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Aug 18


Electronic Invoicing and Dynamics CRM


Electronic Invoicing and Dynamics CRM

How and why to do electronic invoicing using Microsoft Dynamics 365

Electronic invoicing (e-invoicing, e-billing etc) - a method used by suppliers to pass invoices directly to their customers in a format which allows for automatic processing - is an idea that’s being promoted across Europe and other parts of the world.

Because of the time and effort currently involved in processing invoices - from receipt to payment - e-invoicing could cut costs, improve efficiency and boost cash flow.

There is a good business case and it’s clear that e-invoicing is the future - it may not be long before it is a requirement made by buyers in organisations of all sizes over here, so you’d better get ready.

There are several steps involved in electronic invoicing:

  1. Efficient creation of the invoice
  2. Delivery of the invoice to the recipient
  3. Identity check by the recipient
  4. Machine readability by the recipient
  5. Processing by the recipient

Although some organisations including the EU, have tried to make one, so far there is no universally accepted standard for making e-Invoices machine readable, which means to date electronic invoicing has only so far been taken up by very large companies and some EU bodies.

So in practice, as a first step towards full e-invoicing, companies of all sizes are creating invoices as pdfs and sending them out by email. This saves printing and postage costs and goes some way towards making the process quicker and more efficient for the supplier - the benefits to companies of faster invoicing and reduced printing costs are estimated at over €64 billion per year across Europe.

However there are still issues of identity fraud and malware with sending pdfs, mainly problems for the recipient, which need to be overcome for successful sending.

Issues with PDF Invoices that must be resolved

The first critical issue with sending a PDF invoice by email is that it is subject to spoofing and fraud: the receiver can open an attachment that looks like an invoice from an existing supplier only to find, for example, that the bank account details have been changed so that monies could be transferred to a fraudulent organisation.

A second issue with PDF invoices sent by email, is that they still feed into an accounting system for ultimate payment, so you need to make sure that the pdf invoice you send fulfils all necessary legal and supplier requirements - to ensure that there are no undue holdups or disputes that could delay payment.

Looking at the second issue first...

How to do PDF Invoicing in Microsoft Dynamics CRM
If you’re considering customising Microsoft CRM so that it can send electronic or pdf invoices, to avoid delays with payment or issues with VAT, you must first ensure that the invoice contains the same information as paper invoices.

There’s a VAT Notice from HMRC with further guidance explaining what this means.

To summarise that here, an electronic invoice created in Microsoft CRM must adhere to these principles:

  • Invoices should have a sequential invoice number and contain a tax point date which is the usually date of supply (or the payment date if earlier). The invoice date could be later and represents the date the document was dispatched.
  • The name, address, and VAT number of the Supplier must be shown (prefixed by GB for international invoices).
  • The Customer name and address must also be shown
  • Business to Business invoices in the EU must also show the VAT number of the Customer if UK VAT is to be avoided. There are special rules for VAT for digital distribution of goods.
  • There must be an adequate description for supply of goods (or a product number) to identify what has actually been supplied and the unit price indicated for each item (excluding VAT).
  • The VAT rate and the discount amount should also be shown if applicable.
  • The total VAT should be indicated on the invoice, and repeated in sterling if it is a foreign currency invoice.
  • Copies of the original invoice must be kept for six years (10 years in Germany).
  • Credit notes need to contain the same information as the original invoice.

And to overcome the fraud issue...

How to Overcome Fraud in PDF Invoicing

To avoid invoice spoofing and fraud, the EU recommends that documents are electronically signed - the only practical way to do this is to digitally sign the PDF copy of the invoice or the email.

The recipient can then click on the signature and verify that that the email or pdf has come from you, their supplier.

An alternative solution is to provide a web portal or print a QR code onto the Invoice which opens the invoice on your website with an authenticated logon so the customer can be sure they are viewing a valid document.

Both of these solutions to the issues of fraud, and getting the right invoice structure, require some customisation of Microsoft CRM, fortunately Redware’s new billing software is able to do both.

Our billing software: - generates hundreds or thousands of invoices using workflow - fulfils invoices by creating and digitally signing pdfs - has an option to email securely using a digital signature - has an option for custom development of invoices

Please get in touch if you’d like to find out more information.

If you’re considering customising Microsoft Dynamics CRM to enable electronic invoicing, please get in touch with us at Redware. With over 10 years experience of billing in Microsoft Dynamics CRM, we have a suite of billing solutions available and we’d be happy to advise or consult on your project.

For a broader view of the issues, read our White Paper - Billing and Microsoft CRM: A Guide to using CRM to automate monthly invoicing. Please get in touch if you’d like a copy.

You can email us at or give us a call on 0845 3010 444.

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