesses, eInvoicing is becoming increasingly prevalent. Organisations that transact with government agencies will benefit from early adoption. Government policy is under review, with possible phased adoption for B2G and B2B transactions in future.

Businesses that proactively implement eInvoicing will be better positioned to meet future regulatory requirements and avoid potential disruptions as eInvoicing becomes the new standard.

What are the benefits of eInvoicing?

The shift to eInvoicing is not just about compliance—it delivers tangible business benefits, such as:

• Cost savings: By removing manual handling, businesses can save thousands annually. The UK government, for example, estimates a 60% - 80% reduction in invoicing costs when eInvoicing is utilised, from £20–£30 to just £10., processing paper and PDF invoices can cost between $27 and $30 per invoice, while eInvoicing reduces this to less than $10 per invoice. By removing manual handling, businesses can save thousands annually.
• Faster payments and error reduction: Automating invoice processing cuts manual data entry errors, reducing disputes, delays, and incorrect payments.
• Stronger security: eInvoicing reduces the risk of invoice fraud and email-based phishing scams by ensuring transactions occur via secure, verified channels.
• Environmental benefits: Eliminating paper invoices contributes to sustainability goals by reducing businesses' carbon footprint and waste.

How does TechnologyOne support eInvoicing?

TechnologyOne’s eInvoicing module, a part of our Financials product, is designed to help businesses and government agencies seamlessly transition to digital invoicing. With Financials, you can start sending invoices to your customers, and receiving invoices from our suppliers, directly with their accounting systems.

Upgrade to TechnologyOne’s CiA  if you haven’t already started using eInvoicing.

You can also watch our webinar, ‘See eInvoicing in action’, to learn more about how you can automatically receive and process eInvoices with TechnologyOne.