Is InvoiceNow the same as e-Invoice?

When I first encountered e-invoicing, I, too, was confused. The complex terminology made it challenging to understand the concept.

What is e-invoicing, and what would be the difference between a traditional invoice I am issuing now and an e-invoice?

I email my clients a PDF invoice, and sometimes, I send them a beautiful coloured HTML email invoice with a pay button where they can click and link to the payment gateway to pay for the outstanding. I thought I was already electronically invoicing, a.k.a. e-invoicing. But I was wrong. Although PDF or HTML email invoices are digital and paperless, they are not e-invoices. An e-invoice is distinctive.

E-invoicing is like a telephone network.

To make a phone call, you need a phone. Therefore, you need accounting software (e.g., MoneyWorks) with an e-invoicing feature. With a phone without a phone line, you still cannot make a phone call, so you need to subscribe to a phone line from the telco. Similarly, you must subscribe to an e-invoice service provider (e.g., Link4), the access point, to send and receive e-invoices.

You can only call your friend if your friend owns a phone [with a line, of course]. Hence, to send and receive e-invoices, both seller and buyer must be on the e-invoice platform.

Does that make sense so far? If not, don't worry, we'll get there.

Let's take a look at how the e-invoicing work.

First, generate an e-invoice from your accounting software; then, upload it, with a click of a button, to the e-invoice service provider portal that you have subscribed to. The e-invoice contains your and your client's e-invoice ID, the invoice reference number, date, products, quantity, and price. You could imagine the e-invoice ID as a phone number or mailing address so the service provider knows who the sender and recipient are.

Your e-invoice will then route from yours to your customer's provider, and your customer will then download it and seamlessly import it into their accounting software.

How about Peppol?

Peppol stands for Pan-European Public Procurement Online —the backbone of e-invoicing, which we [Singapore] use. You may search the web to find out more if you are interested. Still, as a layperson, you do not need to understand —if you want to make a phone call, you do not need to know how the telephone exchange works; it just works. —Your accounting software consultant will give you more information on who the e-invoice provider is and how to subscribe.

Lastly, what is InvoiceNow?

You may think of InvoiceNow as a local name for e-invoice in Singapore, just like we have PayNow for electronically transferring money. It's just a name.

Do you need to adopt e-invoicing?

Newly incorporated companies [in Singapore] that voluntarily register for GST must comply; please check with your accountant. Although it is not mandatory for existing companies, early adoption would have an edge. However, e-invoicing does reduce time costs, eliminates human error, and reduces the environmental impact of paper-based invoicing.