The e‑invoicing imperative: why CFOs must digitise invoicing in 2025

If you work in finance, you’ve probably noticed how much has changed in the last few years. Manual, paper-based invoicing is quickly becoming obsolete and replaced by real-time, structured data exchange. And it’s not just about efficiency anymore. E-invoicing is moving from a “nice-to-have” to a “non-negotiable”, with new regulations rolling out across the world that mandate how businesses issue and process invoices.

Finance professionals, whether it’s a CFO at a global enterprise or an SMB accountant, are being confronted with the need to adapt their systems. From Germany to France, Poland to Belgium, governments are driving a shift to structured, real-time invoice reporting. It’s a wave of compliance, and it’s moving fast.

But while it might sound like a simple checkbox to tick, e-invoicing can be a strategic opportunity. By embracing technology, finance teams can become more efficient, improve control, reduce fraud risk, and get real-time insights into all spending.

In the sections below, we’ll explore what e-invoicing is, how it differs from traditional methods, and the critical processes and technologies involved. You will also get an overview of the upcoming regulations and how implementing the right technology can help you turn these obligations into a strategic advantage for your team.

Electronic invoicing, or e-invoicing, is the digital exchange of invoice documents between a supplier and buyer. However, it is important to note that not every digital invoice, such as a PDF email attachment) qualifies as a true e-invoice.

According to the EU definition, an e-invoice is “issued, transmitted and received in a structured data format which allows for its automatic and electronic processing”. In practice, this means invoice data is sent in standardised formats (such as XML or EDI) which the recipient’s accounting software or ERP systems can process automatically, without manual intervention. By contrast, a scanned paper invoice or PDF might be sent electronically, but still requires manual re-entry or OCR processing, falling short of the structured, automated criteria of genuine e-invoicing.

By embracing technology, finance teams can become more efficient, improve control, reduce fraud risk, and get real-time insights into all spending.

E-invoicing originated from early electronic data interchange but is now supercharged by global compliance demands. It guarantees that the information on the invoice (including buyer, seller, tax details, etc.) is machine-readable, allowing end-to-end automation from generation to payment posting.

This automation capability is why governments and businesses have adopted e-invoicing: it reduces errors, speeds up processing, and provides real-time transaction visibility. Regulatory bodies are turning structured e-invoices into a fundamental element of tax compliance, so that what was once an efficiency initiative is now a strategic imperative for finance teams.

Traditionally, invoicing has meant paper and PDF. Invoices must be printed, delivered, opened, entered into accounting systems manually, and approved through paper trails. This method is labour-intensive, error-prone, and slow.

By contrast, e-invoicing replaces these steps with a simple digital workflow. Everything is done electronically, from invoice generation to sending, receiving, and processing, which means faster transactions, lower costs with manual handling, and fewer errors.

The table below lists some of the main differences:

E-invoicing transforms invoicing from a paperwork chore into an efficient, automated, and accurate exchange. Finance teams spend less time on data entry and firefighting errors, and more time on value-added work.

The administrative burden shrinks, and both suppliers and buyers benefit from faster invoice-to-cash cycles and fewer disputes.

At its core, the e-invoice process starts much like traditional invoicing: an invoice is generated from a billing system or ERP when a sale is made. The difference is what happens next.

Instead of printing or emailing a PDF, the system packages the invoice data into a structured electronic format, often complying with standards like the EU’s EN 16931 semantic data model. This data file is then transmitted electronically through an e-invoicing network. Companies often use specialised e-invoicing service providers or middleware to transform and route invoices to the correct recipient or their provider, ensuring format compatibility and compliance with local rules.

The most common models for transmission include:

Direct exchange

Businesses can exchange invoices via secure interoperable networks. A prominent example is the PEPPOL network (widely used in Europe), where invoices are sent through access points in a standardised format.

If both the supplier and the buyer are on the network, the invoice travels from one access point to the other and into the buyer’s system.

Clearing through tax authorities

An increasingly prevalent model called Continuous Transaction Controls, or CTC, requires that invoice data be cleared by the government tax portal before or at the same time the buyer receives it.

In certain countries, such as Italy, Mexico, and Turkey, the supplier submits the e-invoice to the government platform, which validates it and forwards it to the customer. This real-time tax reporting adds an extra step, but guarantees authorities see every transaction.

Hybrid and post-audit models

Some systems don’t require real-time clearance but still mandate that businesses periodically report invoice data to tax authorities. Spain’s SII reporting system and Hungary’s real-time reporting of VAT data are good examples of this.

In these cases, e-invoices are exchanged between the supplier and the buyer directly or via networks, and key data is automatically sent to the government separately.

With e-invoicing, the administrative burden shrinks, and both suppliers and buyers benefit from faster invoice-to-cash cycles and fewer disputes.

Although e-invoicing models vary, they all share key technology features. These platforms use secure communication methods, including encryption and digital signatures, ensuring invoices are authentic and unchanged during transmission. In Europe, this is often achieved through eIDAS-compliant digital signatures and secure eDelivery networks.

Modern ERP and finance systems frequently offer built-in e-invoicing capabilities or APIs to connect with these networks easily. Where direct integration isn’t available, companies rely on middleware or specialised service providers for compliance and format conversions. Solutions like Rydoo streamline this process by offering integrated expense management and automated expense compliance checks, helping businesses navigate these diverse regulatory requirements.

Because each country has unique rules and formats, interoperability is crucial. Platforms designed specifically for compliance can handle multiple standards, like Italy’s XML FatturaPA sent via SDI, or France’s UBL format through Chorus Pro, within one unified system.

Once an e-invoice arrives, the recipient’s system automatically validates it against purchase orders or receipts, flags any issues immediately, and queues approved invoices for payment. This automatic validation reduces manual errors, improving accuracy and efficiency.

E-invoicing combines standardised data formats, secure channels, and automation to deliver immediate, accurate invoices that comply with business and regulatory demands. It marks a shift towards the new age of “compliance-first” invoicing digitisation.

For years, companies turned to digital invoicing mainly to cut costs and simplify admin processes. Today, the focus has shifted towards compliance. Governments around the world view e-invoicing as critical for reducing tax evasion and increasing transparency, changing invoice digitisation from an initiative focused on efficiency to a mandatory requirement.

The EU’s VAT in the Digital Age (ViDA) initiative, published in 2022 and rolling out since 2024, exemplifies this shift. The goal is clear: use e-invoicing to improve tax collection, reduce fraud, and simplify VAT compliance. The urgency comes from astounding VAT-related losses, with the European Commission reporting a €89.3 billion gap in 2022 between revenue lost and expected. In response, European countries introduced standardised digital invoicing to track transactions more effectively.

For finance leaders, this regulatory wave means the time for hesitation is over. Delaying action carries significant risks, including regulatory fines and inefficiencies.

However, these mandates bring advantages. Businesses that adopt digital compliance proactively often experience improvements early on, including cash flow improvements, less fraud and more efficient workflows.

Moreover, many organisations are combining compliance efforts with broader technological upgrades, such as ERP system improvements, to maximise the benefits of digitisation. Rather than viewing e-invoicing merely as a compliance task, finance teams are actively designing processes around regulatory requirements from the start, turning obligations into opportunities.

For finance leaders, this means digital invoicing is no longer just about technology. It’s a strategic priority, sitting at the intersection of compliance, efficiency, and innovation.

If e-invoicing hasn’t yet appeared on a finance team’s radar, chances are it will soon, and with a hard date attached. Governments around the world have set deadlines by which businesses must adopt e-invoicing, or face real consequences.

Missing these dates isn’t an option for finance teams. Companies that fail to issue or accept compliant invoices may find their payments halted, effectively freezing revenue streams.

Digital invoicing is no longer just about technology. It’s a strategic priority.

Beyond that, there are direct penalties and operational headaches, including:

Financial penalties

Many countries impose fines for non-compliant invoices, ranging from small per-invoice penalties (as in Italy’s €2 per invoice) to substantial sums that can quickly accumulate, affecting your profitability.

Increased audit risk

Tax authorities treat e-invoicing non-compliance as a red flag. Companies that do not adhere to e-invoicing laws attract the attention of the tax authority, potentially triggering costly and resource-intensive audits.

Operational disruptions

Imagine your processes aren’t ready to receive e-invoices, and your suppliers switch to the mandated format. Your entire processing could halt, impacting cash flow, supplier relationships, and day-to-day operations.

Reputational damage

In the eyes of large customers or government clients, failing to comply signals poor management. Firms that seem unable to manage modern invoicing might look less reliable, which can cost them valuable clients or contracts to more agile competitors.

However, getting ahead of these mandates and embracing e-invoicing proactively carries great opportunities and benefits. By adopting these processes early on, companies position themselves strategically, improve their operational resilience and agility.

Some of the benefits include:

Optimised processes and cost savings

Implementing e-invoicing means automating your invoice handling, which leads to much faster invoice reporting cycle times and lower processing costs. This allows the team to focus on more strategic activities.

Fewer errors and disputes

With data validated up-front and standardised, there are fewer invoice errors to reconcile. That means less time firefighting discrepancies or invoice reissuing. It also means more accurate VAT reporting, avoiding errors that could cause compliance issues.

Fraud reduction

Fake invoices or double invoicing become harder when tax authorities monitor everything in real-time. This can save companies from paying fraudulent bills and reduce internal fraud risk (since the systems create a clear audit trail).

Better visibility and cash flow management

Digital invoices feed directly into analytics, giving finance leaders real-time visibility on payables and receivables. This can improve cash forecasting and allow for strategic financial planning and management.

Competitive Advantage

Organisations that adapt quickly often find they can redeploy resources to more value-added activities. In sectors with thin margins, becoming more efficient and avoiding penalties can truly set businesses apart as reliable and forward-thinking, opening up new market opportunities and partnerships.

Ultimately, e-invoicing is about future-proofing: real-time, digital, and compliance-driven finance. The direction is clear: more digital, more real-time, more compliance. So, today, e-invoicing isn’t just about avoiding the risks, but about positioning your finance teams — and your business — as an advanced, efficient and reliable partner with whom others want to do business.

E-invoicing compliance is becoming a global standard, driven by Europe’s structured approach to digital invoicing regulations. Initially focused on business-to-government (B2G) transactions through EU Directive 2014/55/EU, the EU commission has now extended these mandates to business-to-business (B2B) transactions, driven by initiatives like VAT in the Digital Age (ViDA).

Although each country has its own timelines, formats, and compliance rules, the overarching direction is clear: structured digital invoicing will soon be mandatory everywhere. The European Commission’s long-term vision under ViDA is to harmonise these efforts by 2030. By July 1, 2030, it’s expected that e-invoicing will be mandatory for all cross-border transactions within the EU and that new common standards will be in place.

For companies, this means multi-jurisdiction compliance is the name of the game. A European company might need to handle Italy’s clearance, Germany’s EN16931, France’s upcoming model, and also comply with Brazil’s and India’s rules if operating there. Most businesses are adopting a centralised, global approach to simplify this process: a core system or provider that can handle compliance in multiple countries so that adding a new country mandate is a configuration tweak, not a completely new project.

Adapting to e-invoicing compliance might seem overwhelming, but with a clear approach, it’s a valuable opportunity to modernise and simplify finance operations.

Here is a practical checklist to guide your organisation:

Stay informed on regulations

The first step is awareness, so monitoring e-invoicing and digital tax regulations in the countries you operate is a must.

Regulations are evolving, so make it a habit to check authoritative sources like the EU Commission or trusted advisors regularly, and mark key deadlines on your compliance calendar well in advance.

Assess your current invoicing process and systems

Conduct a gap analysis of how invoices are currently issued/received versus what the new mandates require. Can our system generate invoices in the required format (XML/UBL, etc.)? Do we have the ability to send/receive via required channels (e.g. connect to PEPPOL or government APIs)?

This assessment will highlight if you need to change processes or implement new tools.

Finance teams can turn a compliance challenge into a strategic upgrade.

Invest in the right technology

It’s virtually impossible to comply with e-invoicing mandates manually.

Finance teams should look into solutions or upgrades to their ERP that support multi-format, multi-country e-invoicing, secure data transmission, automated compliance checks, and archival capabilities, but also ones that easily integrate with their existing tech stack, such as Rydoo, to ensure compliance across different countries.

Train your team

Even the best system won’t work if staff are not on board. Conduct training sessions for your finance team (and relevant staff) on the new e-invoicing process and tools, and explain its importance to encourage a culture of compliance and accuracy.

It’s also important to assign internal ownership and define who will be responsible for e-invoicing compliance. Typically, this involves stakeholders from legal, tax, accounts payable (AP), and IT teams.

Engage and communicate with your trading partners

Compliance involves both sides of a transaction. If you’re a supplier, inform your customers that you will transition to e-invoices. Some may need guidance on how to receive or retrieve them.

If you’re a buyer, you may need to onboard your suppliers to send you e-invoices or use a portal. Work with key partners early to test exchanges in the new format. This avoids last-minute issues and strengthens relationships.

Test, pilot, and iterate.

Before any big deadline, run pilot tests. Many countries have a test environment or allow voluntary use before mandates, which you can use.

Internally, simulate a full cycle, document any issues and refine your configurations. After go-live, gather feedback from users and continuously improve the process.

Ensure end-to-end compliance (beyond the invoice)

Compliance doesn’t end with sending the invoice. Make sure VAT reporting matches your e-invoice data and that reconciliation controls are in place. Update policies to ensure only compliant invoices are issued or accepted.

If you operate internationally, maintain a compliance matrix covering country-specific requirements such as formats, portals, and retention rules.

By following this playbook, finance teams can turn a compliance challenge into a strategic upgrade. It’s also wise to have contingency plans: know what to do if the system has an outage or if a trading partner can’t handle e-invoices on their end.

If needed, get expert help. Setting up a multi-country e-invoicing compliance framework can be complex, but consultants and solution providers’ experts can save time and prevent mistakes. At Rydoo, our team of compliance specialists is ready to help businesses ensure their expense and invoicing processes meet all local regulations.

With the right preparation, this transition is easier than it seems.

E-invoicing compliance marks the start of a shift toward real-time, data-driven compliance and finance digitisation. Finance leaders and professionals should be looking ahead to anticipate future trends and ensure their teams and systems are ready for what’s coming.

The trajectory of invoicing is unmistakably digital and compliance-centric, and today’s finance leaders are expected to oversee financial strategy and the tools that ensure accuracy, speed, and adherence to ever-evolving regulations. Those who lean into these changes will avoid penalties and unlock faster processes and richer data.

As you fortify your finance team for the future, remember that you don’t have to navigate this alone. At Rydoo, we help companies stay ahead by automating and simplifying expense and invoicing compliance. Our experts track regulatory changes and keep our platform up to date so you don’t have to.

Want to know more? Reach out to our team to receive personalised support and more insights.

Compliance is just the beginning. What follows is a smarter, more agile finance function, one where data flows in real time, audits become easier, and strategy takes the lead.