Is PDF Invoice an Electronic invoice
While PDFs have been widely used for invoices, their limitations in automation and compliance are becoming increasingly apparent. E-invoicing, however, offers a future-proof solution by eliminating manual data entry and streamlining financial processes. This guide explores how to make the transition from PDF to e-invoices smoothly and efficiently.
Isn’t a PDF also an e-invoice? Although you may receive it digitally, it is not. A PDF invoice still needs to be processed in the same way as a traditional paper invoice, which involves manually creating and sending it, having a human view it, manually extracting and verifying the data, and then making the payment. An e-invoice, on the other hand, does not look like a traditional invoice at all; it resembles a piece of code. This code contains all the same information that appears on the PDF, but in a format that can only be understood by a computer. As a result, the entire process is automated, requiring little to no human intervention.
In this article, we’ll cover:
A Quick Explanation
Invoices are most of the time directly exchanged between two parties and in this so-called two-corner model, two parties make arrangements on the invoice format they use and about the technical connection, meaning some still use paper invoices, most PDF invoices and some already transitioned to e-invoices.
Many companies often think that e-invoicing is sending invoices by e-mail. But e-invoicing is more than just sending the invoice digitally. It is also the electronic booking, payment and collection of the money and most importantly, it is not a human readable invoices. It is made for the machines, a piece of code, allowing the process to be automated in the software, without any human interaction needed. An example, let’s say you recieve a PDF invoice. You still have to manually put data into a systems or sometimes correct it.
Therefore electronic invoicing leads to a major save of costs. As much for the sender as the receiver. Since e-invoicing is digitalising invoicing for the sender as well as the receiver, a PDF-invoice is not seen as electronic invoicing.
Key Differences for Businesses
| E-invoice | PDF Invoice | |
| Format | Structured, machine-readable (e.g., XML, JSON) | Unstructured, human-readable |
| Processing | Automated (no manual input needed) | Manual or OCR processing required |
| Compliance | Often meets tax authority standards | May require additional steps for compliance |
| Speed | Faster exchange and processing | Slower due to manual intervention |
| Integration | Works directly with ERP/accounting systems | Requires data extraction or manual integration |
| Audit Trail | Supports real-time tracking and verification | Limited or manual tracking capabilities |
What is an PDF invoice?
Even though PDF invoices are created, sent, and received electronically, their digital format doesn’t support automated data processing. For the information to be processed, it has to be entered manually into the accounting system. Moreover, a PDF invoice does not comply with the standards and mandates of e-invoicing.
Imagine it like this; a PDF invoice present information in a human-readable format, like paper invoices, in electronic form. For fully automated electronic processing, the invoice information contained in a PDF must still be entered into the accounting software, either by hand or using additional systems (such as OCR).
| Advantages | Challenges | |
| Ease of Use | Simple to create and share. | Requires manual data entry, increasing the risk of errors and slowing processes. |
| Cost | Cost-effective; no advanced technology needed. | Often does not meet legal standards for tax reporting. |
| Scalability | Universal format; works on any device. | Not suitable for businesses handling large volumes of invoices. |
How To Create A PDF Invoice
The easiest way to make an invoice is to go online and find an invoice template you like, then simply use it for all invoices going forward. Many invoicing software programs, like Apollo; offer a professional-looking invoice template that allows you to add new information every time you issue a new invoice. All you have to do is choose a client and product or service from the list (You created once and forever) and the invoice is issued, from the app. However if you don’t use the invoicing software the usual process would look something like:
What is an E-invoice?
An e-invoice is a digital document created, transmitted, and received in a structured electronic format; being a piece of code; that enables it to be processed automatically by the recipient’s accounting or ERP system. Common format is XML and is usually sent via secure networks like PEPPOL or other government-approved platforms.
It sounds like a lot more work than a normal PDF invoice, but stand with me. The key difference between an e-invoice and a scanned paper or PDF invoice is that an e-invoice is created in a specific structured format, being a piece of code. Therefore it is not readable to a human eye and you’d have to transform it to pdf ot read it. That allows it to be created, sent and received automatically, without human interaction from one software directly into another with no manual mistakes in the process.
Why You Should be Converting PDF Invoices to E-invoices
Electronic invoicing is taking over the world. According to a study commissioned by Billentis, 55 billion e-invoices will be exchanged between trading partners worldwide by 2025, marking a 20% annual growth rate. But why is that? Because e-invoicing adds value to your business while freeing up your team to work on other growth areas. Here is some benefit of leaving PDF files behind and changing to e-invoicing:
Challenges When Converting PDF to E-invoice
Converting PDF invoices to e-invoices can be challenging and companies should be aware of certain problems that can occur:
One major issue when attempting to convert PDF to e-invoice or other XML formats is the loss of crucial invoice data. PDFs are often inconsistent in design, and relying on OCR tools can lead to data extraction errors.
Formatting issues are another problem when converting from PDF to XML. Because PDFs vary greatly in layout, converting them to XML can result in misplaced fields, incorrect data formatting, or incomplete conversions.
Once a PDF invoice has been converted to XML, it’s essential to validate the generated XML file to ensure compliance with the required standard, for example UBL.
How to Transition from PDF to E-invoicing
Some countries already mandate e-invoicing, some support it. Whatever the reason for transition is, here is the process how to integrate electronic invoicing into your system:
What if You Business Partner Can’t Send Them?
You are using e-invoicing, but your trading partner cannot send an electronic invoice, whatever the reason may be. You can take the PDF invoice and manually upload it into the system. To streamline the process and make it easier it’s best to use one of the two tools:
Space Invoices Makes E-Invoicing Effortless for Your Business
Space Invoices provides a seamless solution to help businesses integrate e-invoicing with their existing workflows effortlessly.
Powered by cutting-edge technology, our platform enables you to create, send, and process e-invoices compliant with global standards in just a few clicks.
Why choose Space Invoices for your e-invoicing needs?
Get in touch to elevate your invoicing process and stay ahead of your competition.
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