The documents are stored in multiple forms, so that they are directly or indirectly processable by a computer, while most of the times it is not possible for them to be readable by a human:
- Non-structured data: Computing systems cannot automatically access the file data. Those include spreadsheets, word processing files, html files and image files.
- Structured data: The data can automatically be read (from the file) by computing systems. These include standardized forms, i.e., data files based on publicly published specifications such as EN 16931, UBL, CIL, EDIFACT, etc., as well as non-standardized data, i.e., internal data files whose structure does not follow publicly published specifications.
The purpose of these files is the visualization of the content, such that it is readable and processable by a human. These include the following file formats:
- PDF: Digital document format (common format in email attachments).
- jpg, png, gif: Common image types.
- TIF: Common image file type in scanning solutions.
The invoices that comply with the European standard of Electronic Invoicing must always follow a standardized form, i.e., all of the invoice data must be stored in a structured data format.
A structured electronic invoice contains data (from the supplier) in a format readable by software, which can automatically be entered into the Accounts Payable (AP) system of the buyer without requiring manual entry or processing.
When we compare the electronic invoices to paper ones, it is useful to know that paper invoices have three characteristics. More specifically, paper invoices:
- contain details such as amounts, descriptions and quantities,
- present this data in a visual form so that they can be read by a human and finally,
- Due to their physical form, are managed and exchanged by hand.
Digital image files, pdf files and other digital, visual representation forms of invoices relieve the companies from paper and allow the management and archiving of the invoices in a more effective way than traditional invoicing methods. Still, these forms require the reading of the invoice by a human only, as well as the manual entry and processing in AP/ERP systems.
On the contrary, electronic invoices, thanks to the structured form in which they store the invoice data, allow direct entry in AP/ERP systems through an automated procedure. The visual representation of the invoice data, while not the main goal of digital representation of invoices since these formats are used for machine to machine communication, is strong and most modern implementations of Electronic Invoicing provide for download functionalities in pdf or physical printing of the documents in their functionality, in addition to online visual representation.
A readable – by a human – version of the invoice can be generated for reading purposes and to include in a structured message, but is not considered part of the invoice itself.
E-Invoices are therefore not:
- Invoices in files of non-structured data (which are issued in a pdf or Word form)
- Invoice pictures in image file formats (.jpg, .tiff, etc.)
- Invoices in a non-structured form (.html in a website or an email)
- OCR (invoices from paper scans)
- Paper invoices sent as an image via fax.
The use of Electronic Invoicing requires two basic functionalities:
- The e-Invoice must be created with a standardized structure.
- The e-Invoice must be transferred from the issuer’s system to the recipient’s system.