As new e-invoicing mandates and real-time reporting regulations continue to be enforced globally, how ready are organisations for these changing compliance requirements? sharedserviceslink and Tungsten Network recently conducted a compliance readiness survey with finance professionals across the world to understand how they’re navigating these ongoing changes.
The survey provided insight into respondents’ most pressing concerns regarding current e-invoicing requirements and their readiness levels to meet future mandates.
Read on to discover some of the survey’s key findings, along with four critical dos and don'ts that organisations must consider to future-proof their compliance efforts.
How aware are global companies on compliance requirements?
As governments continue to crack down on e-invoicing compliance, it’s imperative for companies to be aware of regulatory changes and keep up-to-date with the upcoming requirements. Out of over 100 survey respondents, predominantly from Europe and North America, 58% said that their finance department looks after compliance, while others shared that tax and cross-functional teams managed responsibility. A further 6% of people admitted that they either weren’t sure, or didn’t have anybody taking authority for compliance efforts.
Perhaps more worryingly, one-third of respondents were ‘not very aware’ or ‘unaware’ of changes to compliance regulations, including archiving, real-time reporting, and country-specific e-invoicing requirements.
Key concerns about managing these changes
E-invoicing compliance is becoming increasingly complex as each country enforces different rules and regulations which global organisations are expected to adhere to. So, it’s unsurprising that 32% of companies reported concern that their strategies are too regional.
With constantly shifting rules and requirements, e-invoicing mandates can be difficult for internal teams to navigate alone. As such, 31% of respondents shared their concern about the cost of maintaining compliance if they manage it themselves. Meanwhile, 25% are overwhelmed by current or impending changes.
Other worries include lack of compliance personnel (23%), ERP limitations (18%), no compliance strategy in place (18%) and data quality issues (14%).
That’s why, with the cost of non-compliance being so high both financially and reputationally, it’s always important to work with a third-party provider who can provide expert guidance, the right tools and data, and ensure compliance so that you don’t have to.
Compliance readiness results
When it comes to compliance readiness, it’s important for organisations to take a proactive approach, instead of a reactive stance to complying with new requirements. Reactive compliance consists of decentralised and project-based efforts which are disruptive and non-scalable. To be proactive, companies need to have centralised monitoring, a global and future-proof strategy, and early e-invoicing adoption.
When it comes to compliance readiness, respondents claimed to be predominantly cross-functional (30%), centralised (41%) and proactive (47%). Meanwhile, 10% were decentralised, 14% had siloed efforts, and 34% were reactive to requirements. Plus, of the cross-functional teams questioned, only 15% were prepared for compliance changes.
With these challenges in mind, it’s easy to understand why only 23% of respondents were ‘very confident’ that they can meet the changing compliance requirements on time. The majority have some level of uncertainty.
It’s also clear to see that a proactive approach to preparing for e-invoicing mandates is key, with 98% of ‘proactive’ respondents either ‘somewhat’ or ‘very confident’. Meanwhile, 70% of companies who take a reactive approach were ‘not very confident’.
Dos and don’ts of managing e-invoicing compliance
So, how can organisations ensure compliance readiness and take a proactive approach to managing e-invoicing changes? sharedserviceslink and Tungsten Network have shared their four top dos and don’ts.
- Think globally and cross-functionally - Collaboration, information sharing and global conversations will increase efficiency, secure a future-proof strategy and drive AP to be viewed as a strategic partner to the business.
- Use mandates as a business catalyst - Use the changes to drive transformation and automation across the AP function; this could result in internal cash flow optimisation, improved data insights, and better cross-functional communication.
- Consider cost and risk avoidance value - The costs of not being compliance ready include audit fines, reputational damage, missed VAT reclamation, business critical system disruption, and the time costs of designing and redesigning compliance efforts.
Consider outsourcing to an e-invoicing vendor - Working with the experts provides ease, peace-of-mind, efficiency, and guarantees that your strategy is future-proof.
- Think locally and within siloes - A reactive, siloed approach will result in operational inefficiencies, a lack of collaboration, fractured processes and poor scalability.
- Miss an opportunity to improve supplier relationships - Since the pandemic, there’s been a power shift between suppliers and buyers meaning businesses need to keep suppliers happy. Provide status visibility, pay on time, and support supply chain health.
- Forget hidden mandate costs - Remember to factor in expenditure such as salaries, expert consultant fees, training, ERP, and more.
- Count on in-house capabilities - Compliance is hard and resource intensive. By relying on your internal team, you would need to hire the right skills and expertise, allocate a program lead to each compliance project, and commit a lot of time and resources.
Get compliance ready with Tungsten Network
Managing e-invoicing compliance can be incredibly daunting, particularly given the global complexities surrounding the mandates. With more and more regulatory changes expected over the coming years, it’s imperative to work with experts who can help you to navigate the changes with ease. Tungsten Network has the world’s largest compliant business transaction network, with a dedicated team working to keep you up-to-date with compliance, so you can focus on what you do best, wherever you operate.
Find out how Tungsten Network could help you manage global I2P compliance mandates by contacting us today.