The future of e-invoicing in 2025

ARTICLE | January 10, 2025

Authored by RSM US LLP

Electronic invoicing (e-invoicing) has rapidly transitioned from an optional process improvement to a vital part of the digital transformation agenda for organizations across every industry. Driven by increasing regulatory requirements, a push for operational efficiency, and the need to streamline financial processes, e-invoicing is gaining momentum globally.

Despite these benefits, the transition can be challenging. Successful e-invoicing implementation requires an organizational review to identify and address obstacles, buy-in from key stakeholders across departments and a clear roadmap for change.

Why is e-invoicing becoming crucial for businesses?

The shift toward mandatory e-invoicing is largely driven by a need for greater efficiency and compliance in a world where digitalization is reshaping finance and accounting.

Many governments are mandating e-invoicing to reduce tax fraud, increase transparency and ultimately improve tax collection. Italy, Brazil and Mexico have already mandated e-invoicing, and the expectation is that e-invoicing will become the global standard in the next three to five years. This regulatory push means businesses operating in these regions need to adopt e-invoicing or risk penalties and loss of business. Although adoption can be challenging, e-invoicing offers significant benefits.

Unlike manual invoice processing, e-invoicing aims to automate data entry and validation, reducing errors associated with mistyped information, duplicate invoices or missed payments. This automation not only improves accuracy but also allows for better real-time visibility into financial data, leading to better business decisions and forecasting.

Additionally, it cuts down the time and resources involved in manual invoice processing. These benefits scale rapidly, especially for organizations dealing with high transaction volumes, which improves operational efficiency. This also contributes to reducing paper usage and transportation-related emissions, which may reduce and organization’s carbon footprint.

What are key challenges in implementing e-invoicing?

While e-invoicing offers many benefits, companies face several challenges when it comes to implementation. These obstacles can range from understanding how the mandates impact an organization to resolving master data issues to fixing technology compatibility issues. However, as with most business transformations and technological developments, a lack of understanding, stakeholder management and resistance to change are some of the most common challenges when introducing e-invoicing systems.

Business functions that are comfortable with traditional finance functions and invoicing methods may be reluctant to shift to a digital system, fearing that it would disrupt established routines or require new or different skills. Adopting e-invoicing may reveal a lack of internal technical expertise or insufficient infrastructure, especially for companies with less experience in digital finance. IT teams may need additional support, and the finance department must be equipped with the necessary tools and training.

Addressing these concerns requires adequate stakeholder management of demonstrating the importance and impact of e-invoicing mandates to create a solid understanding for the business.

As e-invoicing affects many departments, each with unique processes and priorities, this can be a real challenge. Misalignment across departments can lead to project delays and inefficiencies. To mitigate this, it is vital that organizations establish clear communication channels, appoint owners and cross-functional teams, and set consistent goals that resonate with each department’s objectives.

How do organizations overcome internal e-invoicing challenges?

Successfully implementing e-invoicing requires a holistic, strategic approach to combining technology solutions with effective change management strategies. If your business is preparing to implement e-invoicing, understanding the impact of e-invoicing for your organization is crucial.

Staying up to date with all new and existing e-invoicing and digital reporting requirements is complex and time-consuming. Delays, unpredictability and the lack of standardization in each country create uncertainty and make planning difficult. Therefore, it is important to appoint a clear owner and initiate discussions with all departments involved in the invoicing process early on—finance, tax, IT, procurement and others—to create awareness and understand their specific needs and challenges.

Hosting informational sessions and addressing questions directly can help alleviate initial concerns. It is important to make sure to communicate the impact but also the advantages of e-invoicing—such as faster payments, improved compliance and reporting capabilities—to help each department understand how it impacts and benefits them.