4 reasons why your archiving strategy can help your e-invoicing strategy
Here at TrustWeaver, we have noticed how many companies are starting to reflect on what their e-invoicing strategy should be. That doesn’t mean they view e-invoicing as an isolated process, or necessarily want to acquire it as a standalone service – but in whichever form they’ll be adopting this still way-too-often missing piece of the enterprise automation puzzle, they will be confronted with the ‘compliance question’.
By confronting the ‘compliance question’, companies are turning a page on e-invoicing, seeking a corporation-wide approach as opposed to the piecemeal reactive adoption pattern followed thus far. But why do we see such a change in approach? We believe that this is mostly due to the rapid increase of government-imposed mandates for compulsory e-invoicing. In Latin America, countries have followed this path one after the other in neat succession for the past decade, and their success in remedying sky-high tax collection deficits has set off a global trend. Companies affected by indirect tax legislation in these countries have learned very quickly that non-compliance is not an option – and that letting local subsidiaries implement solutions with local vendors can seriously backfire from both an economic and a risk management perspective.
If a clear e-invoicing strategy helps to confront the pressure of mandatory e-invoicing with real-time tax controls, how does one create such a strategy? The surprising answer:
Start by deciding on your archiving strategy. Here are 4 reasons why:
1. Having an archiving strategy is a base requirement nearly everywhere
Archiving is a common denominator. E-invoicing rules vary from country to country, but the near-majority of countries require the ‘original’ of an invoice to be archived. Contrary to transaction compliance where compliance-specific processes can vary wildly, archiving can be done in a compliant manner by using a ‘superset’ approach to country rules, which requires relatively little country-specific logic as part of your archiving solution.
2. An archiving strategy is half of the work towards global compliance
The legal archive is where your ultimate evidence is. Despite massive diversity among countries, with such diversity noticeable even among countries within the ‘post audit’ and ‘clearance’ regime groups, a significant part of your total compliance responsibilities are related to the archiving phase.
3. Having an archiving strategy helps you stay in control of your own destiny
If you are a multinational company, you will be less vulnerable to pressure from subsidiaries or departments that seek a quick implementation of e-business solutions that include e-invoicing and e-archiving through local solution vendors. If you have no archiving strategy, you’ll invariably end up with a fragmented archiving landscape and vendor lock-in. Extracting yourself from such relationships can be close to impossible.
4. Archiving is a common anchor for all transactions in your global architecture
If you know in which archive you are going to store your original e-invoices, it becomes easier to trace a ‘compliant path’ back from that ultimate resting place to the different applications, service providers, trading partners, processes, product lines, and countries where e-invoices originate.
With tax administrations spending billions on next-generation online invoice control systems, companies trading internationally are under tremendous pressure to implement global e-invoicing in a consistent, scalable and cost-effective manner. This trend is irreversible, which means that the quality of your compliance strategy will become a competitive differentiator. To design a winning approach, our advice is to start thinking about the big picture with a solid archiving blueprint at the centre.
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Filippa Jörnstedt, Legal Counsel, TrustWeaver