As governments around the world push toward digital transformation, the E Invoicing Process has become a crucial compliance requirement and operational necessity for businesses. Whether you’re a multinational corporation or a small business navigating tax regulations, understanding how e-invoicing works—and how to implement it—can help streamline workflows, reduce errors, and stay on the right side of the law.
This comprehensive guide will walk you through what the e-invoicing process involves, the rules and requirements businesses must follow, and the step-by-step method to create and submit compliant e-invoices.
What is the E Invoicing Process?
The e-invoicing process refers to the digital generation, exchange, validation, and archiving of invoices between a supplier and a buyer, often through a government-mandated or certified platform. Unlike traditional invoices, which are paper-based or sent as PDFs, e-invoices are structured digital documents that can be processed automatically by software.
Key Characteristics of E-Invoicing:
- Invoices are created in a structured data format such as XML or JSON.
- They are transmitted electronically through certified channels or directly through tax authority portals.
- Validation or clearance by a government platform is often required before delivery to the recipient.
- They are stored digitally for audit and compliance purposes.
The goal is to enhance transparency, combat tax fraud, and simplify reporting by enabling real-time or near-real-time exchange of invoice data.
What is the Rule for E-Invoicing?
The rules governing the e-invoicing process vary significantly depending on the country or tax jurisdiction. However, most e-invoicing regulations are part of broader efforts to enforce continuous transaction controls (CTC) or real-time reporting systems.
General E-Invoicing Rules May Include:
- Mandatory Use Thresholds: Many countries only require e-invoicing from businesses with turnover above a certain threshold (e.g., ₹5 crore in India or €800,000 in some EU countries).
- Use of Authorized Portals: Invoices must be routed through designated platforms (e.g., India’s IRP, Mexico’s SAT, Türkiye GİB e-Fatura, Italy SDI and Romania SPV).
- Digital Signature and QR Code: E-invoices may require a secure digital signature and inclusion of a unique identification code or QR code.
- Buyer Acknowledgment: Some systems require that the buyer accept or reject the e-invoice for it to be considered complete.
- Storage Requirements: E-invoices must be archived electronically for a defined period (often 5–10 years) in a tamper-proof format.
It’s crucial to stay updated with your country’s tax authority to ensure compliance with the current e-invoicing rules.
What Are the E-Invoicing Requirements?
Successfully implementing the E-Invoicing Process involves meeting several legal, technical, and operational requirements. These are often dictated by tax authorities but also shaped by your internal accounting processes.
Common E-Invoicing Requirements Include:
- Unique Invoice Reference Number (IRN): In countries like India, each invoice must carry an IRN generated and validated by the government.
- Mandatory Fields: The invoice must include standard data points such as:
- Supplier and buyer GST/VAT numbers
- Invoice date and number
- Itemized product/service details
- Tax breakdown (CGST, SGST, IGST, VAT, etc.)
- Payment terms
- Structured Data Format: Most jurisdictions mandate submission in formats like JSON or XML to enable automatic data processing.
- API Integration: Businesses must integrate their ERP or billing systems with government APIs for seamless invoice submission and validation.
- Digital Signature & QR Code: To ensure authenticity and traceability, the invoice often requires an official digital signature and embedded QR code.
- Real-Time Submission: E-invoices must be submitted for clearance at the time of transaction or shortly thereafter—delays can result in penalties.
- Secure Archival: Businesses must maintain an electronic archive of issued and received invoices for regulatory access.
Meeting these requirements ensures legal compliance and also paves the way for better automation, data analytics, and audit readiness.
What Are the Steps of E-Invoice Processing?
To understand how the e invoicing process works in practice, it’s helpful to break it down into a clear sequence of steps. Though exact workflows may vary by region, the underlying structure is generally similar.
Step-by-Step Overview of E-Invoice Processing:
- Invoice Preparation: The seller generates an invoice in their ERP or accounting software with all required fields filled in.
- Data Formatting: The invoice is converted into a structured format (typically JSON or XML), ready for validation.
- Government Portal Submission: The invoice is transmitted to the relevant government invoice registration portal (IRP, SDI, etc.) via secure APIs.
- Validation and IRN Generation: The government system validates the invoice and assigns a unique invoice reference number (IRN) and QR code.
- Digital Signature: A digital signature is applied by the portal or supplier to certify the authenticity of the invoice.
- Delivery to Buyer: The validated invoice is sent to the buyer through email or API channels, often in both structured and human-readable formats (PDF or HTML).
- Archival: Both parties archive the e-invoice in a secure digital environment for future reference and audits.
This process ensures that the invoice is compliant, verifiable, and securely transmitted and stored.
How Do I Create an E-Invoice Step by Step with SNI?
Creating an e-invoice can seem complicated, but with SNI’s comprehensive e-invoicing solution, the process is streamlined, compliant, and efficient. Here’s a practical step-by-step guide to creating your first e-invoice using SNI:
Step-by-Step E-Invoice Creation Guide with SNI:
- Choose SNI’s E-Invoicing Platform or Integration
Whether you use SAP, Oracle, or another ERP system, SNI provides seamless integration options and a cloud-based platform that supports your country’s specific e-invoicing format and regulatory requirements.
- Enter Complete Invoice Details
Input all mandatory data fields such as seller and buyer information, invoice number, itemized product or service list, tax amounts, and any other compliance-related details. SNI’s system validates this data to ensure completeness and accuracy.
- Generate a Structured Invoice File (XML/JSON)
SNI automatically converts your invoice into the required structured format (typically XML or JSON), adhering to local e-invoicing standards and formats.
- Submit Invoice to Tax Authority via SNI
The invoice file is securely transmitted to the government’s Invoice Registration Portal (IRP) or tax authority platform through SNI’s secure channels for validation. If the invoice is approved, you receive the official Invoice Reference Number (IRN), QR code, and digital signature.
- Download, Store, and Send the Signed E-Invoice
SNI automatically archives the digitally signed e-invoice in a secure digital repository. You can then share the compliant e-invoice directly with your customer, ensuring it meets all legal and regulatory standards.
- Record and Track Your E-Invoices
All e-invoices are logged within the SNI platform and synchronized with your ERP/accounting system for real-time tracking. Monitor invoice status easily—whether paid, pending, or overdue—and generate compliance reports effortlessly.
Why Use SNI for E-Invoicing?
SNI’s solution not only automates the entire e-invoicing lifecycle but also supports multi-jurisdictional compliance, making it an ideal choice for businesses operating in multiple countries with varying tax rules. Its user-friendly interface, reliable validations, and secure transmissions simplify e-invoicing so you can focus on growing your business.
Final Thoughts: Embrace the Future of Billing
The E-Invoicing Process is more than a compliance requirement—it’s a powerful tool to future-proof your financial operations. From reducing human error to enabling real-time tax monitoring and faster payment cycles, e-invoicing transforms the way businesses manage transactions.
Key Takeaways:
- The e invoicing process digitizes and streamlines invoice generation, validation, and delivery.
- Compliance rules and requirements vary by country but typically involve structured formats, digital signatures, and real-time submission.
- Using compatible software simplifies every step—from invoice creation to submission and archival.
- Adopting e-invoicing early can provide a competitive edge in efficiency, accuracy, and tax compliance.
As global tax systems evolve, businesses that embrace e-invoicing will benefit from smoother workflows, better visibility, and stronger compliance.
