What’s the Difference Between E-Invoicing and Digital Invoicing?

Businesses are moving away from paper invoices—but terms like e-invoicing and digital invoicing are often used interchangeably. In reality, they mean very different things.

While digital invoices are typically PDFs sent by email, electronic invoices (or e invoices) follow a standardized, structured data format. This allows for seamless integration with accounting software, automated workflows, and faster tax compliance.

In this article, we explain the difference between the two—and show how tools like Kolleno’s e-invoicing solution can help finance teams simplify the invoicing process, reduce manual work, and speed up cash flow.

What Is Digital Invoicing?

Digital invoicing refers to the process of creating, sending, and storing invoices in an electronic format—typically as PDF invoices sent via email. It’s a common first step for businesses moving away from paper invoicing and toward more streamlined billing.

Unlike paper invoices, digital invoices are easier to distribute, faster to process, and less prone to loss or damage. They’re usually created using accounting software or invoice templates, then shared with customers via email or uploaded to an online portal.

But while digital invoicing removes the need for printing and postage, it still involves manual steps. Someone needs to generate the invoice, attach it to an email, and update the records once payment is received. In most cases, the customer must also manually enter that data into their own accounting system.

In short: a digital invoice may be easier to send, but it doesn’t guarantee automatic and electronic processing. It’s still static—a flat file, not structured data—which limits its ability to integrate with other business systems or support automation.

What Is E-Invoicing?

E-invoicing (short for electronic invoicing) refers to the automated exchange of invoice data between systems in a structured electronic format. Unlike digital invoices, which are usually static PDF files, e invoices are machine-readable documents—often using XML or standards like PEPPOL—that flow directly from one accounting system to another without human intervention.

This structure allows for true automated processing. Invoices can be received, validated, matched to purchase orders, and recorded in your accounts payable system automatically. It also supports real-time invoice status updates, audit trails, and tax reporting compliance—especially in countries where e-invoicing is mandatory.

Because e-invoices follow specific data standards, they integrate seamlessly with ERP systems, invoice software, and financial processes. They also enable continuous transaction controls (CTCs), where tax authorities can review transactions in real time—a growing requirement in jurisdictions across Europe, Latin America, and Asia.

Platforms like Kolleno help finance teams take full advantage of e-invoicing by offering an e-invoicing solution that works across borders, syncs with leading ERPs, and reduces the burden of manual data entry. For businesses dealing with high volumes of incoming invoices or complex tax compliance requirements, e-invoicing is becoming increasingly essential.

It’s easy to confuse digital invoices with electronic invoices, but the two serve very different functions—and only one supports end-to-end automation.

Here are the differences at a glance:

A digital invoice is a static document—readable by humans, but not by machines. You can’t extract structured fields (like invoice amount, due date, or vendor ID) without extra tools or manual effort. It’s a digital file, not a data stream.

An electronic invoice, on the other hand, is built for automation. It transmits invoice information as structured data, enabling systems to validate, reconcile, and record invoices automatically. This is what makes electronic invoicing so valuable for large-scale accounts receivable and accounts payable operations.

For example, Kolleno’s e-invoicing solution enables the seamless exchange of e invoices across platforms, ensuring full compliance, reducing manual effort, and improving the accuracy of your financial processes.

If you’re looking to eliminate manual input, reduce errors, and speed up your payment cycle, it’s e-invoicing—not digital invoicing—you need.

When Should You Use E-Invoicing?

While digital invoicing offers a basic level of convenience, it doesn’t scale well—and it doesn’t support automation, compliance, or efficient reconciliation. That’s where electronic invoicing stands out.

If your business handles a high volume of invoices, operates across borders, or needs tighter control over cash flow and compliance, switching to an e-invoicing solution can transform your finance operations.

Here are the key situations where e-invoicing makes sense.

High Invoice Volumes

Manually processing hundreds—or thousands—of digital invoices each month puts a heavy strain on your accounts payable and accounts receivable teams. E invoices automate much of that work, reducing errors, lowering processing costs, and helping teams scale without growing headcount.

Complex Approval or Reconciliation Workflows

If your invoicing process involves matching invoices to POs, routing for approval, or reconciling payments across multiple departments or systems, e-invoicing removes friction. Using structured data, invoices can be validated, routed, and approved automatically—reducing delays and freeing up your team for more strategic tasks.

Cross-Border or Multinational Operations

E-invoicing is especially useful for companies operating across countries or entities. It helps standardize the invoice data exchanged between business systems, supports multiple data formats, and makes it easier to comply with local legal requirements.

E-invoicing solutions like Kolleno are designed with cross-border functionality in mind—supporting structured invoices, localization rules, and integrations with global ERP systems.

Regulatory or Tax Compliance Requirements

Many countries have introduced or are planning mandatory e-invoicing mandates—particularly in Europe, Latin America, and parts of Asia. These often require invoices to be submitted in real time to tax authorities using approved electronic data interchange (EDI) or government platforms.

If your business operates in any of these regions, adopting e-invoicing is not optional—it’s a compliance requirement. Kolleno helps ensure that your e-invoicing processes stay aligned with the latest tax reporting and compliance obligations.

Is E-Invoicing Mandatory in My Country?

Governments around the world are increasingly mandating electronic invoicing as part of broader efforts to modernize tax reporting, reduce fraud, and improve financial transparency. These mandates typically require businesses to issue and receive electronic invoices in a structured format, often through approved platforms or government portals.

If your business operates internationally—or plans to—you’ll need to stay ahead of these regulations to remain compliant.

Where E-Invoicing Is Already Mandatory

Several countries have already made e-invoicing mandatory for B2B or B2G (business-to-government) transactions. These include:

• Italy – Full B2B and B2G e-invoicing is mandatory via the SDI platform
• France – Rolling out mandatory e-invoicing for all businesses by 2026
• Mexico & Brazil – Longstanding electronic invoicing requirements using national platforms
• Poland – Introducing mandatory e-invoicing in 2024 via KSeF
• India – E-invoicing required for companies over certain turnover thresholds
• Saudi Arabia – Phased implementation of e-invoicing systems, including continuous transaction controls

Upcoming E-Invoicing Mandates

Many other countries—including Germany, Spain, and Belgium—are actively implementing e-invoicing processes in the next 1–3 years. These will likely include strict formatting, real-time reporting, and system integration requirements.

It’s important to note: sending a PDF invoice by email will not meet these legal requirements. You’ll need to adopt e-invoicing software that supports structured data formats and integrates directly with government or tax platforms.

How to Stay Compliant

The best way to stay compliant is to adopt an e-invoicing solution that keeps pace with changing global standards. Platforms like Kolleno are built to adapt to evolving legal requirements, helping finance teams issue compliant e-invoices without the need for separate tools or manual submissions.

If your business operates across borders—or plans to—now is the time to prepare.

How to Transition From Digital Invoicing to E-Invoicing

Moving from digital invoicing to true electronic invoicing doesn’t happen overnight—but it also doesn’t need to be disruptive. With the right strategy and tools in place, your business can upgrade its invoicing processes, reduce manual effort, and unlock the full benefits of automated e-invoicing.

Here’s how to approach the transition.

1. Assess Your Current Invoicing Process

Start by mapping out how invoices are currently created, sent, received, and recorded. Are you still using PDF invoices? Are your systems integrated? Is any part of the process still manual?

This will help you identify gaps, such as reliance on scanned paper invoices, duplicate entry across accounting systems, or inconsistent formats that block automation.

2. Understand Your Regulatory Landscape

Check whether your country—or the countries you operate in—have introduced or are planning mandatory e-invoicing requirements. This will guide what functionality your next system must support, such as structured data formats or real-time reporting to tax authorities.

3. Choose the Right E-Invoicing Solution

Not all e-invoicing platforms are created equal. Look for a provider that:

• Integrates with your existing ERP or accounting software
• Supports compliant structured electronic formats (e.g. XML, UBL, PEPPOL)
• Handles cross-border invoicing and localization
• Offers clear audit trails and tracks invoice status in real time
• Automates the full e-invoicing process from issue to payment

Kolleno’s e-invoicing solution ticks all these boxes—helping finance teams streamline operations while meeting local and international compliance standards.

4. Automate and Monitor

Once live, monitor your system’s performance. Track how much manual data entry has been reduced, how fast invoices are processed, and the impact on cash flow and financial processes.

The best e-invoicing systems don’t just replace paper—they create a scalable, automated workflow that frees your team to focus on more strategic work.

Final Thoughts

The terms digital invoicing and electronic invoicing are often used interchangeably—but the differences matter. If you’re emailing PDF invoices, you’ve made progress from paper invoicing—but you’re still relying on manual steps that limit speed, accuracy, and scalability.

E-invoicing, on the other hand, delivers structured, machine-readable invoices that integrate directly with ERP and accounting systems. It supports automated processing, improves compliance with legal requirements, and reduces the admin burden on your finance team.

If you’re handling large volumes of invoices, operating across borders, or preparing for new compliance rules, now’s the time to make the shift.

Kolleno’s e-invoicing solution gives you everything you need to make that transition—seamlessly. With native ERP integrations, support for structured data formats, and full automation, it helps finance teams modernize their invoicing processes without creating extra complexity.Ready to go beyond PDFs? Book a demo and see how Kolleno simplifies e-invoicing for growing businesses.