e-invoicing is the direct transmission of invoice data from your financial systems to those of your business partners and or a government body.
To produce an e-invoice, a business cannot simply create a PDF version of a traditional paper invoice, rather, a business must have the ability to convert invoice data into a prescribed data format (e.g. PEPPOL BIS, Json etc, Xml etc.)
The Interoperability model (otherwise known as 4 corner model) – this model uses a network of private service providers governed by an overarching regulated document format and exchange methodology. This model centers on direct interchange of documents between businesses with subsequent relay to the government on a post-audit basis. The most widespread regulator and document exchange format of this model is called PEPPOL. Countries which have adopted PEPPOL e-invoicing in APAC include Australia, Singapore and Japan.
The Clearance Model – this model entails the government clearance of an invoice (fiscal validation and approval) before or after issue of the invoice to your supplier. Here the country tax administration defines its own structured format to be used by tax subjects. This is the most prevalent model seen in APAC, with India, Kazakhstan, Bangladesh Indonesia, the Philippines, Vietnam, Korea, Taiwan, China, Thailand and soon Malaysia adopting this model.
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