As governments globally require digitalized methods for e-invoicing and real-time monitoring and reporting of business transactions, multinational corporations (MNCs) face many complex and costly compliance challenges.
In particular, mandates for e-invoicing and continuous transaction controls (CTC) are data-intensive initiatives that demand speed, accuracy, and transparency all at once. Complying with these mandates requires technology, systems, and processes that not all companies have, but most will soon need.
Indeed, more than 80 countries already have e-invoice mandates in one form or another, and in the next few years many other countries such as Belgium, Poland, and France are expected to implement mandates or expand on existing ones. By the end of 2025, it is estimated that 80% of all companies will switch from manual to electronic invoicing, motivated either by mandates and regulations or by the pressure of key business partners so it is essential indirect tax and finance teams are prepared when these mandates go into effect.
What are the compliance challenges?
One of the largest obstacles MNCs must overcome is the speed and scale in which e-invoice/CTC mandates are being rolled out.
Lack of e-invoicing standards across governments
- E-invoicing and CTC are popular with governments because they provide more accurate and immediate proof of tax collected and help prevent fraud and tax evasion. Unfortunately, a general lack of e-invoicing standards across governments means each country has different filing requirements and technical protocols, which adds to the complexity and increases compliance costs. CTC rules also demand tax reporting in real-time, or close to it, so MNCs must have systems in place that can meet all e-invoicing/CTC requirements in multiple countries.
- Manual processes are too slow to meet these data demands, so automated solutions are the only practical way to keep pace and lower costs. After all, tax teams in charge of managing and monitoring e-invoicing compliance do so in addition to their normal post-audit tax reporting obligations. The extra work and stress can be overwhelming without the proper tools, and the risk of mistakes escalates as the pressure mounts.
Data validation to meet different compliance obligations is time-consuming
- Finally, e-invoicing requires the transfer of accurate and timely invoice data, which can only be delivered with financial systems that can integrate with the required government networks (e.g. PEPPOL). E-invoicing requires that the correct data fields be populated and transferred to the host government in at, or close to, real time. Every country has different specifications about what data it wants to see, however, so managing e-invoicing for multiple countries can be extremely complex.
- Furthermore, tax regulations are always changing, so tax professionals must constantly monitor the regulatory environment in countries where they operate, as well as in countries where they intend to expand.
A more cost-effective approach to compliance
Traditionally, businesses have had to rely on multiple tax technology vendors to ensure local compliance everywhere they operate. Using disparate solutions adds complexity, integration issues, potentially more maintenance, risks of data security, and lack of standardization, driving the cost of compliance higher. In order to address the many complexities of e-invoicing, global MNCs must have systems in place that can meet all e-invoicing/CTC requirements in multiple countries simultaneously.
Continuing to deal with multiple vendors under these circumstances is impractical and costly. A much better solution is to use a single trusted vendor with established expertise in all countries where e-invoicing compliance is required. Specifically, tax teams can make the e-invoicing process more efficient by implementing universal technical and regulatory compliance software capable of handling the requirements for companies of all sizes.
Technology as an enabler
ONESOURCE Pagero is an e-invoicing solution designed to help businesses efficiently manage CTC compliance and streamline operations.
ONESOURCE Pagero offers a seamless approach to comply with global e-invoicing mandates through a fully integrated platform. It enhances operational efficiency and simplifies integration with various networks like PEPPOL and over 70 other accredited networks in more than 70 countries.
Key Features:
- Global reach: Manage e-invoicing in virtually any country with e-invoice or CTC mandates.
- Scalability and flexibility: Easily adapt to new regulations and jurisdictions. Integrate seamlessly with any ERP system, business application, or invoice API, including pre-built connectors for SAP and Oracle enabling expedition of future rollouts.
- Unmatched reliability: Handle high volumes of invoices efficiently, even during peak seasons, thanks to a robust cloud-based infrastructure.
- Ironclad security: Benefit from leading security protocols, including GDPR compliance, proactive vulnerability scans, and active intrusion detection and prevention.
- Simplified maintenance: Eliminate manual updates with automatic regulatory updates, saving significant time and resources.
An all-in-one, global solution
ONEOURCE Pagero is part of the ONESOURCE comprehensive suite of tax solutions. MNCs can now rely on a single vendor for all of their tax and e-invoice compliance support. This includes VAT/GST/SUT calculations, e-invoice processing, and post-audit tax prep and filing.
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ONESOURCE Pagero integrates seamlessly with existing business systems and lowers costs by automating all data exchanges and minimizing the need for IT support. Automatic regulatory updates relieve the burden on the tax departments and reduce risk of non-compliance.
Beyond e-invoicing compliance, ONESOURCE Pagero automates accounts payable and receivable processes through an open global network connecting over 100 business networks. This cloud-based platform enables businesses to accelerate growth and gain valuable insights by streamlining global compliance processes.
Automation enables the tax department to do more with less and manage the complexities of CTC compliance and reporting. The tax department can move beyond compliance and focus on more strategic advisory and growth initiatives within the business.
Contact us today to speak with a Thomson Reuters consultant about how we can help your organization save on the growing costs and complexity of compliance, and take a free demonstration of our ONESOURCE Pagero e-invoicing solution.
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