During a time of economic headwinds and reduced consumer demand due to a cost-of-living crisis, many businesses are looking at ways to expand. One of the best ways of doing so is taking your business international. Rather than simply providing goods or services on home soil, businesses that are hungry for growth are beginning to conduct their affairs abroad. But doing so comes with a whole host of logistical challenges – one of which is invoicing.
If you’ve recently gone international or are hoping to do so in the near future, you might be wondering how you can smoothly invoice overseas. We delve into what tax e-invoicing is and why businesses should be considering it below.
What is tax e-invoicing?
One of the most notable digital breakthroughs in the last few years is tax e-invoicing. At its heart, e-invoicing is the process of using electronic devices to automatically report data transactions between businesses.
Tax e-invoicing is preferred by governments as it helps increase transparency and ensures VAT accuracy across boards. This is especially helpful given that 38,000 businesses in the UK are regular exporters.
What are the benefits of tax e-invoicing for international companies?
- Reduced costs – With business costs rising across the board, many businesses are looking to cut costs where they can. One way of doing this is by using tax e-invoicing. Compared to paper invoices, e-invoicing is quicker and simpler to archive.
- Makes your business competitive – In 2023, businesses that fail to digitalise are being left behind. As well as ensuring your website is up to scratch, it’s important to digitalise other areas of your business. This includes tax e-invoicing.
- It’s simple – Rather than spending countless hours worrying about whether you’ve miscalculated tax or could be deemed as not compliant, tax e-invoicing takes the stress out of month end. By simplifying the VAT calculation process, you can focus on other areas of the business.
- Prevents fraud – Tax e-invoicing makes VAT reporting more transparent. This means that it’s far easier to detect fraud, making e-invoicing a safe alternative to the traditional paper trail.
- Reduces the risk of human error – No matter how great your finance teams are, doing business abroad is complicated. This means that there is a higher chance of human error. Tax e-invoicing does the hard work for you so that you can keep conducting business abroad. By having an additional check in place, you can be confident you’ve not made any blunders in the invoicing process.
Final thoughts…
For many international businesses, going digital isn’t easy. Especially when it comes to invoicing and tax matters. But the good news is that by going digital, you can get rid of painstaking VAT calculations and free up internal resources to focus on other things. What could be better than that?
