E-invoicing boom expected in Latvia
In Estonia SEPA requirements became effective in February this year, leading to an increased amount of e-invoicing – every fourth invoice is an e-invoice, and more than 40 % of invoices for private individuals are created by electronic means, according to Omniva (new international name of Eesti Post) data on e-invoicing in Estonia. Experience of other countries also shows that the era of paper invoices has ended, for instance, in Denmark e-invoicing has been the only accepted choice for several years. By January, when the new regulations enter into effect, companies should be able to adjust their accounting and IT systems to the new requirements.
Currently three types of invoices exist: 1) paper invoices which pursuant to the law are also delivered by post; 2) PDF format invoices which are paper invoices transformed into computer-readable images, and 3) e-invoices which are only processed, delivered and used by electronic means. However, contrary to the opinion that PDF-format invoices are electronic invoices, they are not e-invoices. Both private individuals and companies are required to personally enter the data from the PDF-format document into the respective system. E-invoicing is an automated activity which considerably saves time from the receipt of the invoice until its payment.
E-invoicing will fundamentally replace the previous system – the company will forward the invoice to be paid to the bank and the customer will assign the bank to prepare and settle the payment by using the services provided by Omniva or other infrastructure service providers. For companies choosing to further provide their customers the service of Standing Order payments, this entails certain changes.
"Estonia has already managed to implement the SEPA system, Latvia is preparing to follow this year, and Lithuania will also join the e-invoicing era soon after it introduces the euro. Omniva has become the leading provider of e-invoicing solutions in Estonia, and their experience will be valuable in introducing the system on the Baltic scale," noted Evita Grundberga, Business Development Manager of the Info-logistics Department at Omniva SIA.
Data show that e-invoicing ensures savings of 11 euros for each incoming paper or PDF-format invoice. According to Omniva calculations, about 40 million invoices are currently circulated in Latvia, and the share of e-invoices is very small. Thus, in Latvia the above changes would save about 440 million euros each year.
"Businesses are often negative about any changes but e-invoicing would considerable save resources. Instead of printing and sending each invoice in a time-consuming process, manually register it in the information system and make the payment, the whole process will be automated. Time spent by staff members, for instance in finding the people needed for a signature, could be used more efficiently," explained Evita Grundberga.
