3 Questions to Ask to Successfully Archive Electronic Invoices
3 Questions to Ask to Successfully Archive Electronic Invoices
There are many reasons to move from paper invoice archiving to electronic invoice archiving, such as reducing the space and resources needed to store invoices, maximising data security and integrity, adhering to legal requirements, and having immediate, online access to any invoice you need. For most companies, the main benefits to electronic invoice archiving are improved efficiency, significant cost savings, increased compliance, and reduced security risk.
Challenges in multinational companies
While the benefits seem straight-forward, a major reason to switch from paper invoices to electronic (e-invoices) with regards to archiving, is its ability to comply with requirements of local tax authorities. In the European Union, for example, all companies are required to archive invoices for regulatory and tax evidencing purposes, according to the Directive 2010/45 EU. This helps governments catch tax fraud more quickly and ensures they collect all the tax revenue they are entitled to. Invoices are key legal documents in this process, and therefore strictly regulated.
For multinational companies, keeping up with rules and regulations everywhere they do business is a large task, whether doing business on paper or electronically. Having a generic archive isn’t enough – there are strict rules about how that archiving should happen, depending on the country. And to complicate things further, the requirements in different countries change regularly.
When operating in multiple countries, many organisations see their invoice archives scattered across subsidiaries, departments and service providers. Many times, subsidiaries decide for themselves what records to keep and how those are shared by other parts of the organisation. But, even though each archiving decision may be based on a sound business case, it creates major challenges on a company level to maintain consistent compliance, audit and access across each business entity.
Correctly archiving invoices and tax-relevant invoices is a compliance requirement for organisations. But complying to Value-Added Tax (VAT) rules is not simple, and even large corporations with great resources have been known to have compliance issues. Since non-compliance is not an option, and aside from the risk of the tax authorities catching up with you, you’ll also be accountable for missed VAT and penalty fees.
3 Questions to Ask to Get Control of Your Invoice Archives
The solution is to have a cloud-based electronic invoice archiving solution that not only helps you navigate the day-to-day complexities of doing business in different countries with different governments, but that also updates automatically as laws and regulations change.
When exploring what invoice archiving solution works best for your company, you should ask yourself three important questions:
1. What are your data integrity capabilities?
The overall intent of data integrity is to ensure data is recorded exactly as it appears and upon later retrieval, ensure the data is the same as it was when it was originally recorded. The questions you should ask any electronic archiving solution provider are:
How do I prove in 2031 that the invoice data I am showing is the same as the data I show in the system today?
How can I make sure nobody tampers or deletes the data between now and then?
To ensure data integrity, archived documents should be digitally signed and timestamped. A trusted digital timestamp gives you reliable confirmation that the content of your documents existed on a given date and has not changed since that time. To further prevent any alteration or deletion of archived records, it is advisable to store documents in more than one place – preferably in unalterable WORM storage (write once, read many) and online storage, with back-ups. WORM storage is the gold standard for archiving business critical documents, as it prevents any alteration or deletion of protected records.
2. What is your retention period policy?
The retention period identifies the duration of time for which the invoice information should be maintained or "retained." The duration of these varies greatly between countries, with most countries expecting businesses to retain the information for five years or longer. If you are working in a multinational company with operations in different countries, it can be daunting to keep up with everchanging local rules and regulations. The questions to ask are:
Do I need an archiving period for every document I store? Who remembers to remove the documents when the retention period expires?
How can I keep up with the changing regulations?
The solution should automatically support invoice archiving for the duration required by local VAT/GST laws. If using the solution in multiple countries, you should be able to pre-define the applicable retention periods per country and have invoices automatically flow into the right folders and locations to meet regulatory demands. After the retention period, your archived documents should be automatically deleted to also ensure compliance with applicable privacy laws such as the GDPR regulation.
3. How will I access my invoices once they are stored?
It can be a challenge for companies operating in multiple locations to keep up with all paperwork and electronic files that come to the office every day. And before you know it, you’ve got a mountain of paper and no way to find the documents you or the auditors need. The question to ask:
How can I ensure I have immediate access to relevant invoice data when needed, even if the invoice is stored in another subsidiary/location?
How can I provide fiscal auditors access to our archived documents?
An electronic, cloud-based archiving solution helps you to organise all invoices in one central location, where access rights can be determined on an individual and folder basis. You can access all invoice data at any time, making it faster, more reliable, and easier to search and retrieve documents when you need them. For example, you can easily provide access to selected documents for fiscal audits to people outside your organisation through secure, one-time download links.
Automatic, Audit Friendly, Secure
Never store another paper invoice, save a PDF version on a fileserver, or lose sleep over keeping up with regulatory requirements again. Eliminate inefficiency, security risks and non-compliance issues – all barriers that ultimately impede business progress and the ability to gain a competitive advantage.
Learn more about Basware’s modern, cloud-based solution that helps accounting teams lighten the burden by automating invoice archiving processes - The Basware Vault.
Director, Product Management Martin has over 10 years experience in e-invoicing, e-archiving and product complaince domain. He has delivered and produced services to help customers gaining efficiencies and visibilities into their procure-to-pay (P2P) and order-to-cash (O2C) processes. Martin currently is leading Basware's Network Sending and Country Expansions team in Product Management.