Addressing major Invoice management challenges in the UAE
Gone are the days when simple invoice management software was all you needed to get your finance department working smoothly.
Today, businesses are looking for software that is functionally capable of handling much more complicated tasks of accounting that far exceeds the purview of invoice management or revenue management for that matter.
So, what is the need for an efficient invoice management solution at all, you may ask?
Maintain financial health
Ensure regulation compliance
With the massive internet penetration and smart phone proliferation, businesses can effortlessly take their trade globally. But with international trade comes the concomitant challenges that need to be addressed to keep cashflow unhindered and revenue growing.
But any business owner who has earned their stripe as an entrepreneur knows that international business is a different ball game altogether.
There are myriad factors that need due consideration to function smoothly. With an alarming rise of cybercrimes and internet fraud, countries globally have become more stringent with regulations. Keeping track of these regulations can be cumbersome and what is worse, punitive measures for non-adherence is quite harsh.
Different regions within a continent have different mandatory rules and keeping track of all the local compliances can be daunting.
For example, VAT, a fairly new concept in the UAE is strictly adhered to, while in KSA, e-invoicing is mandatory with ZATCA compliance, a must-have prerequisite to do business in the kingdom. If CCPA or California Consumer Privacy Act governs American businesses, GDPR mandates regulate the European Union.
This underscores the importance of a universally applicable and regionally compliant e invoicing solution.
In today’s highly globalized and digital world, what every business needs is a solution that is global in its approach, accommodative of changes, and effortless to scale as the business grows and expands.
Sample this, for a business operating in the KSA, an invoicing solution that is not capable of generating e-invoices in the format mandated by the ZATCA regulations (XML format or a PDF/A-3 (with embedded XML) will be useless. Just like an e-invoicing solution that doesn’t support multiple currency or language will be a bane to any business with international customers.
Thus, it is safe to conclude that an invoicing solution must have the functional capability to address the myriad challenges of taking the business across borders.
The objective of such a solution is to offer a seamless experience to all customers and effortlessly align with all regional compliances without jeopardizing organizational goals.
Of course, the core strength of such an advanced and comprehensive solution is its adaptability.
Addressing Major invoice management challenges in the UAE
Most businesses in the UAE face Value added Tax compliance as a major challenge. The best way to address VAT incorporation challenge is by ensuring that powerful accounting software is in place that can automatically calculate VAT and incorporate that into invoices generated. Keeping staff updated on the ever-evolving VAT requirements is also a good idea to keep abreast of all compliances.
The UAE is a country with a very diverse customer segment with more than 85% being expatriates, meaning myriad language and currency preferences. The best solution is to have an invoicing system that supports multiple languages so that invoices can be generated in the language preferred by the customer. This enhances customer satisfaction because better communication always ensures smooth processes.
Cross-border transaction hassles
Cross-border transactions pose umpteen challenges from currency exchange challenges to local tax regulation requirements, payment methods, etc. Using an international payment platform for all cross-border transactions is the way forward.
Delayed & Failed payments
Delayed payments disrupt cash flow profoundly. There is no hard and fast rule to tackle delayed and/or failed payments. But incorporating strict payment policies, keeping clients fully informed of the terms and conditions of payments, wooing customers with discounts or rebates, awarding loyalty points etc. are other effective strategies. Establishing good communication always pays off. Some businesses use penalties but if not used carefully, this approach may backfire. Sharing timely reminders is another way to go.
Data Security & Privacy
Data privacy and security are paramount. Data breaches can be very costly for businesses, both in terms of financial loss and reputational damage. Businesses should not hesitate to invest in secure software that guarantees industry-leading security standards. Regional data protection compliance also helps.
Invoice management can be tricky, not just in the UAE, but anywhere globally. With the right software, navigating the complicated maze of the diverse and dynamic UAE ecosystem can be less challenging. Today, the market is swamped with any number of solution providers, but every business must consider its priorities and invest judiciously in a solution that is best suited and well- aligned to his business goals.