How do you make sure your business complies with the latest European Union (EU) regulations, regardless of its size? The answer is simple: technology, autonomy and delegation. When combined, these three things can help even the smallest businesses hit the mark with regard to almost any law or regulation. A perfect example of this is finance, specifically, expenses and invoicing.
Although the UK is no longer part of the EU, it’s still pushing ahead with its “make tax digital” plan in line with other European countries. One of the core components of this shift is to make electronic invoicing (e-invoicing) standard practice. Now, before we continue, it’s important to note that the rules can differ from country to country. But the important point here is that e-invoicing is becoming mandatory for businesses and individuals.
That makes sense given that almost every aspect of our lives has been digitised in some way. It also makes tax reporting and monitoring easier to do. Driving the move towards e-invoicing in many European countries is something known as “invoice clearance”. This emerging standard is designed to make data on an invoice readable by a computer. In other words, businesses need to send invoices through a computer system so that they can be cleared for payment.
Electronic Invoicing to Make Tax Compliance Easier
This clearing process stores data from an invoice so that it can be used for tax reporting purposes. What’s more, it’s meant to happen before remittance is sent to the customer. The only way to do this efficiently is to create, send and process invoices in a digital format. Doing this means a business can put invoices through the clearing system and have them checked by an internal or external tax administrator before payments are made.
The mechanics of the system are somewhat complex and, for the most part, beyond the interests of most business owners. However, the reality is that e-invoicing is a real thing and, more importantly, something all businesses will need to implement. This is where technology, autonomy and delegation come into play. A large corporation has enough resources and members of staff to move with the times fairly effortlessly. However, what about small businesses that only have a few members of staff, a limited budget and a basic IT system?
That’s where technology comes in. Today, the process of managing invoices and receipts doesn’t have to be taxing. With a master invoice management system, it’s possible to raise, process and store e-invoices with very little effort. Members of staff can also track expenses by dragging and dropping receipts into the software. This, combined with the ability to manually input various pieces of data, means all invoices are not only digital but accurate and transparent. This makes the finance team’s job easier and, in turn, ensures the business meets the latest financial reporting standards in the UK and Europe. Not only this, but human error is far more unlikely with the precision and efficacy of software.
Technology Makes Autonomy and Delegation Possible in Business
With the right technology in place to manage invoices and receipts, automation and delegation become possible. Put simply, you can tell each employee or subcontractor to use the invoicing software. That makes them autonomous and, as a business owner, you’ve delegated a task. The end result is a system that doesn’t require a lot of costly resources. You’re taking what you’ve got, adding in some modern financial software and you’ve suddenly got the same ability to handle electronic invoices as a large corporation. That’s a testament to the power of modern technology.
Just as we’ve seen in other areas of life, deferring responsibility to smart software can be a smart move. In fact, it doesn’t just stop at invoicing. That’s a primary focus for businesses across Europe at the moment, but it’s not the only one. For example, any sized business can track the performance of email marketing campaigns, social media posts and search engine hits without spending a fortune. With a few pieces of software, such as Mailchimp and Google Analytics, anyone can monitor the impact of their online marketing.
Customer service issues can also be managed by modern software. Programs like Zendesk make it possible for even the smallest company to field questions and complaints from customers, without having a dedicated team of support agents working 24/7. Going further still, the ability to host meetings online through Zoom, Microsoft Teams and Skype is easier than ever. This means business owners don’t need dedicated meeting rooms. In fact, it’s possible to dispense with an office altogether and switch to remote working, if it’s deemed necessary and cost-effective.
Maximising Resources Through Technology is the Key to Success
All of these are examples of the ways technology can give workers more responsibility and bosses the ability to delegate tasks more effectively. The end result is a company that can function like a multinational without the same resources. Of course, it’s not exactly the same because large corporations can also make use of technology and combine it with a larger workforce to become even more efficient. However, that’s not the point.
The point here is that small businesses can function like large businesses with the right technology. One of the most important things a small business can do is maximise its resources and things such as digital invoicing systems make that possible. Is technology a guaranteed route to success? No. However, in a world where laws and regulations are constantly evolving, the right products make it easier to stay ahead of the curve. That’s certainly true when it comes to electronic invoicing.
Business owners might not want to make the switch, but it’s necessary. Therefore, the best way to comply with the new regulations is to invest. That could mean investing in new members of staff if budgets allow. Alternatively, it could mean using digital invoicing software to control and monitor payments, expenses and more. The second option is by far the most cost-effective and one that can be used by businesses of any size to stay ahead of the curve.