What is an invoice?

An invoice is one of the most basic documents a business uses, but also one of the most important. It serves as a request for payment, in which the seller lists what has been delivered and the amount the buyer is required to pay.

All companies deal with two types of invoices on a daily basis:

• Customer invoices – invoices sent to customers
• Vendor invoices – invoices that the company receives itself

Customer invoices usually look similar because they are generated in business or financial systems. Supplier invoices, on the other hand, can come in all sorts of layouts and formats depending on how each supplier chooses to send them. This is one of the reasons why digital invoice processing has become so important.

In practice, there are three common invoice formats. They differ significantly in how they are handled and to what extent they can be automated.

Paper invoice

The traditional method is to send invoices by mail.
This is still common in small businesses or markets with low levels of digitization.

Disadvantage: Always requires manual handling and is susceptible to errors or lost documents.

PDF invoice

A digital file sent via email.
This is the most common format in the Nordic region today.

PDF is digital but unstructured. Therefore, it requires:

• manual entry
• or OCR conversion

With the right system, PDFs can still be processed automatically, but never as smoothly as an e-invoice.

E-invoice (electronic invoice)

The most efficient and most automation-friendly format.

An e-invoice is sent in a structured format (usually XML) via a secure network, such as Peppol.

Advantages:

• No OCR
• fewer errors
• high data quality
• automatic (touchless)
• faster processing

That is why e-invoicing has become the standard for companies that want to work smarter.

There are no formal layout requirements for paper and PDF invoices, but clarity is important:

• The right information should be easy to find
• The amount and details must be finalized
• The layout should be easy to understand, even for automation

For e-invoices, however, the format is strictly standardized (e.g., PEPPOL BIS).
It is precisely this standard format that makes e-invoices so effective in automated workflows.

An invoice is more than just a payment document; it is a central part of a company’s financial workflow. By:

• ensure the right content
• choose the right format
• use e-invoices for automation

…companies can reduce manual processing, improve data quality, and establish an efficient invoicing workflow.