Shownotes
E-invoicing is not just a digital nicety, it is becoming central to how modern businesses keep cash flowing and stay compliant. In this episode of I Hate Numbers, we explain what e-invoicing means, why larger customers and public sector buyers increasingly expect it, and how adopting it can reduce errors, speed up payments, and simplify bookkeeping.
Why E-Invoicing Matters
E-invoices remove manual rekeying, eliminate lost PDFs, and cut the back and forth that delays payment. They improve accuracy and create a clear, auditable trail that makes life easier at tax time. For businesses supplying VAT-registered customers, being able to send structured data rather than free-form PDFs means customers can process invoices automatically, improving your chance of being paid faster.
Practical Benefits
We cover the practical benefits: faster approvals from customers, fewer disputes about amounts or dates, smoother integration with cloud accounting systems, and a stronger position when bidding for larger contracts. E-invoicing also reduces duplicate payments and speeds up reconciliations, which helps your cash flow and frees your team from low-value admin tasks.
Standards and Compliance
There are different e-invoicing standards around the world, and larger buyers are increasingly requiring structured invoices. Check the requirements of your major customers and public sector buyers before you select a provider. Understanding the required data fields and VAT treatments will prevent problems later.
How to Get Started
Start by choosing a provider or using the e-invoicing options inside your cloud accounting package. Map the invoice data fields, run tests, and communicate the change to customers. We recommend a short pilot, perhaps with a handful of customers, to iron out any issues before rolling out the change company-wide. Make sure staff are trained and that you keep backups of your invoices and settings.
Common Pitfalls to Avoid
Partial adoption can cause confusion, so decide early how you will handle customers who cannot accept structured invoices. Ensure your internal processes match the structured data fields, and confirm how your software handles varying currencies, VAT rates, and line-item details. Always test end-to-end before switching fully to avoid missed payments and data mismatches.
Final Thoughts
E-invoicing is a practical win for any business that wants to reduce admin, speed up payments, and improve auditability. If you are still sending manual invoices, now is the time to plan the move. Small steps, a short pilot and clear communication with customers will make the switch painless and worthwhile.
Episode Timecodes
[00:00:00] – Introduction
[00:01:10] – What e-invoicing is and why it matters
[00:03:05] – Benefits: accuracy, speed, and cashflow
[00:05:00] – Standards and compliance considerations
[00:06:40] – How to get started, step by step
[00:08:20] – Common pitfalls to avoid
[00:09:30] – Final thoughts and next steps
Host & Show Info
Host Name: Mahmood Reza
About the Host: We are the team behind I Hate Numbers. As accountants and business coaches, we help organisations simplify finance, improve cash flow, and adopt efficient systems.
Podcast Website:https://www.ihatenumbers.co.uk/i-hate-numbers-podcast/🎧 Listen & Subscribe
Find more episodes on Apple Podcasts, and subscribe for weekly insights that help you plan, act, and profit.
Additional Links
Transcripts
Today I'm going to be talking about e-invoicing, specifically what it is, why it's coming, and why you, yes you, should care. Think of this as part of the ongoing UK's digital tax makeover. And it's not a science fiction story, it's not optional, well certainly, it's not going to be optional for too much longer.
::Let's crack on.
::Welcome to I Hate Numbers, the podcast that's there to help you get comfortable with your best friend in business, your numbers, make money, save time, and build your confidence. What's not to love about that? Now, firstly, what actually is e-invoicing? Now, e-invoicing means sending and receiving invoices in a structured digital format, not just a PDF emailed across, but a system-to-system conversation.
::This is where your accounting software will talk directly to your customer software. There's no printing involved, no scanning, no typing in numbers twice. Now, on the upside, it’s quick, it's efficient, and it's tidy. In essence, it’s the next phase of Making Tax Digital. Now, why is the government so concerned? Why does the government care? And I use that word very loosely. Now, it's not just the UK government, by the way, this is part of a wider OECD initiative that has been in the making for quite a number of years. Now,
::HMRC likes e-invoicing because for them it cuts out the errors, gives them a clearer review of who owes what, and as part of the drive to close tax gap, catch mistakes faster and get real-time data. Now, for you as a business owner, that on the plus side means less paperwork, faster payments, and if it's done correctly, fewer late nights rested with spreadsheets.
::Obviously, that gives more information to our wonderful friends at HMRC. Now, let's think of an example. Say you run a consulting firm, you have about half a dozen clients all on retainers Now, right now, your bookkeeping person will be spending time creating invoices, maybe on Word, PDF or some other application, attaching the PDFs, chasing the payments, and with the invoicing, your system will send those invoices automatically. Irrespective of what the government's initiative is,
::it's a good way to invoice, get paid on time, get paid more promptly, and it feeds straight into the client's accounting system. They appear instantly, ready to approve and pay. Now, in theory, fewer mistakes, better cash flow, and less administration and repetition. If you're a builder, if you're a trades person, if you've got multiple projects going on, variety of suppliers, subbies, you're buying materials, billing clients, sorting out bits of paperwork, manual entry can be quite a nightmare and probably not the first thing on your list.
::Now switching to e-invoicing and every job invoices are created digitally matched against materials automatically locked into your accounts. No more lost invoices in that eternal tardis, the van glove box. Now, when is this actually happening? Now, HMRC plans to roll out e-invoicing in stages, very much like Making Tax Digital for Income Tax.
::Just as a heads up, and please do check out previous episodes on this, self-employed individuals and landlords earning over 50,000 pounds in the 24/25 tax year will have to (it's not an option) go digital by April, 2026. That's going to be phased in to 30, then 25,000 over the next two years. As a heads up reminder, that's essentially,
::you're going to have to submit four quarterly returns during the course of the year, and it has nothing to do directly with VAT. Now, e-invoicing is going to start off as a voluntary exercise, but we all know how that's going to work out. It's eventually going to become a mandatory exercise within a few years.
::Now, as much as your thought process might be about going digital, HMRC, having access to that data, is on the horizon and it's mandated. So currently, there's no signs that it's not going to go ahead. So be smart, get ahead now. How will it work on a day-to-day basis? Now, most businesses may already be using Xero.
::You are halfway there. Your accounting software can generate those e-invoices and they go straight into the customer's system. No extra typing or uploading. Each invoice gets a unique ID or digital stamp. And when the customer pays, the system updates automatically. Now, what's the upsides? Well, faster payments, fewer data entry errors, easier VAT reporting,
::lower risk of fraud because each invoice is verified digitally. Now, if you are a user of Xero, which is one of my favourite platforms, we are a platinum partner in that by the way, then that ability to go straight into somebody's accounting system can already happen. Now, there are downsides. You'll need the right software.
::There's always like all these things, a learning curve. And realistically, some people understandably, will grumble about HMRC seeing more and more data. Those same concerns were said about online banking, Making Tax Digital for VAT and now that all feels part of the landscape - quite normal and natural.
::Once MTD for Income Tax is introduced and the rollout is in April, 2026, so there's a little hint there, by the way, get yourself geared up for that. Now, how should you prepare? Well, firstly, don't wait until HMRC tells you to move. Mind, right? Do it sooner rather than later. Review your invoicing process.
::Check if your accounting software, supports e-invoicing formats. Most of them will do so. Make sure you've got the grade of subscription that allows you to do that. Train your team on digital invoicing. Keep an eye on any pilot schemes. Early adopters often get smoother onboarding and get those teething problems out the way.
::If you're already on cloud accounting, you're in a strong position, and if you're not, I will strongly urge you irrespective of government initiatives to do so. Now, final thoughts: e-invoicing is more than just another rule. It's going to be a game changer for cash flow, efficiency and accuracy whatever your business is -
::whether it's a marketing agency, a consulting firm, building houses, the message is the same. Start the preparation now. You're going to save yourself time, hassle, and money later on down the track. If you need any support and help with that, by all means, reach out to us. Book a call. We'd be more than happy to help.
::Now, if you found this episode useful, which I hope you have, subscribe, download and cough, cough, buy my book, I Hate Numbers, your guide to mastering the money side of business. Until next time, folks, plan it, do it, and profit.