Finding the business benefits in the e-invoicing transition
How e-invoicing can create value beyond compliance
As the scale and significance of this transformation come into focus, C-suite executives should understand the impact of e-invoicing and the management of indirect tax data on their businesses. Doing this right requires coordination across the organisation, not just in the tax department but also in IT, finance, and any part of the business their enterprise resource planning (ERP) systems touch—which is almost everything.
This article was first published in Harvard Business Review on 2025 October.
Why e-invoicing matters now
Around the globe, the shape of indirect taxation is changing. Dozens of countries, from Brazil to Italy to Malaysia, have adopted e-invoicing with the aim of integrating it into their tax collection system. They are showing how this technology can boost revenue from value-added taxes (VAT) and other levies, reduce fraud, and improve compliance.
The arrival of electronic invoices also shows how tax collection, still conducted as paperwork in many jurisdictions, is finally being automated. The digitalisation of indirect tax is a transformative step, breaking down a historic reliance on manual reports and return preparation.
Motivations for change
The traditional VAT return is becoming obsolete, driving the need for multinationals to establish an e-invoicing system that is robust and scalable. Many countries now require structured e-invoices that make tax data consistent and machine-readable. Some go further and mandate real-time transmission of invoice transaction data to government portals.
Where this is not already happening, it is on its way. The Organisation for Economic Co-operation and Development (OECD) has advocated for this transition to e-invoicing and provides guidance. The European Union’s recently approved VAT in a Digital Age (ViDA) framework mandates near-real-time transaction reporting for business-to-business transactions within its member states. While the EU does not have a global mandate, its extensive trading network and economic influence are expected to act as the “starting pistol” for further adoption of similar measures globally.
C-suite leaders should appreciate that e-invoicing goes hand in hand with improving processes and controls that any large organisation would naturally be pursuing. Even companies with extensive operations in the US—notably behind in adopting e-invoicing—should benefit by integrating e-invoicing capabilities into their operations.
Finding the benefits
By showing an ambition beyond “just” meeting the tax compliance requirements in specific jurisdictions, e-invoicing can help an organisation increase process automation and reduce costs. And, if executed correctly, the changes required for e-invoicing will provide assurance that data is accurate and processes robust, delivering long-term benefit as tax authorities dedicate more sophisticated digital tools, including AI technologies, to their compliance efforts.
Data confidence will be at the heart of successful e-invoicing. Delivering robust data requires looking upstream to where information is entered and stored. Here, having up-to-date, tax-enabled ERP systems is vital, along with having the right compliance technology partners to help visualise, validate, and transmit the data to business partners and tax authorities alike.
Inaccurate data or system shortcomings easily lead to compliance failures, with the attendant financial risks and reputational downside. Holistic e-invoicing and compliance solutions defend against these risks and foster reduced tax processing costs, faster payment cycles, and improved cash-flow forecasting.
Preparation’s upside
Tax authorities are digitising their systems because they see the power in transparent data and increased automation. For C-suite leaders, the move to e-invoicing is about much more than just meeting the latest compliance requirements. It is an opportunity to reap the benefits that e-invoicing and tax digitalisation can encourage across their entire organisation.
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