Peppol e-Invoicing and e-Procurement in Canada

E-invoicing and e-procurement platform PEPPOL was introduced in Canada in 2018. It allows businesses to easily send and receive invoices electronically and track orders and payments.

Peppol is a cloud-based platform that allows invoicing and procurement between businesses and government organizations, transforming the traditional way of doing business. The Peppol platform is based on an initiative by the Austrian government, and it is now used in over 35 countries worldwide.

Peppol is making it easier than ever for Canadian companies to conduct transactions with the government. Whether you're looking to submit an invoice or find a supplier, Peppol has you covered!

Keep reading to learn more about the e-invoicing regulations in Canada, who they are meant for, and how you can send and receive compliant electronic invoices.



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

The Canadian government has mandated that all e-invoices be in the Universal Business Language (UBL) format. This 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, invoice number, and a description of the goods or services sold. 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) - is a tax levied 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) - is a tax levied 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 governs e-invoicing and e-procurement in Canada?

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

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.



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 will likely become mandatory for all businesses in Canada.  But currently, only companies that sell to the government must comply with e-invoicing regulations.


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 can help businesses save time and avoid errors when filing their taxes, leading to interest and penalties.


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 someone with the key can only 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 Peppol to send and receive e-invoices.

The Pan-European Public Procurement Online (PEPPOL) network is a European initiative that enables businesses to send and receive e-invoices. Businesses are already using PEPPOL 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
  • The invoice date
  • The due date
  • The invoice number
  • A description of the products or services sold
  • The quantity of the products or services sold.

2. Peppol Access Point

The business then sends the invoice to the customer through a Peppol Access Point. A Peppol Access Point is an online platform that allows businesses to send and receive e-invoices. Businesses will need to register for a Peppol Access Point in the following steps:

  • Create an account with a Peppol service provider
  • Select a business identifier, such as a duns number
  • Obtain an electronic certificate.

Storecove is a Peppol 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 offers a free trial, so businesses can try it out before committing to using it.


3. Sending the invoice

The business then sends the invoice to the customer through the Peppol Access Point. The customer will receive an email notification that they have received an invoice.


3. The customer’s Peppol Access Point

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


4. Payment

The customer can proceed to make a payment. The payment will be processed and the funds will be transferred to the business’s account.


5. 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:

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.


Implementing an enforcement mechanism

The Canadian government is working on implementing an enforcement mechanism for e-invoicing.



Conclusion

E-invoicing is a growing trend in Canada. The Canadian government is working on developing a legal framework and standards for e-invoicing compliance. In the meantime, businesses can use Peppol Access Points to send and receive e-invoices.

Storecove is a Peppol Access Point provider that businesses can use to manage their invoices. Sign up to Storecove today to get started with e-invoicing. Our free trial will allow you to try out our features and see how we can help your business.


More information about e-invoicing in Canada?

Call us on: +31 (0) 20 261 17 91 or send an e-mail to: helpdesk@storecove.nl


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