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: Itemization 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 authorized 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. ERP Integration Digital bill records sync to ERPs such as NetSuite, Sage Intacct, Quickbooks Online, Xero, and more. Centralized 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. To issue 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.

Home / Mass Payments / Self-Billing Invoices

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.

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 authorized and legitimate. While approval workflows are optional, payee approvals may be a requirement in some markets.

Itemized 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 fulfill these requirements.

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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Testimonials

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see what our customers are saying

With Tipalti, there are no limitations with scalability—we haven’t had any incremental work going from hundreds to thousands of publishers.

Jason Wechsler

VP Revenue Accounting and Finance Automation, PubMatic

Our payees love Tipalti. They can log in to their portal to see when they’ve been paid. That matters because we’re unique in the language business in that we pay net 30, and it’s important to show our contractors that, yes, you’re getting paid when your job is complete.

Giovanni Donatelli

Founder and CEO, The Language Group

Tipalti has really streamlined our financial process. And when we win, our customers win.

Kurt Donnell

CEO, Freestar

Customer Stories

Explore our customer success stories

Prodege

By leveraging Tipalti’s Mass Payments and AP solutions, Prodege achieved significant improvements in scalability and operational efficiency.

Product

Region

Industry

Size

Create Music Group

Manual international payouts and multi-entity accounts payable processes were time-consuming and complex, delaying artist payments

Product

Accounts Payable

Mass Payments

Region

United States, Global

Industry

Music royalties

Size

100 – 1000

The Language Group

The Language Group cut hours of data entry to keystrokes, reduced payment runs from 4× to 1× monthly, and avoided hiring as contractors grew.

Product

Region

Industry

Size

A.Team

A.Team shifted focus from admin to growth, scaled payments to builders in 40 countries, and streamlined onboarding with built-in tax compliance.

Product

Mass Payments

Region

United States, Global

Industry

Business services

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

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

PubMatic

PubMatic streamlined global mass payments, cut processing time to 3 minutes, and enhanced operations with a robust NetSuite ERP integration.

Product

Accounts Payable

Mass Payments

Procurement

Region

United States, Global

Industry

AdTech

Size

100 – 1000

Warp World

For Warp World, trusting Tipalti for payments automation means it can focus on enabling creators to thrive, without the stress of managing payouts.

Product

Region

Industry

Size

Smartshoot

SmartShoot saved 24 days/year on payouts, eliminated tax penalty risks, and freed finance to focus on strategic growth.

Product

Region

Industry

Size

How It Works

Up and Running in Weeks, Not Months

Collaborative customer support with customized 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

Optimize

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.

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