What is self-billing, and how does a self-billing invoice work?

Self-billing is a financial agreement between a payer (customer) and a payee (supplier, contractor, affiliate, creator, publisher, freelancer, etc.). In most cases, the payer prepares the invoice and sends it, along with the payment, to the payee. This financial arrangement eases transactions and virtually eliminates the payee's responsibility to write and send an invoice to their customer. How Self-Billing Works Agreement between parties: the buyer and supplier must first agree to a self-billing arrangement. This process must detail each party's terms, conditions, and responsibilities. In some regions, a formal self-billing agreement may be legally required. Sending self-billing invoices: rather than the supplier issuing a sales invoice, the buyer generates it themselves. The invoice will typically include all the standard details, such as the supplier's name, the buyer's name, the goods or services provided, the amount due, and any applicable taxes. Supplier invoice approval: the supplier must review and accept the self-billing invoice. They are still responsible for accounting for the transaction in their records. Tax compliance: the buyer is responsible for ensuring the self-billing invoice complies with all relevant tax regulations, including VAT regulations or sales tax rules. This responsibility includes assigning the correct tax codes and calculating tax amounts correctly. Payment: the buyer processes payment based on the self-billed invoice and correct information. Payment terms, amounts, and due dates are agreed upon in advance and should be detailed in the self-billing agreement.

What is the difference between a self-billing invoice and a traditional invoice?

Traditionally, the payee creates and sends an invoice to the payer for review and payment. In a self-billing invoice workflow, the payer is responsible for the invoice. They create and issue the invoice on behalf of the payee. Self-billing invoices, or digital bills, can be created by passing digital bill instructions to Tipalti via CSV file upload or API. A digital bill file contains payment instructions and allows for the flexible creation of an invoice record within Tipalti.

What are the benefits of using Tipalti’s self-billing invoice solution for my self-billing needs?

There are several use cases and benefits of self-billing invoice strategies. Tipalti’s self-billing invoice solution offers advantages like: Itemisation Self-billing is a great way to show payment breakdowns if multiple payments must go to a payee. Custom fields can capture all required and relevant details so payees know precisely what they are being paid for. For example, royalty payments to an artist can show the breakdown of payments per song and commission fees that were deducted. Global Regulatory Compliance Regions like Europe, Australia, and Israel require a company to have an invoice on record. Self-billing allows Tipalti to create an invoice (and invoice image) on the payee's behalf, fulfilling this requirement and creating an audit trail. VAT compliance is essential. The self-billed VAT invoice must comply with all VAT regulations, including the proper identification of the buyer and supplier, accurate total VAT invoice rates, and other relevant details, such as the VAT registration numbers of both parties. Additionally, in certain countries, payees must approve bills to ensure that the payments are legitimate and that the payee has authorised the payment. This process is often done to prevent fraud and to protect the payee's financial interests. Self-billing with Tipalti supports payer approval, payee approval, payer and payee approval, and no approval workflows. Accuracy and Efficiency Often, payees send invoices to payers, who must check the invoice against what has been calculated in their proprietary or third-party system and verify what is owed to each payee. This process could be more efficient, especially if discrepancies exist between the invoice and internal systems. Payers must contact payees to troubleshoot; payees may not send invoices on time. Invoices from various payees come in different formats and often need critical information, etc. Self-billing invoices can eliminate these issues and yield extra cash flow and time savings. When you use self-billing (a self-biller) it opens up opportunities for easier validation, quicker calculations of the VAT rate, faster VAT returns, a streamlined generation of a VAT notice. ERP Integration Digital bill records sync to ERPs such as NetSuite, Sage Intacct, Quickbooks Online, Xero, and more. Centralised Payable Management With self-billing documents, payers can streamline their invoice-backed and non-invoice-backed workflows in a single platform with Tipalti. Take, for example, an affiliate network looking to process non-invoice-backed payments to affiliates and invoice-backed payments to their suppliers. Issuing self-billed invoices is a great solution that facilitates a traditional accounts payable workflow and a mass payments workflow in a single instance of Tipalti. It’s more than just an accounting system or simple accounting software. It helps businesses get their VAT-registered invoices to the right place, at the right time.

Self-Billing Invoices

Simplify self-billing processes with automated invoice creation, submission, and approval workflows while ensuring global regulatory compliance for the situations and countries that require invoices.

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Self-Billing Invoice Features

We Handle Invoices, So You Can Handle Business

Relieve payees from sending invoices. Generate invoices on behalf of your payees to elevate their payment experience and enhance the efficiency of your payment workflows.

Easy Invoice Creation

Send instructions to Tipalti via CSV or API and create invoices for your payees, making their lives easier and giving you complete control. No more verifying the accuracy of incoming invoices, missing invoice details, inconsistent invoice formats, or missed invoice submission deadlines.

Flexible Approval Workflows

Self-billing supports payer approval, payee approval, and payer plus payee approval workflows to ensure all payments are authorised and legitimate. While approval workflows are optional, payee approvals may be a requirement in some markets.

Itemised Invoice Detail

Give your team and payees a clear picture of the details behind every payment. Custom fields can be used to capture every relevant item on an invoice.

Global Regulatory Compliance

Countries worldwide require payers to have an invoice for every payment. Self-billing allows you to create an invoice and invoice image for payees to fulfil these requirements.

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Seamless Pre-Built Integrations

Seamlessly create invoices using data from your performance marketing systems while syncing detailed, accurate transaction and reconciliation reports with your ERP system.

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Complete Payables Management

Centralise your traditional accounts payable invoice processes and self-billing workflows for mass payments in a single platform.

Integrations

Pre-built connections to extend automated workflows

Easily extend and simplify your workflows with pre-built integrations and powerful APIs for your ERPs, accounting systems, performance marketing platforms, HRIS, SSO, Slack, credit cards, and more.

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Customer Stories

Don’t just take our word for it,

see what our customers are saying

Spitfire Audio

Manual, Excel-based processes for managing royalty payouts were time-consuming, prone to errors, and hindered global growth

Product

Region

Industry

Size

Ninja Tune

Since adopting Tipalti, Ninja Tune has reduced its payment processing time by 50% and typically pays artists about a week earlier than before.

Product

Mass Payments

Region

United Kingdom, Global

Industry

Music royalties

Size

Sub 100

The Art of Problem Solving

Art of Problem Solving cut 5 days of manual payment work and shortened monthly close time by 20 days.

Product

Region

Industry

Size

Thematic

Thematic cut the need for 3 team members by automating global payments and streamlined artist onboarding and royalties with a self-service portal.

Product

Mass Payments

Region

United States, Global

Industry

Music royalties

Size

Sub 100

Matterport

Matterport sped up monthly close by 40% and avoided hiring an additional full-time employee for accounts payable.

Product

AP Automation

Mass Payments

Region

United States, Global

Industry

Software and technology

Size

100 – 1000

Aragon Advertising

Aragon Advertising cut 20 days of monthly payment ops work, freeing its 20-person team and avoiding the need for extra hires.

Product

Mass Payments

Region

United States, Global

Industry

Affiliates and influencer networks

Size

Sub 100

Lenus

Lenus cut payment processing time by 35%, scaled global payments across 11 countries, and supported 550+ vendors worldwide.

Product

Region

Industry

Size

Freestar

Freestar saved a week monthly on payouts, improved controls, ensured tax compliance, and avoided hiring 2 extra team members.

Product

Region

Industry

Size

Tapjoy

Tapjoy cut payment workload by over 50% and boosted developer satisfaction with timely, flexible payment options.

Product

Mass Payments

Region

United States, Global

Industry

AdTech

Size

100 – 1000

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How It Works

Up and Running in Weeks, Not Months

Collaborative customer support with customised onboarding to get you operational quickly

Step 1

Plan

Kickstart your success with a comprehensive initial call to align on goals, scoping, and technical configurations for your setup and to prepare you for training.

Step 2

Configure

Customer onboarding experts configure Tipalti sandbox and production environments, test the hosted payee portal or embedded iFrame, execute sample payment runs, and establish integrations.

Step 3

Deploy

In-depth training on the Tipalti Hub and end-to-end payment automation functionalities will ensure thorough knowledge transfer to turbocharge your successful launch.

Step 4

Adopt

Tipalti supports user adoption and change management during launch with the option to guide payees through onboarding too. Once set, you’ll be ready to fund your Tipalti Virtual Account, execute your first batch of payments, and officially launch Tipalti.

Step 5

Optimise

Following your setup, technical support teams are always available by phone and email, and the Tipalti customer success team will continuously advise you on achieving your goals.

Transparent, Scalable Pricing

Our flexible pricing adapts to businesses of all sizes. Pay only for what you use—no extra costs, no client-based fees. Simple, predictable, and budget-friendly.

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