• How the EU Defines an Electronic Invoice
  • E-Invoice vs. PDF Invoice

E-invoicing means sending an invoice as structured data, in a format the buyer's software can read and process automatically, rather than as a document a person has to read. An emailed PDF is an electronic file, but its contents are an image of a page: someone, or some software, has to read the figures off it. In an e-invoice, each item, such as the invoice number, each line's quantity and price, and the total, is its own data field. Some governments require e-invoices for some or all invoices, so check the rules where you and your customers are.

How the EU Defines an Electronic Invoice

In the EU, Directive 2014/55/EU of 16 April 2014, "on electronic invoicing in public procurement", defines it in Article 2: "‘electronic invoice’ means an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing".

The directive is about invoices sent to public bodies. Article 7 says: "Member States shall ensure that contracting authorities and contracting entities receive and process electronic invoices which comply with the European standard on electronic invoicing whose reference has been published pursuant to Article 3(2) and with any of the syntaxes on the list published pursuant to Article 3(2)."

That's the EU definition for public procurement. Rules for invoices between businesses, and in other countries, are set separately.

E-Invoice vs. PDF Invoice

  • PDF or paper invoice: a document laid out for a person to read. The buyer, or their software, has to pick out the figures and enter them.
  • E-invoice: the same information as separate data fields in an agreed structure, so the buyer's system can import it, check it and match it to a purchase order without retyping.

Both are invoices. What makes an e-invoice is the structured format that a computer can process.

Worked Example: One Invoice as Data Fields

These are sample figures for a fictional invoice, with no tax applied.

  • Invoice number: 2041
  • Line 1: quantity 3, unit price $400.00, line amount 3 × $400.00 = $1,200.00
  • Line 2: quantity 10, unit price $25.00, line amount 10 × $25.00 = $250.00
  • Invoice total: $1,200.00 + $250.00 = $1,450.00

On a PDF, these numbers are printed text. In an e-invoice, each one is a separate field, so the buyer's software can check that each line amount equals quantity × unit price, that the total equals the sum of the lines ($1,450.00), and that the invoice number hasn't been received before, all without anyone retyping it.

Mandates, Preparation and Figures

These are covered on separate pages, so they aren't repeated here:

E-Invoicing and Billed

Billed's invoice software page describes sending invoices by email and taking payment on them: "Create branded invoices, send them by email, take card and PayPal payments on them, and see which invoices are paid, partly paid or past due, all from one Billed account." If a customer or a mandate requires e-invoices, check with your provider and your accountant how to send them.

Related Guides

FAQ

Is e-invoicing the same as emailing a PDF invoice?

No. A PDF is a document for a person to read. An e-invoice carries the invoice details as structured data that the buyer's software can process automatically. The EU's Directive 2014/55/EU defines an electronic invoice as "an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing".

Which countries require e-invoicing?

It varies by country, by type of customer and by date, and the rules change. The e-invoicing mandates page linked on this page covers which countries require it and from when.

Do small businesses need to send e-invoices?

It depends on where you and your customers are, and on whether the customer is a public body or a business. Check the rules that apply to you, and see the preparation guide linked on this page.

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