E-Invoicing Adoption in the U.S.: Key Drivers and Challenges

Businesses in the U.S. are adopting the standard framework for e-invoicing, which has various advantages. It is a secure platform emphasizing transparency and allowing transactions between firms regardless of the state and its e-invoicing regulations.

While electronic invoicing in the U.S. is not yet mandatory, many businesses adopt the system to gain efficiencies and keep up with their competition.

The electronic exchange system in the U.S. is a product of the coalition between the Business Payments Coalition (BPC) and the Federal Reserve. They aimed to establish an exchange network working similarly to PEPPOL.

They later launched the DBNAlliance, a non-profit organization that oversees the exchange framework. Despite its popularity, the exchange framework faces a few challenges, the most common of which is unwillingness from both trading partners.

In this post, we’ll discuss the benefits and challenges businesses in the U.S. can gain from adopting electronic invoicing. We’ll also look at the e-invoicing requirements and process and the potential impact of a U.S. federal government mandate on e-invoicing.

Overview of e-invoicing in the U.S.

Electronic invoicing is gradually becoming a pivotal element in business transactions across the United States. Though not yet mandatory, its adoption is driven by the need for efficiency, cost savings, and competitive advantage.

This digital transformation is supported by various frameworks and initiatives to streamline and standardize invoice processing nationwide.

The Business Payments Coalition (BPC) and the Federal Reserve have been leading the charge in promoting e-invoicing in the U.S. These entities have worked together to establish an exchange network inspired by the Pan-European Public Procurement Online (PEPPOL) framework.

This network ensures that businesses can securely and efficiently exchange invoices regardless of the state and its specific regulations.

Launching of the e-invoicing pilot project

In implementing the pilot project for e-invoicing in the U.S., the initiative was rolled out in three distinct waves, from 1 April 2022 to 31 December 2022. This ensured gradual integration and testing across different sectors.

This phased approach progressively allowed businesses and technology providers to adapt to the new electronic invoicing framework.

Each wave focused on expanding the network of participants and refining technical interoperability to ensure the smooth transmission of invoices between diverse systems and stakeholders.

The establishment of the DBNAlliance, a non-profit organization overseeing this exchange framework, further emphasizes the commitment to creating a robust and interoperable e-invoicing system.

The e-invoicing system in the U.S. operates on a four-corner model, similar to the PEPPOL framework. This model involves the buyer, the supplier, and their access point service providers.

Access point providers are crucial in ensuring the interoperability of different e-invoicing systems, enabling businesses to send and receive invoices seamlessly.

To participate in the e-invoicing system, businesses must adhere to specific requirements set by the DBNAlliance. These include the format and a standardized schema for transmitting electronic documents to ensure consistency and accuracy in invoice data.

Additionally, invoices must include essential information such as invoice date, business and customer details, unique invoice number, payment terms, and a description of goods or services provided.

What are the e-invoicing requirements in the U.S.?

According to the DBNAlliance, which oversees the legal framework of the electronic invoicing platform, electronic invoices must adhere to various rules and regulations.

Let us look at the e-invoicing requirements in the U.S. that ensure compliance:


Electronic invoices issued in the U.S. must use the XML-based Universal Business Language (UBL), a standardized schema popular for transmitting electronic documents worldwide.

Instead of the traditional PDF format, the UBL provides a more consistent way for business owners to transmit electronic invoices. It also varies greatly in format and structure.

Information required

While the UBL format may vary greatly, the DBNAlliance has indicated the information that must be included in an electronic invoice. This includes:

  • Invoice date
  • Business name and address
  • Customer’s business name and address
  • Unique invoice number
  • Payment due and the terms, including payment method
  • Description of the services provided or goods sold
  • Amount and price of each good
  • Additional charges, such as insurance and shipping

You should also include sales tax where applicable. However, sales tax differs from state to state, making it essential to check with your local tax authorities before issuing an e-invoice.

When including the type of payment you accept, such as a wire transfer, you must add your SWIFT code, account number, bank address, and bank codes.

You must include the country of origin or the merchandise port of entry if you export goods.

Digital signature and authentication

A digital signature helps authenticate an electronic document, ensuring security during transmission. It also makes it challenging for fraudsters to alter your electronic invoice without detection.


The minimum period for retaining an electronic invoice after issuance is 7 years. This applies to both buyers and suppliers.

Read more: Understanding US Invoice Requirements: A Comprehensive Guide.

What is the e-invoicing process in the U.S.?

The operational framework established to enable electronic invoicing in the U.S. uses a four-corner model like PEPPOL. It comprises the buyer, their access point provider, the supplier, and their access point provider.

Here are the steps involved in the electronic invoicing process in the U.S.:

1. Find an access point (AP) provider

Business owners must have a reliable access point provider like Storecove to issue and receive invoices through the exchange framework.

Storecove enables the interoperability of different e-invoicing systems throughout the country. It was the first access point service provider to receive the first e-invoice transmitted through the pilot exchange framework.

Every buyer and supplier must have an access point service provider to ensure invoices are compliant and accessible by their current systems.

2. Register and connect to the provider’s network

Once you choose your access point service provider, register on their network and provide your business details. The information you must give typically includes your company's name, address, and contact details.

After registration, connect your billing or accounting system to the access point provider. You can issue and receive compliant invoices with any other business using the exchange framework.

3. Supplier generates an invoice and sends it to their AP provider

The first step to issuing an electronic invoice is to create the electronic document using your billing or accounting software. The sender then issues the invoice to their access point service provider.

4. The sender's AP provider sends it to the buyer’s AP provider

The sender’s access point provider ensures the invoice adheres to the set regulations, including format, unique number, and digital signature. They then transmit a compliant electronic invoice to the buyer’s access point provider.

5. The buyer AP provider issues the invoice to the recipient

The buyer is responsible for ensuring the recipient’s system can read the invoices sent. They also verify its compliance and issue it to the buyer, who checks it before making payment.

What are the key drivers of e-invoicing adoption in the U.S.?

Most businesses in the U.S. are adopting electronic invoicing since it offers numerous advantages. Initially, it was challenging for the country to have a common framework that all companies could use to send and receive invoices.

Let us discuss the common drivers that have led to an increase in e-invoicing adoption in the U.S.:


There are more than 250 electronic invoicing software providers in the U.S. using a minimum of 15 formats. It is daunting to get businesses to use different and common e-invoicing solutions.

The lack of a standard system has made it challenging for the government to implement mandatory electronic invoicing. However, with the exchange framework overseen by the DBNAlliance, businesses can issue and receive invoices through a common system.

The exchange framework is a four-cornel model that comprises access point service providers to ensure compliance. They help businesses send and receive invoices regardless of the software they use.

Access point providers have enhanced interoperability between systems by bridging the technological barrier.

Regulatory support and encouragement

The U.S. government and regulatory bodies, such as the Business Payments Coalition (BPC) and the Federal Reserve, have been actively promoting the adoption of e-invoicing.

They have established initiatives and frameworks that facilitate streamlined business transactions. This regulatory support gives businesses a sense of security and assurance that e-invoicing is a reliable, standardized, and future-proof solution.

Such endorsement from authoritative bodies motivates businesses to adopt e-invoicing, knowing that it aligns with broader governmental goals and regulations.

Competitive pressure

Maintaining competitiveness is crucial in the modern business environment. Companies that adopt e-invoicing early often experience significant efficiencies and cost savings, positioning themselves as industry leaders.

This creates competitive pressure on other businesses to follow suit. Companies that lag in adopting e-invoicing risk falling behind their competitors in terms of operational efficiency, customer satisfaction, and cost management.

As a result, many businesses adopt e-invoicing not only to gain these benefits but also to avoid the risk of being outperformed by their peers.

See more: The Future of E-Invoicing in the U.S.: Trends and Regulations Shaping the Landscape

What are the challenges to e-invoicing adoption in the U.S.?

The U.S. government validates and certifies several access point service providers to make e-invoicing adoption more manageable for businesses. However, a few challenges still hinder e-invoicing adoption in the U.S.. These include:

Concerns about data privacy and security

Invoice data is sensitive, making it a security and privacy issue for many business owners. The involvement of multiple stakeholders and systems exacerbates the challenge due to the increased risk of cyber threats.

Data protection laws, including the EU's General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) in the United States, and other similar regulations add further complexity to security concerns.

Complexities of the U.S. tax systems

The U.S. has no defined rules for tax invoices and an input tax credit mechanism. This complexity has led to divergence in electronic invoicing formats, data subsets, and syntaxes.

According to a study by the BPC, there are more than 250 electronic invoicing service providers in the U.S. using at least 15 formats and over 40 subsets. This makes the e-invoicing environment highly intricate.

Resistance to change

Organizations will likely face resistance from internal or external stakeholders who are reluctant to adopt e-invoicing due to misinformation or the lack of trust, awareness, and skills.

For example, some employees may be used to traditional processes and workflows and may feel they are at risk of losing their jobs. A lack of cooperation from all businesses may make e-invoicing adoption in the U.S. more challenging.

Organizations must communicate the benefits of e-invoicing to their stakeholders to overcome the resistance. They should also provide adequate training and support to employees to facilitate the transition.

Integrating e-invoicing systems with existing ERPs

Businesses that rely on traditional invoicing must introduce or integrate new e-invoicing solutions with their existing systems. The transition from traditional invoicing formats, such as PDF, to structured data that ensures compliance can be challenging.

A business may have to make significant changes or completely overhaul ERPs. Onboarding employees to use the new solution can be time-consuming and costly, and most business owners must hire trainers.

However, most ERP vendors are finding ways to ensure their clients get reliable e-invoicing solutions promptly. They partner with e-invoicing solutions provider and connect to their network for quick and efficient integration.

You may also like: Why ERP Providers Should Integrate with DBNAlliance: Strategic Advantages in the U.S. Market

What is the potential impact of the U.S. federal government mandate on e-invoicing?

A federal mandate on e-invoicing in the U.S. could bring about significant changes across industries. Let us discuss some of the potential impacts of the U.S. federal government mandate on electronic invoicing:

Standardization across industries

A federal mandate on e-invoicing would lead to adopting a standardized approach across various industries. Currently, multiple formats and service providers create complexity and inefficiencies.

Standardization would simplify these interactions by ensuring all businesses follow the same procedures and formats, reducing the learning curve and integration challenges.

This would facilitate smoother transactions and communication between businesses, regardless of size or industry, leading to a more cohesive and efficient market.

Boost to digital transformation

A federal mandate would serve as a catalyst for digital transformation, particularly among small and medium-sized enterprises (SMEs). SMEs often lag in adopting new technologies due to resource constraints and risk aversion.

However, a mandate would push these businesses to invest in digital solutions, including e-invoicing platforms and related technologies. This investment would improve operational efficiency, data management, and competitiveness.

The push towards digital transformation would foster innovation as businesses seek to integrate e-invoicing with other digital tools and processes.

Economic stimulus

Implementing a federal mandate on e-invoicing could stimulate economic growth by creating new job opportunities and fostering the development of new business models.

The increased demand for IT support, software development, and system integration services would create jobs and spur innovation in the tech sector. Businesses specializing in e-invoicing solutions and related services would also see growth, contributing to economic diversification.

The overall increase in business efficiency and cost savings would also free up resources for further investment and expansion, benefiting the broader economy.

Global competitiveness

Adopting a federal mandate on e-invoicing would align the U.S. with other countries that have already implemented similar regulations. This alignment would enhance the global competitiveness of U.S. businesses by ensuring they meet the invoicing standards required by international partners.

Standardized e-invoicing practices would facilitate smoother cross-border transactions, reduce administrative burdens, and improve relationships with foreign clients and suppliers.

This global integration would open up new markets for U.S. businesses and ensure their continued competitiveness in the increasingly interconnected global economy.

Environmental benefits

Traditional invoicing methods involve using large amounts of paper for invoices, envelopes, and postage. By transitioning to electronic invoices, businesses can significantly reduce their reliance on paper, reducing deforestation and the energy consumption associated with paper production and distribution.

Reducing physical mail also decreases postal service carbon emissions. This shift towards digital invoicing aligns with broader environmental goals, promoting sustainability and contributing to the fight against climate change.

Companies joining the e-invoicing market practice are eco-friendly, which enhances their public image, appeals to environmentally conscious consumers, and meets corporate social responsibility targets.

These environmental benefits help conserve natural resources and position businesses as leaders in sustainability.

Increased compliance and transparency

Mandating e-invoicing would enforce stricter compliance with tax regulations and business laws. Electronic invoices provide a transparent and easily auditable transaction trail, significantly reducing tax evasion and fraud opportunities.

This transparency benefits the government by ensuring proper tax collection and legal compliance, and businesses benefit by fostering an environment of fair competition and ethical practices.

The enhanced traceability and accountability of transactions would also help businesses manage their finances more effectively and reduce the risk of disputes.

You may also like: The Role of ERP Integration Services in Achieving E-Invoicing Compliance in the U.S.

What are the benefits of e-invoicing for businesses in the U.S.?

The adoption of e-invoicing in the U.S. is gaining pace due to the numerous benefits it offers businesses. Here are some of the most significant advantages:

Enhances cost efficiency

The cost of paper, envelopes, printing, and postage is incredibly high compared to documents in a digital format. Electronic invoicing automates the process and eliminates paper invoices, allowing businesses to realize significant cost savings.

Transitioning from traditional to electronic invoicing processes involves significant costs for acquiring e-invoicing solutions. However, these costs are typically offset by the long-term savings of eliminating paper trails through automated processes.

The U.S. government has made the transition easier by allowing businesses to use access point providers who enable the sharing of electronic documents regardless of an organization’s technology.

Improves traceability and security

While many business owners raise concerns regarding the security of their financial data, the U.S. government has taken adequate measures to ensure documents are transmitted through a secure network.

The exchange framework has a robust infrastructure using AS2/AS4 channels. These channels require users to encrypt their documents and use a digital signature for security and authenticity, helping reduce the risk of unauthorized access and fraudulent activities.

The AS2/AS4 channels are prominent file transfer protocols that allow secure data exchange between buyers and suppliers. The AS$ is more modernized, but the U.S. government allows businesses with older systems to issue and receive e-invoices using the AS2 channel.

Suppliers and buyers can issue and receive electronic documents with peace of mind and confidence in the framework. Users must be verified to ensure a trustworthy invoicing process.

Increases business efficiency

The U.S. exchange framework significantly enhances invoicing, allowing businesses to streamline billing operations. Automating the previously time-consuming tasks of invoice generation is a transformative opportunity for improving business operations.

Tasks such as invoice creation, delivery, and payment are revolutionized to accelerate workflow and financial processes. The UBL format has the necessary fields; employees don’t have to spend hours entering duplicate data in the systems.

With a reliable e-invoicing solution and access point service provider, data is seamlessly exchanged between the billing systems of the transacting parties.

Counters payment delays to increase cash flow

The payment period after a purchase typically begins with the receipt of the invoice. Most traditional invoicing methods are lengthy, making it harder for businesses to receive payment promptly.

Electronic invoicing allows business owners to send invoices immediately, enhancing the payment process and shortening the payment cycles.

The sooner a business receives money, the sooner it can invest the funds elsewhere to benefit the company and its employees.

Enhances regulatory compliance

E-invoicing solutions enhance regulatory compliance by providing businesses in the U.S. with standardized frameworks and formats, such as the XML-based Universal Business Language (UBL).

These frameworks ensure that electronic invoices contain all necessary information mandated by regulatory authorities, including invoice dates, business details, unique identifiers, payment terms, and tax information, where applicable.

By adopting e-invoicing solutions, businesses reduce the risk of errors and omissions that could lead to non-compliance.

This automation simplifies invoicing and ensures that all regulatory requirements are consistently met across business-to-business (B2B) financial transactions.

Reduces manual errors

Manual data entry can easily lead to errors that can cause disputes between organizations. People are prone to making mistakes that may be detrimental to an organization since they involve the company’s finances.

There may also be errors when issuing invoices, such as sending them to the wrong email or address. Recipients may also claim they did not receive an invoice if it doesn’t reach them or gets lost in the mail. The exchange framework in the U.S. eliminates such errors by improving accuracy.

Read more: Connecting to the U.S. Open Exchange Network (DBNAlliance): Benefits for ERP Systems.

Takeaway: E-invoicing can transform business practices in the U.S.

E-invoicing is transforming U.S. business operations by addressing challenges like interoperability and security while unlocking benefits such as cost savings and efficiency.

Despite hurdles like data privacy concerns and integration complexities, more businesses are adopting e-invoicing to streamline processes and gain competitive advantages.

The standardized practices overseen by the DBNAlliance help companies navigate these challenges, improve financial management, and build stronger partnerships.

Storecove can help you join the hundreds of companies adopting e-invoicing in the U.S. and keep up with the competition. We help ensure compliance and seamless exchange of invoice data. Contact us today to get started!

More information about E-Invoicing in the USA?

Contact us for more information or schedule a consult with one of our e-invoicing experts.

Read also:


Subscribe to our Newsletter

* indicates required