Invoicing Requirements: What You Don’t Know May Cost You

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“Can I have a receipt with that?” and “Can you send me an invoice?” are simple requests that are uttered countless times each day. Chances are that whoever you say it to, will instantly know how to accommodate you … as long as that person is in the same country as you and speaks the same language. As with many other processes, the concept of invoicing can differ greatly from one market to the next, and if you don’t take the time to understand those differences – the results can be disastrous.

Maybe you have heard tall tales of others who have ‘gone global’ before you and think you know what to expect. Perhaps you already have a checklist that reads something like this:

  • Translate to local language
  • Convert to local currency
  • Calculate VAT tax

If you have that list handy then you are well on your way, but nowhere near the finish line yet. Unfortunately, there are quite a few other items to throw on that list before you are ready to consolidate or automate your invoicing in a new market. The first two steps in consolidation or automation of invoices are actually to confirm whether those two processes are an option within local regulations. As often as not, invoicing is required to be in hard copy as opposed to electronic delivery and many countries prohibit or penalize you for invoice consolidation.

Other fun facts to check for include invoicing requirements and calculations. Too often, organizations belatedly realize that VAT tax may not be accurately captured in a tool if that calculation isn’t run at the right point in the process. But then… VAT tax was already on your checklist right? Most countries now require that other taxes be captured on an invoice as well – this could be urban taxes or a social insurance tax, or some other staffing tax, but failure to accurately convey each requirement on the invoice can result in misfiling, penalties, or worse… more taxes. When possible, you can work with a tool provider to account for many of these requirements in a given market – but where a tool provider isn’t available, or isn’t allowed to generate the invoices – you need to build a process that will get the job done right the first time.

With all of that to consider, you may start to wonder if maybe it isn’t easier to let the suppliers continue to manage the invoicing themselves after all. Some days, we might even agree with you. But even on the rare occasion when that is an ‘easier’ option, it is never the safer option, or the most efficient, or the least expensive. In at least 60 countries, an employer can be named as the obligator or be held responsible for any staffing agency not in compliance with local invoicing or tax requirements. Centralized control and visibility into those service providers can mitigate that risk, and in the end, simplify the process and overhead associated with all local invoicing practices.