How to choose an e-invoicing software for your company

Walk back just a few decades, and accounts payable departments were receiving physical invoices, paying purchase orders via check, and storing away cumbersome paper documents in huge filing cabinets.

The advent of PDFs and direct-credit payments made the financial administration process much smoother.

But there’s an even more effective solution — e-invoicing software — that takes managing accounts payable to a whole other level of easy.

Learn what e-invoicing is all about, and discover the five most important features to prioritize when choosing an e-invoicing software platform.

What is e-invoicing?

E-invoicing is the process of sending and receiving invoices electronically, using specially coded e-invoices to minimize manual work and the possibility of human error during invoice processing.

It’s all about efficiency.

You generate a purchase order, and your vendor’s e-invoicing software receives it. The vendor’s platform automatically generates an invoice, which is then received by your e-invoicing software platform.

All of this happens nearly instantaneously and involves no manual processing of purchase orders or creation of invoices. There’s no room for human errors — like your supplier charging you the wrong amount.

How is e-invoicing different from traditional invoicing?

Traditionally, invoices were generated manually by someone on your supplier’s accounts receivable team after receiving a purchase order from your procurement team.

They were sent through the mail as paper invoices or delivered in PDF form via an automatic email.

Then, someone on your accounts payable team would manually check, verify, and upload the invoice into your AP platform for payment processing.

With e-invoicing, this all happens automatically, and that’s the key distinction.

Simply sending PDF invoices via email is not the same as e-invoicing, as these documents can’t be processed without a human involved. For an invoice to be considered electronic, it must be able to be processed electronically and automatically.

For this whole process to work, both the buyer and the seller must be using e-invoicing software.

What is e-invoicing software?

Electronic invoicing software is a specialized type of accounts payable and receivable software that helps buyers and sellers create, send, receive, and process e-invoices.

Its primary goal is to streamline the accounts payable process using invoice automation and electronically readable invoice formats. These benefits reduce the need for human input, decreasing risk exposure.

5 features your e-invoicing software should have

1. Multiple invoice format support

Some accounts payable and invoicing platforms claim to offer e-invoicing functionality when in reality, they’re talking about emailing and storing PDF documents.

For a true e-invoicing software platform, look for support for electronic formats like XML, EDI, JSON, and RosettaNet.

2. Integration with your procurement management systems

Choose an e-invoicing software platform that integrates with your procurement management platform.

This allows you to sync data across both platforms, such as automatically recording when payments have been made or shipments have been received.

For example, when a procurement specialist on your team raises a purchase order in your procurement management platform, the invoice is received and processed in your e-invoicing software and automatically marked as complete.

3. Compliance with relevant financial legislation

Financial information is sensitive, and in many cases, its security is protected by law.

Choose an e-invoicing platform that:

• Stores AP data for the minimum period of time legally required in your region
• Offers compliant and legally accepted digital signatures
• Has robust data security protocols (helping you to minimize SaaS security risk)

4. Multi-currency support

A good e-invoicing platform will offer support for multiple currencies, including translating this data when integrating with other software in your tech stack.

For instance, you might receive and pay an invoice in Euros, but all of your data in your supplier management platform is in USD.

You’ll need payment amounts to accurately convert when crossing platforms, or your vendor cost data will be inaccurate.

5. Support for multiple payment forms

Your e-invoicing platform should make it easy to make and accept payments in multiple forms, including:

• Credit card
• Direct credit
• Integrations with third-party payment gateways and tools

This improves your ability to receive funds from your customers and to pay vendors according to your written agreement (for example, some software vendors only accept payment via credit card).

Recommended e-invoicing software platforms

Avalara

Avalara offers several cloud-based solutions for maintaining financial compliance for global ecommerce, one of which is an e-invoicing solution.

Multiple invoice format support

Avalara’s e-invoicing portal supports more than 20 file formats, including EDI, XML, and CSV.

It also provides human-readable invoices in PDF format if you’d like to use it to work with customers who don’t use e-invoicing software.

Integration with your procurement management systems

Avalara offers over 500 native integrations, more than 200 of which are ERP and accounting systems.

Compliance with relevant financial legislation

Avalara’s primary value proposition is financial compliance.

They provide instructions for e-invoice and tax reporting regulations in more than 60 countries and regularly provide updates to customers when legislation changes.

Multi-currency support

Avalara does not support or track currency conversion.

Support for multiple payment forms

Avalara’s huge range of integrations makes it easy to receive payments in any format.

For instance, Avalara integrates with Stripe to accept credit card payments.

Coupa

Coupa is a business spend management platform designed to help procurement leaders lower costs and make the procurement process more efficient.

Coupa invoicing management is the tool they offer to support e-invoicing.

Multiple invoice format support

Coupa states that their e-invoicing software tool accepts data in multiple file formats, though cXML is the only format they explicitly mention.

You can also create and send PDF invoices via email when working with companies that don’t have an automated invoicing solution.

Integration with your procurement management systems

Coupa integrates with popular ERP platforms like Oracle and SAP and allows you to create custom integrations using APIs.

Compliance with relevant financial legislation

Coupa offers an invoicing module called Compliance-as-a-Service (CaaS) that helps you automatically validate invoicing requirements in multiple countries before sending.

Multi-currency support

Coupa’s e-invoicing system offers support for invoices in multiple currencies.

Support for multiple payment forms

For payment support, you’ll need to sign up for an additional Coupa product called Coupa Pay. With these two tools, you can pay via manual or automatic payments, physical or digital cards, and even digital checks.

Corcentric

Corcentric is an all-in-one procurement, accounts payable, and accounts receivable platform that also offers advisory services.

E-invoicing is one facet of their AP automation feature.

Multiple invoice format support

Corcentric accepts e-invoices in any format, including EDI and XML, two of the most common formats.

Integration with your procurement management systems

Concentric integrates with ERP systems Sage and Microsoft Dynamics GP but also has a native API for your development team to build custom integrations with your tech stack.

Compliance with relevant financial legislation

Corcentric helps accounts payable teams maintain compliance with Sarbanes-Oxley and European Union tax legislation.

Multi-currency support

Corcentric supports more than 170 international currencies.

Support for multiple payment forms

As an all-in-one accounts payable and receivable solution, Concentric supports payments in all common formats, including direct credit, automatic billing, and credit and debit cards.

Combine e-invoicing and vendor management for a 360-degree view of SaaS spending

E-invoicing is a powerful way to save time, eliminate the risk of manual error, and reduce costs during the SaaS purchasing process.

It is, however, only one aspect of vendor management. To truly automate purchasing workflows and gain insight into SaaS spending habits and cost savings, you need a vendor management platform.

With Vendr, you can bring contracts, negotiations, and historical data into one centralized view for better predictability and smoother operations, making your e-invoicing process a breeze.

Streamline your purchasing processes by:

• Accessing full historical context and centralizing contracts for every supplier in one organized, secure place
• Eliminating surprise upgrades with visibility into every contract and upcoming renewal
• Spending less time chasing down stakeholders and more time on the work that matters

Learn more about this intuitive software in our guide: The guide to vendor management systems.