How to make a proper electronic invoice?

Electronic invoicing is at the heart of the challenges of dematerialization for all businesses. The paper invoice is disappearing to be replaced by the electronic invoice, which offers many benefits to companies, such as faster processing and financial gains. But all these changes impose questions about electronic invoicing and especially the most important question of all: how to make an electronic invoice in practice?

What is the procedure to follow? What information needs to be entered? How to use the Internal Revenue Service website to create an electronic invoice without errors?

Appvizer provides you with all the answers in this article.

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How to make an electronic invoice: where to start?

To make an electronic invoice, nowadays it is easy to find software that takes care of the process entirely quickly and effectively. Most are paid, but there is also a free solution that requires a little more familiarity made available by the Chamber of Commerce.

However, if you want to be the one to draft your electronic invoice yourself, you can take advantage of the special service offered by the Internal Revenue Service.

The Internal Revenue Service, thanks to its computer system called the Interchange System, after receiving electronic invoices from the portal of the Internal Revenue Service or from a software allows you to:

• Verify that electronic invoices are filled out correctly, the authenticity of the signature.
• Deliver electronic invoices to the recipient.

Entities eligible for this service are as follows:

• all VAT holders
• flat-rate, minimum and farmers (they do not have the obligation, so the choice remains optional)

The interchange system is also a convenient system for the Internal Revenue Service and the MEF, as they can check all economic transactions performed for taxpayers subject to VAT. Both B2B (trade between companies) and B2C (trade between companies and customers) transactions will be scrutinized.

Registration on the Internal Revenue Service website.

The first step is to register on the Internal Revenue Service website. You must click on the registration icon found in your "Restricted Area."

At the time of registration the following data must be entered:

• tax code;
• last tax return;
• entity through which the above-mentioned return was filed;
• total income.

Once registration is completed, the web service will email you the personal PIN that will allow you to access your personal area. The code you will receive by e-mail contains only 4 of the 6 digits that make up the PIN. The missing two digits will be mailed within two weeks maximum.

A less time-consuming and complex procedure is offered to National Services Card holders: they have the advantage of receiving the PIN in its entirety when registering on the Internal Revenue Service website.

If you have the SPID digital code, you can safely access the personal area without doing any additional procedures.

How to make an electronic invoice on the website of the Internal Revenue Service

Once you have registered with the portal of the Internal Revenue Service, you can access your personal area. Among all the services offered, you will also find the section dedicated to electronic invoicing, from which you can create, send and receive electronic invoices.

All you need to do is go to the "Invoices and fees" section , choose the type of invoice from ordinary, simplified or PA invoice to proceed with the creation of your electronic invoice.

The data for compiling the electronic invoice

The electronic invoice can be of different types: ordinary, simplified or PA (Public Administration). However, when drafting the electronic invoice, there is some information that absolutely must be mentioned:

• the generalities of the issuer: company name, VAT number, tax code, legal address;
• the generalities of the customer: apart from the above-mentioned data, the recipient code must be added, an essential element through which the interchange system can send the invoice to the recipient;
• the generalities inherent in the invoice: invoice number, date of issue, amount for goods and services subject to payment; VAT rate. It is also necessary to specify whether exemptions are to be considered (citing the relevant article of law) or whether split payment has been applied;
• the reason for payment;
• the generalities of the contract: this last item is only required if the electronic invoice concerns works for public works or financed by community grants. If this is the case, then the GIP code (tender identification code) and the CUP code (unique project code) must be indicated. Without these two elements, public administrations will not be able to account for the payment of the invoice.

If all the fields on the electronic invoice have been properly filled in, you can move on to the review by accessing the "Summary" section. If you have not found any errors, you will be able to confirm. Once you have also received the okay from the "Receiving System," you can store the e-invoice on your PC so that you can add the digital signature.

Sending the electronic invoice

As we just mentioned, you can save the e-invoice, created thanks to the Internal Revenue Service website, on your PC by clicking on the "Save XML" (eXtensible Markup Language) item. XML is the only format available and validated by the interchange system.

Once you have saved the file on your computer, you need to do one more manipulation before final submission: adding the digital signature. You will need to equip yourself with special software to affix the digital signature to the document.

The electronic invoice, specially completed and signed, must then be uploaded to the personal area created for sending electronic invoices. You will need to select the "Transmission" option and upload the .XML file.

After the electronic invoice has been sent, the sender will receive a message confirming transmission. In this notice, the time, date and ID code are indicated. You will be able to check the progress of the operation always from your personal area.

The step-by-step procedure: tips for not making mistakes

• Remember that the first time you try to create an electronic invoice, you should pay close attention to data entry, especially the supplier's data. The easiest way to make sure you have entered all the information correctly is to consult the Tax Registry. You will find a pre-formatted template with all the data you need, which you can change as needed. The only field that cannot be changed is the VAT number field.
• When you enter the data of the recipient of the electronic invoice, it very often happens that the field "Recipient Code" is left out or is filled in incorrectly. This can cause problems when receiving the electronic invoice. If the telematic address is missing, in fact, the electronic invoice cannot be delivered to the right recipient. The telematic address for receiving the invoice can have three different types. Apart from the recipient code for the electronic invoice, there are two other possible ways:
  • The PEC address or PEC box. When filling out the invoice, the supplier should fill out the following entries according to these rules:
    • the recipient code will be assigned the value "0000000" (seven times zero).
    • In the "PEC Recipient" box, the supplier should enter the PEC address provided by the customer.
  • The simple numeric code "0000000 " (seven times zero) if the customer has not proceeded to communicate any telematic address (PEC or Recipient Code). If the client wishes to retrieve his electronic invoice in the future, he should go to his reserved "Consultation" area of the "Invoices and Receipts" portal.
    • If you use the procedure offered by the Internal Revenue Service, the proposed template is for an ordinary invoice with the data established by Article of Law 21 of Presidential Decree No. 633/1972. In case you need to enter additional information required by a non-ordinary invoice, the website allows you to enter it manually. Thus, you will be able to add withholding tax or social security fund in case of invoices issued by a professional, the entry of discounts or surcharges or other required generalities.

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Why choose software over the Internal Revenue Service site.

Of course, the Internal Revenue Service site is available so why choose to adopt software? Many companies prefer to use software such as Invoices in the Cloud instead of the Internal Revenue Service site because by using software they can benefit from several advantages that make the invoicing process much easier and faster.

First of all, the most common electronic invoicing software has essentially 3 features:

• The encoding of the invoice file in XML format automatically. This is a format that identifies the different key elements of the invoice and allows them to be read by the Interchange System. Also given the security of an XML layout, it is more difficult to counterfeit it.
• Sending the invoice to the Interchange System:Once the invoice has been compiled, software allows the invoice to be sent to the Interchange System quickly and easily-often with just one click.
• A Unique Recipient Code to be provided to customers to receive passive electronic invoices within the software. With this 6-digit alphanumeric code, the Interchange System identifies the recipient of the electronic invoice.

All of these tools ensure that electronic invoices are stored in accordance with regulations for 10 years. In addition, in most software, the digital signature is automatically affixed by the software alongside a time stamp.

But it doesn't end there. Electronic invoicing software often goes beyond simple invoicing. In fact, they integrate broader accounting-related features that allow for centralization of information and streamlining of processes.

For example:

• Integrated payment management
• Issuance of transport documents
• Issuing quotes and subsequent transformation into invoices
• First note
• Payment reminders

All these extra features are not to be underestimated when it comes to centralizing the information that will inevitably be tied to your invoicing processes. As much as the Internal Revenue Service website is a valuable tool, for large volumes of invoices looking for a more comprehensive solution means being able to go further and streamline your processes. Sometimes taking an extra step in choosing your tools means gaining a competitive advantage." .

Do you have all the cards in hand to start making your first electronic invoice?