The Official State Gazette (BOE) published this regulation today. Among other new features, it requires companies to prove they pay their suppliers on time to access public aid, requires contractors to pay late payment interest to subcontractors, and publishes a list of major defaulters.

Currently, depending on the size of the company, we can distinguish two implementation periods:

• Companies with an annual turnover of more than eight million euros have approximately two months left to comply with this requirement.
• The rest of the companies, SMEs, and self-employed workers. In this case, a gradual schedule was established allowing them to adapt to this obligation within three years.

The initial idea of this project is to reduce late payments in commercial transactions and to tightly control the transactions made and established between companies or self-employed individuals.

Electronic invoicing improves the management of the company's joint activity and gives access to the digitalization, allowing the digitalization of the flow of issuing and receiving invoices from customers and suppliers. It offers companies a new solution for managing invoicing-related processes. We'll look at the advantages of digitalization later.

Mandatory electronic invoice?

The law states that electronic invoicing is a key measure to "digitize business relationships, reduce costs transaction and facilitate transparency in commercial traffic, as well as to simplify access to information on the payment terms between companies.”

"Therefore, this law promotes the widespread adoption of electronic invoicing (...), extending the obligation to issue and send electronic invoices to all businessmen and professionals in their commercial relations," the text states. However, the rule refers to developing a new regulation that defines the requirements that these digital invoices must meet (both at a technical level and in terms of the information they must include).

In this regard, the law states the following: "The process of digitizing the invoice may entail a greater effort for smaller companies. Therefore, it is logical that these companies - with billings less than 8 million of euros - have a two-year transitional period since the approval of its regulatory development.

For their part, companies whose annual turnover is more than eight million of euros will be available one year since the aforementioned regulation is approved.

What is electronic invoicing?

It's the same as a paper invoice and has the same legal value. To be electronic, it must meet three conditions:

• Prepared in a standard electronic format: EDIFACT, X12, etc.
• Electronic transmission: sent and transmitted by one computer, received by another.
• It must meet the requirements of integrity and authenticity.

In other words, it is about the digitalization of the billing process.

What are the benefits of electronic invoicing?

• Cost savings: Companies save on the printing, shipping, and storage costs required to issue paper invoices.
• Process automation: The fact that invoicing is digital allows invoices to be sent and received with virtually no human intervention. This reduces invoice preparation time and eliminates any human error that may occur.
• Increased productivity: Improves employee productivity; those previously responsible for invoicing can now dedicate their time to other important tasks that improve the company.
• Time savings: Not having to send invoices by post greatly streamlines the invoice issuance and receipt process. This reduces the time spent processing and recording data.
• Greater security: When the invoicing process is digital, it guarantees greater authenticity, reducing the risk of fraud. Furthermore, this invoicing process minimizes intermediaries, making it more secure. This means that, unlike paper invoices, digital invoices are less likely to be lost, thanks to secure storage.
• Lower environmental impact: Digitization allows companies to save on paper and shipping costs for billing documents. This reduces their environmental impact by eliminating paper and CO2 emissions.
• Business modernization: Electronic invoicing is the gateway to digitalization, and with it, companies project a modern image to their customers and suppliers. In other words, they demonstrate their ability to adapt to the latest technologies.
• Space savings: Electronic invoicing prevents old paper invoices from piling up on desks or shelves, giving rise to technology as a support tool.

These advantages demonstrate the efficiency of electronic invoicing. Therefore, more and more companies are not hesitant to replace manual invoicing with electronic invoicing. Thanks to digitalization, invoicing processes have been optimized, thus improving business relationships. Do you want to join the change? Contact us!