E-invoicing: an essential link in your Source to Pay strategy

E-invoicing is gaining ground, and not without reason. With the arrival of European regulation, organisations will be required from 2028 to send and receive only e-invoices. But beyond the need to meet legal requirements, adopting e-invoicing also brings benefits. It’s a strategic choice that improves operational efficiency, reduces costs, enables faster payments and provides better insight into the financial situation. But organisations that think this is the answer to every digitalisation challenge in the spend process are in for a disappointment. “It’s definitely not the final solution. It’s precisely when you look beyond invoice processing that you discover where the real gains are,” says Ruud Hoeben, Source to Pay Consultant at Spendlinq.

It’s a fact: e-invoicing is becoming the European standard. Digital reporting of transactional data (e-reporting) will also be required. For government organisations, this has applied since 2019. But the urgency is growing in the private sector too. Under the proposed VAT in the Digital Age legislation (ViDA for short), e-invoicing (and later e-reporting too) will become mandatory in phases for B2B transactions within the European Union from 2026. In other European countries, this obligation has already been introduced or announced. The Netherlands follows in 2026, with an implementation obligation to come at a later stage for specific sectors and transaction types.

“The idea behind the new legislative proposal is to make the VAT system future-proof,” says Ruud. “In short, the measures enable EU countries to improve efficiency, minimise VAT fraud and improve transparency.”

A link in the process

“But e-invoicing also has clear benefits for organisations themselves,” Ruud continues. “Invoices are checked automatically, processed faster and no longer need to be booked in manually. That doesn’t just save time, it reduces errors and speeds up the payment cycle. Archiving and retrieving invoices also becomes a lot easier.” Even so, Ruud warns against expecting too much. “E-invoicing is definitely a good step if you want to optimise, but it mainly focuses on efficiency at the end of the process. If you base your entire digitalisation strategy on it, you’ll miss the real opportunities.”

After all, anyone who focuses only on invoice processing forgets the steps that come before it: properly recording commitments, automating orders and matching invoices to the right order or receipt. “Without a well-structured Purchase to Pay process, you’ll still end up doing a lot of manual correcting, checking and chasing. Even if the invoice arrives digitally.”

Data as the foundation

The challenge, then, isn’t sending or receiving a UBL or Peppol invoice, but having the right data to match that invoice automatically. Think of accurate order references, goods receipt confirmations, contract links or budget codes. “E-invoicing without good master data and processes is like a motorway without exits. The traffic flows, but nobody knows where it needs to go,” Ruud says with a smile.

A change in supply chain collaboration

What’s more, e-invoicing requires more than technology alone. Suppliers need to be connected, systems need to be able to communicate with each other and internal processes need to be adapted. Some suppliers aren’t yet able to send e-invoices or use different standards. And within organisations, the knowledge or capacity to guide the implementation properly is sometimes lacking. “It’s a change in collaboration across the entire chain, and that requires the right attention,” says Ruud.

Speeding up processes

Still, he sees e-invoicing as an important step, as long as you put it in the right context. “See it as a means to speed up processes, not to replace them. It makes existing processes faster and more accurate, but only if the underlying processes are already in good shape,” Ruud explains. “The real digital transformation of the Source to Pay chain doesn’t start with the invoice, but with the purchase request. By registering as many orders as possible up front (including for complex categories) and linking them properly to contracts or budgets, you lay the foundation for automation further down the chain.”

Control, compliance and cost management

Effective Source to Pay solutions understand this and support requesting, approving, ordering, receiving and invoicing in one coherent way. They offer e-invoicing as an integral part, but combine it with things like automated three-way matching, real-time spend dashboards and contract-based procurement. “It’s about the full picture,” says Ruud. “Only then do you really make progress on control, compliance and cost management.”

A broader Source to Pay strategy

For organisations that want to implement or expand e-invoicing, Ruud advises always placing the topic within the broader Source to Pay strategy. “Don’t just look at the technical connection, but also at process design, data quality, supplier adoption and change management,” he says. “And stay realistic about the impact: it’s an important step forward, but not the only one you need to take if you want to create lasting value.”

Ruud concludes: “E-invoicing is a good start, especially now that legislation is speeding up. But if you really want to get a grip on your spend, start with insight, ownership and smart process design – not just with a digital invoice.”