Benefits of Electronic Invoicing in Accounting Records

In the modern era, digitizing processes and documents represents a strategic advantage. Implementing these technologies is crucial to harness their benefits across an organization’s activities, especially in accounting records. Below we explore the benefits of electronic invoicing for accounting records.

The Electronic Invoice is a legally valid digital tax document that backs commercial transactions between seller and buyer. It is electronically signed, which guarantees its authenticity, integrity and non-repudiation.

Panama’s Electronic Invoicing System (FEP), implemented by the General Revenue Directorate (DGI), offers a series of benefits for both companies and consumers. From an accounting standpoint, these are some of the benefits that can be obtained with this invoicing method:

Efficiency in System Records

There are multiple ERP systems that allow keeping a company’s accounting records, which can import/export transactions in Excel files and/or link to other systems or modules. Regardless of the electronic invoicing method used, whether free or through a Qualified Authorized Provider (PAC), several advantages can be obtained:

• Consult and record the invoices captured by the FEP, and download the Auxiliary Electronic Invoicing Receipt (CAFE).
• Capture the details of each CAFE in an Excel file via robotic automation processes and import them into the ERP system.
• Issue invoices as sales are recorded from the ERP, if it is linked to the electronic invoicer.

Digitized Documents

With electronic invoicing, accounting supporting documents can be saved in the cloud, on an electronic device, or as attachments to transactional records within an Enterprise Resource Planning (ERP) system. This eliminates spending on folders and/or warehouse rental for physical document storage that could be damaged or lost. It also reduces paper consumption, since invoices can be emailed to customers. Additionally, these documents can be consulted from any device with internet access and permission to the storage location, or from the FEP portal.

Efficiency in Validation and Reconciliation Processes

This invoicing method allows implementing greater validation and reconciliation controls. From scanning the invoice QR code to validate its authenticity, to downloading reports of documents issued and received from the FEP portal for reconciliations of accounts receivable, payable and inventories.