There isn’t a business in the world that hasn’t issued or received an invoice at some point. They're essential to global businesses and without property security they're also a risk point. In this blog, we discuss electronic invoicing fraud prevention, cost effectiveness and digital signatures.
These critical documents keep international commerce flowing but it’s also easy to forget that raising, processing, approving and archiving these documents generates costs to a business.
For medium to large businesses still reliant on paper, once paper production, handling and shipping have been added together, each invoice generated can exceed €1 per invoice.
Electronic invoicing reduces these costs immediately and makes invoice processing more efficient, suitable, secure and compliant.
Despite an electronic invoice’s advantages, as is the case with any digital document, no document is 100% safe. When insecure file formats are used, digital documents can be modified or copied to defraud an organisation.
Unprotected PDF, XML and other electronic documents provide a recipient with no way of determining if a document is genuine either, nor who the originator was, whether they are authorised to release it or whether the invoice has been modified since its creation.
Ascertia’s digital trust solutions and eSignatures enable organisations to overcome these challenges. With our high trust products, businesses can easily digital sign or timestamp documents to lock the data against unauthorised changes.
Another popular case of fraud is for a fraudster to send an invoice recipient a letter notifying them of a change of bank details, perhaps using headed paper. With a trusted digital signature, this is mathematically infeasible to take place.
Another influence on a company’s drive to strengthen how invoices are protected are regulatory requirements. Within Europe, the EU VAT Directive is focused on VAT fraud prevention by mitigating the risks of changed or fictitious documents. Compliance with eIDAS is also incredibly important.
In the EU VAT Directive’s case, the directive requires that:
“Invoices sent by electronic means shall be accepted by Member States provided that the authenticity of the origin and integrity of the contents are guaranteed.”
The Directive also requires that:
“The authenticity of the origin and integrity of the content of the invoices, as well as their readability, must be guaranteed throughout the storage period.”
This is important as documents must be kept for many years and being able to show they are unchanged and original is a key issue for any business. Digital signatures and eSignature technology can help achieve these objectives as can standardisation.
The most effective way of meeting these requirements is to use industry standard digital signatures. These bind the identity of the sender with the data content in a way that clearly shows if the document has changed.
Authenticity and integrity are also assured, and the time of approval is also bound into the document. The use of PDF/A format documents guarantees that anyone can display and print the document now and for many years to come.
Ultimately, digital signatures provide an effective way of mapping wet-ink paper signatures to the electronic world, ensuring fraud prevention.
The protection offered by the cryptographic processes is extremely robust and uses multiple international standards for widespread interoperability. Without this form of protection important business data is open to abuse, manipulation, fraud and theft.
Find out more about how Ascertia’s products protect invoices here.