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Avalara introduces E-invoicing and Digital Reporting API

Avalara launches multinational e-invoicing API


US-based indirect tax software specialist Avalara has released an application programming interface (API) to streamline e-invoicing for multinational organisations.

6th Jun 2023
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Avalara’s E-Invoicing and Live Reporting API is designed to integrate with accounting, e-commerce and invoicing systems so that businesses can plug into e-invoicing networks in different countries. 

The target customers will be in finance departments operating across national boundaries that already have to manage the quirks of different sales tax regimes. As part of a global move to digitalisation, many jurisdictions are enacting mandatory e-invoicing regimes to reduce fraud and increase their tax revenues.

Following two years of what one commentator called “mandate mania”, more than 60 countries worldwide have announced or already approved e-invoicing rules and formats. According to Avalara, that number could more than double by 2030. 

The e-invoicing trend is closely paralleled by the growth of digital reporting requirements, for example around live reporting of invoice data and registering international sales and purchases.

Organisations operating across Europe and other regions that use e-invoicing can now buy Avalara’s API from its ERP or accounting software marketplace. Once they’ve signed in and connected it to their invoicing engine, users can file the required invoice formats and reports for each jurisdiction. 

The API can also facilitate digital signatures and archiving requirements and brings all the electronic invoice data into one on-screen console so users can track progress and any alerts or error messages returned by tax authorities, the company said.

The API is based on the global Universal Business Language data standard, using code from German developer Inposia Solutions, which Avalara acquired two years ago. Since then the program has been refined to create an integrated interface for all the different national requirements. 

With e-invoicing taking off around the world, companies that opted for local solutions in different regions have been struggling to manage all the different requirements, for example around data fields and formats as well as how the invoices and their data are shared with tax authorities and received by customers. 

“Given the number of e-invoicing and digital reporting mandates in place or confirmed on the regulatory roadmap, tax and finance leaders are now viewing this strategically and holistically, looking to select and implement a global and scalable e-invoicing solution,” said Alex Baulf, senior director of e-invoicing at Avalara. 

The EU’s e-invoicing and digital reporting initiative has been a catalyst for demand, with France, Spain and Poland all mandating e-invoicing from next year, affecting up to 10m businesses. “Several other EU member states will also introduce e-invoicing over the next 18 months. But this isn’t just a European issue,” said Baulf.

US pilot project 

Though there’s currently no tax-driven mandate for e-invoicing in the US, a pilot e-invoice exchange market is already up and running. Baulf explained that aside from meeting international compliance requirements, large enterprises can gain from more automated e-invoicing by optimising payment and collection cycles with fewer costs and resources involved.

VATCalc CEO/founder and former Avalara vice president Richard Asquith agreed with this analysis in April’s Tech Pulse e-invoicing webinar. “E-invoicing is a wonderfully efficient way to improve business communications,” he said.

“The start of our symphony has been a warm-up from the tambourine section - Spain and Italy.” The EU Commission stepped in to regularise intra-EU standards in response to complaints and pain that business taxpayers suffered because these early versions were all slightly different, he explained.

“We mustn’t forget that this is a global phenomenon that started in South America,” said Asquith. “China, Malaysia, Australia and Japan are all doing their own versions of this. Everyone’s cottoned on. Germany is introducing e-invoicing in January 2025, [followed by] Belgium, France and other European countries. They're all falling over to do this. To continue doing trade in the EU, someone in the UK [or the USA] may have to accept these e-invoices."

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