How the challenge of e-invoicing can transform your tax function 

Will e-invoicing bring real-time challenges or kickstart real tax transformation?

Whether your business is actively thinking about it or not, its future is likely tied to what happens with e-invoicing. Around the world, governments are moving from periodic returns to real-time or near real-time digital reporting. In other words, tax and compliance filings that could be double-checked before filing at a later date would instead be sent to regulators instantly.

Deirdre Hogan: "I think this is probably a new high bar because I think it really is very transformational in the sense that you are now going to have real time reporting essentially.”

Dierdre Hogan is a partner who leads the indirect tax practice for Ernst & Young Business Advisors, Ireland.

Hogan: “It's a game changer. The data is going to have to be correct. Their tax determination will have to be correct or they risk being kind of audited in real time as well. And there's no place to hide essentially, I think in this new regime.”

Regulatory momentum is building around e-invoicing, with more than 100 jurisdictions updating compliance requirements so far. France, for example, will require all companies to receive e-invoices from September 2026. Mexico and Brazil, meanwhile, have long operated clearance style systems that validate invoices before they are sent to customers. Moreover, India continues to lower the threshold requiring more businesses to adopt e-invoicing. So, if this isn’t yet a major issue for your jurisdiction, it likely will be for organizations that trade internationally. And this may be a trigger for organizations to have a necessary rethink of their data systems, security and processes. 

The case for transformation

Hogan: “I think it's a perfect storm in a good way for tax departments in the sense of, you ask any tax team, you know, do you have data issues? Or what quality is your data in? I've never met one that says it's near where they'd like it to be. You know, most clients are operating on ERP systems that have been around for a long time. They’ve had acquisitions. Because of that, there's gaps in their data as well, right or their master data may not have been up to where it needs to be. So this is really strong impetus for tax departments to go to their CFO, to go to their leadership team and say: this is a regulation or requirement, like we have to implement this new change. But let's do it right and why don’t we take the time to get all of the other aspects of our tax function that have been giving us pain for a while including our master data, why don’t we give that the oversight that it needs now and fix it all at the same time?”

Real-time reporting means organizations must now be data-ready in advance. They also need the right technology solutions and processes to meet each country's specific requirements. A centralized model can bring consistency and control to faster processes, but local rules can vary widely.

Chiu Ming Man: “This is one of those tightropes that we talk to our clients all the time, particularly the multinationals.”

Chiu Ming Man is a Partner at Ernst & Young LLP focusing on tax technology and transformation.

Man: “So what we're seeing importantly is the need to move towards what I would call modular architecture and what do I mean now, I mean global platforms but with local plugins. So, you know, think of it another way: looking at global governance over e-invoicing, but with local execution.” 

There are a lot of moving pieces that need to connect from start to finish. With any regulatory change, there is a need for a tactical response, but this can create uncertainty in how it will impact the tax department’s workload, potential costs to change processes, and unseen side effects.

Chiu Ming Man says details of implementation will vary.

Man: “I think it depends on organization to organization. A lot of organizations already have. If we take for example their indirect tax functions within their tax department, they already have the opportunity to look at things that are granular, transaction level, and many multinationals are already operating their indirect taxes at a global level but obviously taking into account localization. So the opportunity here is to expand and scale that operating model, but importantly take it upstream as well.”

Tax functions transforming at the speed of change

So, could the smart response to e-invoicing regulations and digital reporting be a broader technology transformation for the tax department?Hogan says the earlier the better for tax leaders to think holistically, the better.

Hogan: “What else is going on in the business? What other technology projects are there? What’s the overall business strategy around data and AI, right? And I think the AI and the e-invoicing and the ERP, all that ecosystem is going to start to merge, and you’re going to see maybe agentics come into play and start being part of that tax function. And so really stepping back and thinking: OK, I've got three years, but there's so much going on. Why don't I try and break it all down, get my road map, get my strategy and then I can make sure I'm taking advantage of all of the things that are out there that are available to me to enhance my tax function to make sure that I'm ready and that when it is go live, I've got the best and most efficient system in place because I put that time and effort into it from a strategic perspective at the outset. And I know that's like the Holy Grail probably.”

A roadmap to the “Holy Grail” of tax transformation may sound aspirational, but there are practical steps to take and concrete milestones to target. 

Again, here’s Chiu Ming Man.

Man: “Look, e-invoicing isn't going away. We are seeing this becoming a global phenomena across the EU. By 2030, the whole of the European Member State will need to have an e-invoicing regime. What's important now is to really for businesses to start a diagnostic. Understand their current e-invoicing landscape, understand where the gaps are, and then build a road map focusing on short term compliance, but also longer-term transformation engaging IT, other stakeholders early is going to be critical to that. And then finally, I think it's about choosing a scalable platform.”

A closer look at the roadmap

1. Start with a global view of mandates. Maintain a live heatmap of current and upcoming requirements across your footprint. Requirements are changing fast so the global view is crucial.

2. Next, design an enterprise data model for e-invoicing. Standardize data classification and systems. The goal is simple: get it right first time.

3. Choose an architecture that scales. Many multinationals are adopting hub-and-spoke patterns: a central service that applies tax logic, security and monitoring, with local connectors. This approach lets you control the core while meeting local validation schemas and timings.

4. Embed real- time controls. Build pre-validation checks into the billing flow and implement alerts for rejection codes so business users can resolve issues quickly. (Remember, some regimes treat non-validated invoices as non-existent for tax purposes.)

5. Lean into the upside. Once data is reliable and timely, analytics becomes strategic. Real-time invoice data strengthens forecasting abilities and eventually helps you reach your business goals.

It’s never too early to figure out what requirements your organization may face, so begin taking steps toward where you need to be. Maybe the question isn’t how can e-invoicing help tax departments transform, but how far ahead are you willing to lead?

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Conversations in this podcast should not be relied upon as accounting or legal, investment or other professional advice. Listeners should consult their own advisors. The views expressed in this podcast are not necessarily the views of the global EY organization or its member firms and should be considered in the context of the time in which they were made.