Legislation

What is an e-invoice?

In short: An e-invoice is an invoice in a structured data format, sent and processed electronically, reducing errors and saving time. In Latvia, it will be mandatory between businesses and the state starting in 2025, and between all businesses starting in 2028. The introduction of e-invoices ensures faster transactions, greater transparency, and error prevention when transcribing invoice data. It is important for companies to choose a solution that provides standard-compliant integration, security, and automation capabilities. An e-invoice, or electronic invoice, is a digital document prepared and sent in electronic format. It allows automatic processing by various resource management and accounting systems without manual data entry. It is not only a more convenient and faster solution for accountants but also a way to combat the shadow economy. Additionally, it reduces errors and promotes sustainability. The study "Digital Portrait of a Manager 2025" revealed that 18.4% of respondents have already implemented e-invoices in their company. Meanwhile, 20.1% expressed a desire to fully digitalize this section in the future. This is a relatively small percentage, which will soon have to transition rapidly to the e-invoice system due to legislative requirements. E-invoice legislation in Latvia The issuance, sending, and receiving of e-invoices will be mandatory for most Latvian companies, including individuals engaged in economic activities and other subjects of the Accounting Law and Value Added Tax Law. Starting January 1, 2025, e-invoices will be mandatory for transactions between businesses and public administration (including municipalities). From January 1, 2028, they will be mandatory for use between all companies registered in Latvia. The Accounting Law stipulates that an invoice must be formatted as a structured electronic invoice and comply with the Latvian national standard LVS EN 16931-1: 2017 "Electronic invoices. Part 1. Semantic data model of the core elements of an electronic invoice" and issued in accordance with the technical specification LVS CEN/TS 16931-2:2017 "Electronic invoices. Part 2: List of syntaxes complying with EN 16931-1". It sounds complicated, and this is reflected in the study "Digital Portrait of a Manager 2025," where the understanding of the e-invoice format is 53%. It is not a standard PDF, image, docx, or xlsx. An e-invoice is a structured data format, such as XML, containing all VAT and transaction data. Why implement e-invoices? E-invoices are not just about digitalization and time savings: they are a path to more transparent and secure invoice circulation. In the long term, both parties benefit - the state and businesses. Benefits for the state Reduced VAT gap and better tax discipline E-invoices help reduce various types of tax evasion as transaction data becomes structured and traceable. The possibility of hiding invoices, creating fictitious input tax deductions, duplicate transactions, and fraud chains decreases. Although this system is relatively new, countries that have implemented e-invoice systems report reduced VAT gaps and better compliance (EU Commission). Reduced administrative burden for state institutions Thanks to e-invoices, there is less work for state institutions as manual checks at every step are no longer necessary, document circulation is faster, and there is a unified data format for all suppliers, as well as a quicker payment process in the public sector. This enables the creation of more efficient public administration systems. More transparent economy E-invoice transaction data becomes analytically processable and comparable. Various programs can quickly and easily analyze them, uncovering potential risks, forecasting, and allowing better budget planning. Benefits for businesses Less manual work and fewer errors No more manual data transcription, which can introduce errors and consume time that could be better spent on other tasks. Improved cash flow and transparency For companies with high invoice circulation, it enables faster, more predictable, and less human-dependent processes. Electronically structured data allows companies to better control costs, automate approval processes, analyze spending categories, and ensure auditability. Less paper, less archiving, and lower costs With e-invoices, there is no need to buy archive shelves, no running around with folders between departments; they ensure quick access to documents in digital archives. Moreover, companies save on postage, printing, and manual data entry over time. How to implement e-invoices? Although reading the legal requirements might give the impression that it is a long and complicated process, it is relatively easy to accomplish. Choose an e-invoice solution based on the available integrations with the accounting software you use. In Latvia, e-invoice circulation occurs with the help of e-invoice operators, such as Unifiedpost, Telema, Finbite, Jumis Envoice. Also, e-address is considered an e-invoice operator as it is the channel through which e-invoices must be delivered to the public sector; Integrate the operator's platform with your accounting or ERP system; Develop internal guidelines: define deadlines, responsible persons, employees authorized to prepare and approve e-invoices; Start using e-invoices gradually - from a test group to full implementation. What to consider when choosing an e-invoice operator? The market offers a wide range of solutions for e-invoice processes. However, they are not all the same - each has its own features. Therefore, it is important that the chosen service provider meets all requirements. Compliance with Latvian and EU requirements - the operator supports the e-invoice standard, has incorporated all Latvian regulatory requirements, and regularly updates them; Integration with accounting systems - the operator offers ready-made integrations with popular systems (Jumis, Horizon, Moneo, Standard Books, etc.) or an alternative solution - API; Full functionality - the ability to send e-invoices (including to e-address), receive them, attach files (if necessary); Automation capabilities - the operator allows automating invoice import/export, validating data before sending, creating automatic processes, such as: "received e-invoice → automatically entered into the system → sent for approval"; Security and data protection - the operator complies with GDPR, data storage is secure, communication channels are encrypted, audits are conducted, and compliance certifications are available (e.g., ISO27001, etc.); Ease of use and support - intuitive platform, Latvian/English language support, technical support, video tutorials, etc.; Pricing model - what constitutes the total cost: implementation, subscription fee, transaction cost for sent/received invoices, additional costs for integration or other features; Additional features (optional) - electronic document archiving, transaction status tracking, mobile app, etc. Future trends of e-invoices in Latvia Latvia is at a stage where some are starting to automate and digitalize processes, while others are still waiting. Therefore, the real picture of e-invoice implementation will only be seen in 2027 - when the legal deadline is very close. This is also shown by the study "Digital Portrait of a Manager 2025" - only 12.1% find this topic relevant. At the same time, 39% believe that e-invoice implementation will impact their business, and 28% are unclear whether it will. While it may seem that 2028 is far away and there is plenty of time to implement e-invoices, preparing early will make the transition smoother and allow for even the smallest errors in the process to be addressed. It will also be easier for clients to accept changes gradually rather than abruptly on January 1. Implementing e-invoices is not just about sending invoices - it is an opportunity to automate the entire invoice circulation process (from order to payment, from supplier invoice to accounting records). It will also facilitate the introduction of AI in accounting processes, further reducing manual work and the possibility of errors. Don't wait until the last moment and connect to an e-invoice solution now - Jumis Envoice! Frequently Asked Questions What is an e-invoice? An e-invoice, or electronic invoice, is a structured format document prepared and sent electronically. It allows automatic processing of invoice data in accounting and resource management systems, reduces errors, saves time, and promotes transparent and sustainable invoice circulation. When will e-invoices be implemented? In Latvia, e-invoices will be mandatory between businesses and public administration starting January 1, 2025. From January 1, 2028, they will be mandatory between all companies registered in Latvia. How can a company choose a suitable e-invoice operator? When choosing an operator, it is important to ensure that it: Complies with Latvian and EU requirements (supports Pepoll UBL 2.1 BIS3 invoice standard); Offers integration with accounting or ERP systems; Provides full functionality for invoice sending, receiving, and processing; Offers automation capabilities and secure data protection; Is easy to use and provides support; Meets company needs - pricing model and additional features. How to implement an e-invoice solution? Implementing e-invoices involves several steps: Choose an e-invoice operator or solution; Integrate the operator's platform with your accounting or ERP system; Develop internal guidelines (responsible persons, deadlines, approval processes); Start using e-invoices gradually - from a test group to full implementation.