As governments around the world 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 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 (Source: Billentis – The E-invoicing Journey, 2019-2025) 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
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
One such solution has been brought to market by Thomson Reuters in partnership with Pagero, an industry leader in e-invoicing/CTC compliance. Indeed, ONESOURCE e-invoicing software, powered by Pagero, gives MNCs the flexibility to comply with any country’s e-invoicing and tax regulations, and provides the reach to connect with a company’s customers and suppliers through a single global platform.
ONESOURCE minimizes compliance complexity reducing costs with:
- Comprehensive Compliance: One integrated solution for tax and e-invoice/CTC compliance globally
- Best-in-class, Cloud Infrastructure: Offering a secure, fast, and scalable solution today and in the future
- Connected Systems: Integrate with any government or business network using Pagero’s sophisticated network and universal data model
- Automates e-invoicing/CTC compliance for over 70 countries
An all-in-one, global solution
MNCs can now rely on a single vendor for all of their tax and e-invoice compliance support. This includes VAT/GST/S&U Tax calculations, e-invoice processing, and post-audit tax prep and filing. ONESOURCE software also integrates seamlessly with existing business systems and lowers costs by automating all data exchanges and minimizing the need for IT support.
By combining their strengths, Thomson Reuters and Pagero have incorporated an indirect tax/e-invoice software solution that makes the international compliance process much more cost-effective and efficient. It also reduces the burden on tax teams and, once installed, allows a team’s limited resources to be deployed more intentionally and strategically.
E-invoicing/CTC mandates may soon be everywhere, but they can be easily managed with a universal, all-in-one solution from Thomson Reuters.
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 demonstration of our ONESOURCE Indirect Tax engine, and e-invoicing solution.