E-Invoicing and e-Procurement in Canada

The e-invoicing and e-procurement platform Digital Business Networks Alliance (DBNAlliance) was introduced by the Business Payments Coalition in 2023. It allows businesses to easily send and receive invoices electronically and track orders and payments.

DBNAlliance was launched to help develop a common network for North America (Canada and the USA). It currently focuses on members of the energy, life science, and supply chain industries.

DBNAlliance is a cloud-based platform that allows invoicing and procurement between businesses, transforming the traditional way of doing business.

It has a four-corner model-based exchange framework, making it easier than ever for North American companies to conduct transactions. Whether you're looking to submit an invoice or find a supplier, DBNAlliance has you covered!

Keep reading to learn more about the e-invoicing regulations in Canada, who they target, and how you can transmit compliant electronic invoices.

Who governs e-invoicing and e-procurement in Canada?

The CRA (Canadian Revenue Agency) refers to e-invoicing and e-procurement as "e-services." It is responsible for administering and enforcing Canada's tax laws.

The Canadian government has also set up a task force to study the feasibility of e-invoicing and how they can implement it across all levels of government.

This task force is called the E-Invoicing Advisory Group. It is made up of representatives from the public and private sectors.

E-invoicing rules and regulations in Canada

E-invoicing is not yet mandatory in Canada, but the Canadian government has been working towards this goal. Following a mandate by the Minister of Public Works and Government Services Canada in 2018, all federal suppliers had to be able to accept e-invoices by the end of that year.

While e-invoicing is not compulsory yet, the Canadian government strongly encourages businesses to start using e-invoices. In fact, the government has set up a task force to study the feasibility of e-invoicing and how they can implement it across all levels of government.

Businesses must stick to the following rules and regulations to send and receive invoices in Canada:

Storage

Every business that uses e-invoicing must have a system to store invoices. The storage process should guarantee the invoices' confidentiality, integrity, and availability. It should also be easy to retrieve the invoices when needed.

Archiving

Invoices must be archived for a minimum of six years. You can do this electronically to help ensure your invoices are easy to find and access when needed.

Format

According to the Canadian government, all e-invoices should be in the Universal Business Language format. The UBL format is an international standard that ensures compatibility between different software systems.

The format also allows businesses to add extra information to their invoices, such as terms and conditions.

Billing information

Businesses must include all relevant information on their invoices, such as the date and invoice number. The document should also contain a clear description of the goods or services. In addition, businesses must include their contact information and the contact information of the customer.

Taxes

All e-invoices must include the applicable taxes. This includes:

PST(Provincial Sales Tax): This refers to the tax on the sale of goods and services in the province of Saskatchewan. It generally involves a tax on the final consumption of goods and services.
GST(Goods and Services Tax)- GST is tax on the sale of goods and services in Canada. The GST is a value-added tax that is levied on the final consumption of goods and services.

Who must comply with e-invoicing regulations in Canada?

E-invoicing in Canada is not yet mandatory, but the Canadian government has been working towards this goal. As of 2018, the government mandated that all federal suppliers must be able to accept e-invoices.

In the future, e-invoicing may become mandatory for all businesses in Canada. Currently, only companies that sell to the government must comply with e-invoicing regulations. The recent introduction of the DBNAlliance is aimed to help streamline B2B business transactions in North America. This exchange option does not involve any authorities and will not be mandated.

Benefits of e-invoicing for businesses in Canada

E-invoicing for businesses in Canada can bring several benefits, such as:

Easy access to digital documents

It is easy to access and manage digital documents when using technology and software. You can also store them electronically, which frees up physical space in your office. Most importantly, you can easily retrieve the documents when needed.

Faster payments

E-invoices enable businesses to get paid faster since they can send invoices electronically, and customers can pay them online. In addition, businesses can set up automatic payments so that they are paid as soon as the invoice is received.

Improved cash flow

E-invoicing can help businesses improve their cash flow by reducing the time to get paid. Businesses can send invoices electronically, and customers can pay them online. This can help businesses avoid late payments and interest charges.

Digital signatures to ensure document authenticity

Digital signatures help to ensure that a document is authentic. They use a unique digital ID that the recipient can verify. In addition, digital signatures can help ensure that a document has not been tampered with.

Improved customer service

E-invoicing can help businesses improve their customer service. Businesses can send invoices electronically, and customers can pay them online. In addition, companies can set up automatic payments so that they are paid as soon as the invoice is received.

Reduced risk of forgery and fraud

E-invoices are more secure than paper invoices. This is because they can be encrypted and password-protected. In addition, businesses can add security features, such as digital signatures, to their invoices.

Fast, error-free tax filling

When businesses use e-invoicing, they can automatically generate tax reports. This allows them to save time and avoid errors when filing their taxes.

Reduction of compliance costs

E-invoicing can help businesses reduce their compliance costs. This is because businesses can automatically generate tax reports. In addition, companies can set up automatic payments so that they are paid as soon as the invoice is received.

Encryption of data to help maintain a document’s readability

When an organization uses encryption, it can help maintain the readability of a document. This is because the data in the document is converted into a code that only someone with the key can read to decrypt.

How to send and receive compliant e-invoices in Canada

Canada has not yet adopted a standard for e-invoicing. However, the Canadian government is working towards creating one. In the meantime, businesses can use the DBNAlliance platform to send and receive e-invoices.

The Digital Business Networks Alliance (DBNAlliance) is an initiative that enables businesses to send and receive e-invoices. Businesses are already using DBNAlliance in Canada in the following steps:

1. Creating an invoice using business software

The business creates an e-invoice using its accounting software. When creating an invoice, businesses will need to include specific information, such as:

The name and address of the business
The name and address of the customer
Detailed description of the goods or services sold
The invoice date
The due date
The invoice number
The quantity of the products or services sold.

2. Using an Access Point

The business then sends the invoice to the customer through an Access Point. A DBNAlliance Access Point is an online platform that helps businesses send and receive compliant e-invoices.

Businesses will need to register for a DBNAlliance Access Point by creating an account with a DBNAlliance service provider.

Storecove is a DBNAlliance Access Point provider that businesses can use to send and receive e-invoices. It is a cloud-based platform that companies can use to manage their invoices. Storecove helps companies by ensuring the accuracy and compliance of e-invoices.

3. Sending the invoice

The business then sends the invoice to the customer through the DBNAlliance Access Point. The customer gets an email notification that they have received an invoice.

4. Receiving the invoice in the customer’s Access Point

The customer will receive the invoice through their DBNAlliance Access Point. They can then view the invoice and make a payment.

5. Making a payment

The customer can proceed to make a payment. The funds are reflected in the company’s account after the payment is processed. The DBNAlliance platform allows any payment method.

The project originated from large businesses and payment providers looking to increase efficiency. This is why the majority of electronic payments are available on the platform.

6. Receipt of payment

The business will then receive notification that payment has been processed and the funds have been transferred to their account. This will complete the e-invoicing process.

How Canada ensures e-invoicing compliance

Canada does not yet have a standard to ensure e-invoicing compliance. In 2018, the Canadian government released a consultation paper on e-invoicing, which proposed the following measures to ensure compliance with e-invoicing:

Establishing a legal framework

The Canadian government is working on establishing a legal framework for e-invoicing. This legal framework will set out the rules and regulations for e-invoicing in Canada.

Developing standards

The Canadian government is working on developing standards for e-invoicing. These standards will ensure that e-invoices are compliant with Canadian law.

Creating an accreditation system

The Canadian government is working on creating an accreditation system for e-invoicing. This accreditation system will ensure that businesses meet the standards for e-invoicing.

As Canada continues to find ways to implement an effective electronic invoicing platform, the Business Payments Coalition has provided an alternative. Like PEPPOL, the DBNAlliance will help businesses manage and track their invoices.

Conclusion

E-invoicing is a growing trend in Canada. The recent Digital Business Networks Alliance (DBNAlliance) by the Business Payments Coalition is the latest e-invoicing solution.

It will help B2B transactions and the exchange of documents for countries in North America (Canada and the USA).

Storecove is a DBNAlliance Access Point provider that businesses can use to ensure compliant and accurate invoices. Contact us today to get started with e-invoicing in Canada.

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