E-Invoicing Software in the UK: Overview and Top Solutions

Tapping into the global economy has become a competitive landscape and Chief Financial Officers (CFOs) from the UK have been tasked with saving every penny. 

One area full of opportunities is accounts payable—more specifically, invoice processing. Traditional, paper-based invoicing drains time and resources. It leads to costly errors that strain cash flow and vendor relationships. This is where electronic invoicing (and a robust e-invoicing system) fills the gap.

The adoption of e-invoicing is growing exponentially, with a market expected to reach more than $60 billion by 2032 (at an annual rate of 17%). It transforms the invoice process into a streamlined, digital workflow that reduces human intervention, eradicates errors, and accelerates payment cycles.

Here, we take a quick look at what e-invoicing software is, why it will streamline your business processes, and how to choose the best solution to eliminate manual data entry and stimulate cost savings.

What is E-Invoicing Software?

It all starts with the question, what is electronic invoicing? What tools do I need? E-invoicing software is part of procurement and AP automation systems that enable a company to create, send, receive, and manage invoices (and other documents) in an electronic format. By replacing manual tasks with automated invoice management, e-invoicing streamlines the entire invoice processing lifecycle, from creation to validation, tracking, payment processing, and archiving.

UK E-Invoicing Formats

E-invoicing solutions support a variety of invoice formats, including PDF and XML, and are designed to meet the compliance requirements of specific industries and regions. In the UK, e-invoicing formats are completely standardised to ensure interoperability, regulatory compliance, and to optimise cross-border transactions.

While a full legal mandate for e-invoicing is not yet in place in the UK (like in some EU countries), the government strongly encourages its adoption, particularly within the public sector. Many of these formats and invoice templates also follow guidelines established under the European standard on electronic invoicing, EN 16931, which is widely accepted in the UK.

Here are some of the key e-invoicing formats used in the UK:

• PEPPOL BIS Billing 3.0: The most widely used e-invoicing standard across Europe and increasingly adopted in the UK, supported by the Pan-European Public Procurement Online (PEPPOL network).
• UBL (Universal Business Language): UBL is an internationally recognised e-invoicing format based on XML.
• CII (Cross Industry Invoice): Developed by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), this is an XML-based format that complies with European and global standards.
• Other Formats: While the above are most common, some businesses may still use older or industry-specific formats. A good e-invoicing platform should handle a range of formats.

Key Compliance Frameworks

While the UK largely aligns with the European Standard EN 16931 for e-invoicing structure, it’s important to remember that the UK is no longer part of the EU. Therefore, while EN 16931 remains a voluntary standard in the UK, its adoption has become de facto mandatory for NHS suppliers through PEPPOL requirements.

• EN 16931 Compliance (Recommended): Although not legally required in the UK, compliance with EN 16931 is highly recommended. Formats like PEPPOL BIS Billing 3.0 and UBL are compliant, making them interoperable internationally.

• UK VAT Compliance: Each business in the UK has its specific requirements for VAT compliance. E-invoicing systems must ensure that all invoices meet HMRC (His Majesty’s Revenue and Customs) requirements for VAT record-keeping and reporting.

• Data Protection: The UK GDPR (General Data Protection Regulation) governs data protection. E-invoicing systems must comply with these regulations to protect sensitive invoice data.

Adopting e-invoicing software solutions helps a business modernise invoicing workflows, reduce administrative burdens, and improve cash flow through faster, more accurate billing.

The Benefits of E-Invoicing Software

Companies need e-invoicing to remain competitive, improve operational efficiency, and enhance financial control in an increasingly digital economy. Here are a few key benefits a business can reap from online invoicing processing:

Cost Savings

Paper-based invoicing includes costs for:

• Paper
• Printing
• Postage
• Storage

E-invoicing software eliminates these expenses by digitising the entire process. Reducing errors and optimising workflows means companies avoid the costs associated with fixing mistakes and managing disputes.

Enhanced Speed

Traditional invoices can take days or even weeks to process. Digital invoice data accelerates the invoicing process by automating time-consuming steps such as data entry, validation, and approval workflows. E-invoicing software allows for instant delivery and automated routing, meaning invoices reach approvers faster, significantly reducing the payment cycle.

Improved Compliance

Global business operations require specific invoice rules depending on the country. Industries and governments have certain compliance requirements for invoicing, such as data storage, reporting, and format standards.

E-invoicing and payment software is designed to comply with localised regulatory standards, helping businesses avoid penalties and audits. These tools also provide a centralised, digital record of every invoice, making it easy to track transactions and provide supporting documentation. This is essential for tax compliance in the UK.

Additional Benefits of E-Invoicing

• Improved Accuracy: Validates vendor invoice data before payment is sent, reducing duplicates and compliance risks.
• Better Cash Flow: Optimises cash flow by speeding up approval and the payment process, reducing payment delays.
• Improved Relationships: Faster and accurate invoicing improves supplier relationships, enhancing transparency.
• Real-Time Analytics: Insights into invoice processing times, payment trends, and outstanding balances.
• Easy Scalability: Software will meet increasing demands, making it a practical long-term investment.

The Best E-Invoicing Solutions for UK Organisations

Tipalti

Tipalti is an automated, cloud-based accounts payable and e-invoicing solution that streamlines global payments and compliance. It’s particularly well-suited for companies that work with global vendors and manage complex AP workflows. Tipalti integrates with PEPPOL via certified third-party providers. It is also fully compliant with UK VAT regulations and supports GBP.

Pros

• End-to-end AP automation from invoice data capture to approvals, payments, and reconciliation.
• Multi-currency and multi-country compliance, including UK VAT and tax regulations.
• Integrates well with global ERP systems, making it ideal for scaling businesses.
• Offers fraud detection, secure payments, and robust financial controls.
• Self-service supplier portal to empower partners to manage contact details and invoice status

Cons

• Some small businesses may not need global features
• Setup and customisation may require initial support.

Pricing

Tipalti pricing starts at £79/month for the basic AP automation plan (with custom pricing based on volume (invoices and purchase orders) and features).

Basware

Basware is a popular e-invoicing and procure-to-pay solution with a strong focus on automation and compliance for large and mid-sized enterprises. Known for its powerful analytics, Basware is a good fit for companies with a high volume of invoices. Basware meets UK VAT compliance via line-level data for HMRC audits.

Pros

• Global compliance support and multi-language capabilities.
• Advanced analytics and reporting for strategic insights and decision-making.
• Highly configurable to fit unique business workflows and organisational needs.

Cons

• It can be complex to implement and may require more time for onboarding.
• Higher costs due to scalability and customisation options, which may deter a small business.

Pricing

Basware pricing is often customised, and is generally in the higher range due to the comprehensive features and functionality. 

Spendesk

Spendesk is a spend management solution that also handles invoice processing. It is helpful to UK businesses looking to digitise their accounts payable.

Pros

• Spend control
• Expense reimbursements
• Budgets

Cons

• While Spendesk supports multiple formats through API integration, its e-invoicing features are secondary to core spend management functions and require developer resources for full implementation.
• Potentially expensive for larger businesses, as price is linked to users.

Pricing

• Spendesk offers tiered pricing plans. The ‘Essential’ plan starts at £199 per month, ‘Scale’ at £599 per month and Premium from £1,499.

Payhawk

Payhawk offers invoicing as part of a broader suite of financial management tools. The solution offers good invoice and expense integration.

Pros

• Company cards and expense reports.
• FCA-regulated EMI license ensures compliant UK payment services.

Cons

• XML invoice support requires compatible ERP integration and the format compatibility depends on connected accounting systems.
• Primarily expense and card solution.

Pricing

• Payhawk’s pricing is flexible. While they offer a ‘Growth Program’ plan for small businesses (under 20 employees) starting at £149/month, their standard plans, features and prices are available on request.

Coupa

Coupa’s primary focus is within procurement, with e-invoicing integrated. The company Specialises in cXML integration for ERP/accounting system compatibility. 

Pros

• Qualified e-signatures for UK/EU compliance.
• Supplier management.
• Offers a range of invoice formats.

Cons

• Aimed towards larger firms. 
• Custom pricing, cXML integration costs vary by ERP complexity. 

Pricing

Custom pricing. It’s targeted towards larger organisations.

How to Choose the Right E-Invoicing Solution for Your Business

Choosing the right software involves careful evaluation of your business needs, budget, and future growth plans. Here’s a quick step-by-step guide to help you find the best e-invoicing solution:

1. Assess Current Business Needs and Goals

Consider the volume of monthly invoices processed and the complexity of these transactions. Identify any legal and regulatory requirements relevant to your business. For example, does the solution support formats like PEPPOL and comply with UK VAT and GDPR regulations?

2. Identify Key Features

For the majority of businesses, they’ll need a solution with features like:

• Automation for data capture, PO matching, and approval workflows
• Integration with ERP and other legacy accounting systems
• Customisable workflows and flexible configurability
• Comprehensive analytics and reporting to monitor performance
• Strong data encryption and secure user authentication

If you’re doing global business, consider a solution that also offers multi-currency and multi-language support. Systems like Tipalti offer real-time exchange rates and transactions in a variety of currencies to ensure swift and accurate processing. Ensure the system handles GBP and UK VAT correctly.

3. Evaluate Implementation

The longer it takes to implement a solution, the costlier it can become. Choose a system with an intuitive dashboard that minimises the learning curve. This is particularly important for teams that are new to e-invoicing. Consider e-invoicing and accounting software that offers training and customer support during and after the onboarding process.

4. Analyse the Total Cost of Ownership

Be sure to compare pricing plans and licence fees across all vendors. Some offer monthly or annual subscriptions, while other brands require upfront costs. A business needs to look beyond basic fees to understand the total cost of ownership. This includes setup fees, integration costs, training expenses, and additional fees for add-on features.

5. Test the Solution

Many service providers offer free trials or demos. Take advantage of these and test the functionality, ease of use, and integration capabilities of the system. Involve finance and accounting teams to gather feedback and assess whether the potential solution meets your operational needs.

Summing It Up

Selecting the right e-invoicing solution is key to improving financial efficiency, enhancing compliance, and reducing manual workload. Using systems like Tipalti gives organisations access to a variety of tools that offer distinct strengths—from multi-currency capabilities and AI-driven automation to a simple, user-friendly interface.

Aligning the features of each solution with your specific business needs, budget, and growth goals unlocks the full potential of digital invoicing and ensures a smoother, more optimised AP process. Ready to begin your e-invoicing journey? Get started with Tipalti e-invoicing today.

FAQs

Note: This text is based on publicly available information as of March, 2025 and is subject to change. For the most up-to-date and accurate pricing information for your specific business requirements, contact the software providers directly. The information provided here is for general guidance only and does not constitute professional tax or legal advice.