Electronic invoicing (e-invoicing) - setup, formats and UK rules

• Cash flow challenge: I keep hearing about e-invoicing, but I’m not sure how to set it up or whether my business is using the right format to get paid quickly.

• Perfect for: UK businesses looking to modernise invoicing and improve cash flow efficiency.

Novuna helps businesses reduce delays by providing fast, flexible funding and helping you set up better invoicing processes. We also compare providers to find the right solutions for your business.

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What is electronic invoicing?

Electronic invoicing, or e-invoicing, is the digital exchange of invoices between a supplier and a customer. Instead of sending paper invoices, businesses use secure systems or software to send and receive them electronically.

E-invoicing reduces manual data entry, improves accuracy, and speeds up the payment cycle.

Common e-invoicing formats

Different systems use different formats to structure and transmit invoice data. The most common include:

• XML invoices - data is structured for easy processing by accounting systems
• PDF invoices - often sent by email, though less automated
• EDI (Electronic Data Interchange) - used for large supply chains and high transaction volumes

UK rules for electronic invoicing

In the UK, businesses are free to use e-invoicing as long as the following rules are met:

• The invoice must contain the same legally required details as a paper invoice (e.g. VAT number if registered, business details, description of goods or services, amounts, and dates).
• You must store invoices securely for at least 6 years.
• Customers must be able to accept e-invoices - always check their preferred format.

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Benefits of switching to e-invoicing

• Faster delivery and quicker payments
• Reduced admin and printing costs
• Fewer errors compared to manual entry
• Easier to track and match invoices with payments
• Environmentally friendly alternative to paper

Best practice for implementing e-invoicing

• Choose invoicing software that integrates with your accounts system
• Confirm customer preferences before sending invoices electronically
• Standardise invoice formats for consistency
• Train staff on how to generate and send e-invoices correctly
• Keep secure backups of all records

How Novuna Business Cash Flow can help

Even with e-invoicing, payment delays can still happen. Novuna helps businesses overcome these challenges with cash flow solutions such as invoice finance, working capital loans, and credit control services.

We work with you to bridge the gap between raising invoices and receiving payments, giving you financial stability and peace of mind.