The National e-Invoicing System (abbreviated as KSeF in Polish) and the structured invoice (e-invoice) – the digital invoicing revolution is around the corner
The National e-Invoicing System (KSeF) is the government’s digital platform for recording, processing and storing information on invoices issued in Poland. The goal is for structured invoices to be issued and received via the IT system proposed by the Ministry of Finance. What are the advantages and risks associated with the Ministry of Finance’s KSeF system?
Developments in digitisation to date
Businesses have been sending certain data in the form of structured files (SAF-T, or JPK in Polish) to the Ministry of Finance in Poland for several years now. Structured files were introduced in 2016 and were used to account for VAT in VATable transactions. In the meantime, they have been replaced with the logical structure for full VAT accounting. In 2018 structured SAF-T files were introduced to let entities report information, such as ledger, warehouse, or sales invoice data, whenever requested by tax authorities.
Another major change in 2018 was the introduction of mandatory structured financial statements. Will another change – the introduction of mandatory structured invoicing – be the next step towards digital revolution, and will it have the desired effect for both businesses and the Ministry of Finance?
According to the plan, most businesses will be required to use KSeF from 1 July 2024. Enterprises classed as exempt entities will have to use KSeF from 1 January 2025.
Currently, implementation work is still ongoing on the Ministry’s website. Throughout the project, the Ministry often consults the public – so as to build a tool with the best possible quality and accessibility.
What are the benefits of invoicing digitisation?
The introduction of the National e-Invoicing System aligns with global trends in the digitisation and automation of business processes. It is a milestone in the Polish financial sector and is expected to bring many benefits to enterprises.
One of the main advantages is the simpler and faster invoicing process.
The idea of replacing paper invoices with a structured version will bring many benefits. Businesses will be able to register invoices electronically, without having to print or save them on servers or exchanging paper or electronic documents with their customers. This will save them time and costs.
The structured invoices will reduce the number of errors in invoicing, and the logical structure validation feature built into the system will reduce the number of invoices containing errors.
The ability to download uniform supplier invoices from a single source and in a harmonised way will certainly improve business processes in Poland. The option of a ten-year electronic archive for recorded invoices will allow many enterprises to avoid storing paper invoices.
The new invoice registration system will also bring many benefits to the tax authorities. The fully automated data recording and analysis process will enable faster and more efficient tax inspections and the detection of potential irregularities. This will have a real impact on the fight against tax fraud and on tightening up the tax system.
Technical aspects
The changes involve not only programming and legislating effort on the part of the Ministry of Finance but also require the obliged enterprises to get ready for registering their invoices in the system. Smaller entities that issue several or a dozen invoices a month will most likely issue them directly in the system.
Businesses that use their own invoicing systems will look for solutions to integrate their sales system with the Ministry’s invoicing system. Of course, this will require appropriate technical adaptations on their part. They will have to ensure sufficient IT infrastructure, data security, system integration, and staff training.
The implementation and later the use of the KSeF system is expected to generate additional costs. Businesses should already start to factor into their budgets the costs associated with purchasing and configuring software, adapting systems and training their staff.
Another important aspect of the planned changes and their impact on business is system accessibility and technical support. During its implementation, the new system may be sometimes inaccessible, have technical errors, or cause difficulties in using the system. It is important to ensure adequate technical support and tools that will help your business if such problems occur. If you are technically unable to register an invoice in the KSeF system, the invoice will not have an assigned reference number in the system and will be considered to have never been issued.
National e-Invoicing System (KSeF) – risks
The introduction of the National e-Invoicing System (KSeF) may raise concerns among enterprises for various reasons, including the security of their business data. They may fear losing their financial and personal data stored in the invoicing system. If the system’s data protection mechanisms are poor, there is a risk of information theft, fraud, or privacy breaches. These concerns may arise from the risk of possible hacking attacks and associated data leaks or inappropriate data management.
Enterprises also fear the technical errors or poorly designed functions. Enterprises, but also their staff who will have to work with the KSeF system in the future, are concerned about faulty data processing or technical problems that could lead to information errors or delays in invoicing. This can in turn lead to problems with the tax authorities and costly corrections. It is important to properly secure the system and minimise these risks by following best practices in information security, regularly updating software, testing the system for vulnerabilities, and ensuring that the infrastructure is properly scalable and efficient.
The implementation of the National e-Invoicing System (KSeF) will cause additional costs for some businesses. Companies will want to adapt their IT systems for integration with the national system, but internal processes will also in many cases need to be adapted to the new reality. Certainly, the new requirements will bring about the need to invest in new or update existing software and IT infrastructure or remodel processes and thus to train staff. Furthermore, uploading invoices to the system can be time-consuming and cause additional workload at least in the initial phase of the implementation.
An important element that involves many risks in the case of technical problems is the business aspect – an invoice that is not registered in the system will not be deemed to have been sent to the business partner and this may undermine the business relationship.
Summary
It seems necessary and reasonable to expect that the team in charge of implementing the National e-Invoicing System (KSeF) will ensure adequate data security, ease of use, and technical support and that they will provide clear guidance and training to help businesses adapt to the new digital reality.
