What is e-invoicing?
The meaning of e-invoicing
E-invoicing is an electronic method for sending and receiving invoices between businesses. It makes the process faster, safer, and more efficient. By using e-invoicing, businesses can avoid many of the errors and costs often associated with manual invoicing systems.
You can handle e-invoicing yourself by email or use a system that ensures the invoice reaches the recipient. Many providers offer solutions for this.
Mockup of what an e-invoice could look like in Fenerum.
How does e-invoicing work?
The sender creates an electronic invoice in a standardized format and sends it to the recipient through an e-invoicing platform. The recipient's system receives and processes the invoice automatically, ensuring correct integration with the accounting system. E-invoices are stored digitally, making the documents easy to search and archive. Many businesses use SaaS solutions with integrated e-invoicing functionality. These solutions can make e-invoicing simpler and more accessible, as Fenerum does.
Benefits of e-invoicing
Efficiency and time savings: E-invoicing automates many of the processes associated with traditional invoicing. This reduces manual data entry and minimizes the risk of errors.
Fewer errors: Manual invoice entry can lead to mistakes. E-invoicing reduces this risk through automated processes and standardized formats, helping ensure that information is accurate.
Faster payment cycles: E-invoices can be delivered immediately, allowing them to be processed sooner and shortening the payment cycle. This can improve cash flow and reduce the time between invoicing and payment.
What information must an electronic invoice contain?
An electronic invoice must include essential information similar to a traditional invoice:
- Sender: Include the company's name and company registration number.
- Recipient: Include the recipient's name and company registration number where applicable.
- Issue date: State the date the invoice was issued.
- Invoice number: Include a unique invoice number for internal use.
- Goods or services: Describe the goods or services, quantity, and price.
- VAT amount: State the total VAT amount.
Creating an electronic invoice is similar to preparing a paper invoice; the difference is that the process takes place digitally through email or an accounting system.
Understanding e-invoicing codes and numbers
For e-invoicing in Denmark, businesses need to know several important numbers and codes:
EAN number
This number is essential for sending and receiving e-invoices in Denmark. It is a unique number assigned by Statistics Denmark and used to identify businesses in the e-invoicing system.
GLN number
A Global Location Number (GLN) is an international standard used to identify suppliers and customers precisely.
P number
A P number is a ten-digit production unit number assigned to a business together with its CVR number when the business is established. It is often required to process e-invoices correctly.
CVR number
A CVR number is an eight-digit number that uniquely identifies a Danish legal entity. For businesses, it serves a similar identifying purpose to the CPR number used for individuals.
Implementing e-invoicing in your business
For many businesses, moving to e-invoicing can seem complex. It is important to choose an e-invoicing solution that fits the business's needs and to ensure that all relevant numbers and codes are registered correctly. Many SaaS providers, including Fenerum, offer tailored solutions that integrate with existing systems and make the transition as smooth as possible.
Conclusion
E-invoicing significantly improves how businesses handle invoices. Its increased efficiency, reduced error rate, and faster payment cycle explain why it is becoming increasingly popular. By implementing e-invoicing, your business can quickly benefit from these improvements.
For more insights and solutions tailored to your SaaS business, learn more about Fenerum.
