Hungarian SMEs ready for online invoicing?

2018. 03. 19.

Micro-, small and medium-sized enterprises are increasingly open to digital invoicing solutions: almost 10% of these businesses already use online invoicing programs. It’s high time to rethink companies’ invoicing processes because the tax authority (NTCA) will introduce an online reporting obligation on 1 July 2018. eNET Internet Research and the online invoicing service were the first to research this issue among Hungarian micro-, small and medium-sized enterprises.A representative survey conducted by eNET and the online invoicing service among micro-, small and medium-sized businesses in December 2017 indicates that this sector, too, has waken up to the option of digital invoicing solutions.

Most companies of the examined size (i.e. businesses employing less than 250 workers) do not issue invoices every day. One in three such firms write up to 50 invoices a year. While paper-based invoices still dominate this segment, the positions of manual invoicing seem to crumble as more and more companies use various invoicing programs. Their share in the category of sub-250-person firms is about 50%.As to the types of the invoicing programs used, locally installed software is currently the most popular, with 40% of the sector using it. However, partly due to Hungarian products, cloud-based online invoicing solutions are also available. These allow users to access the system and their data anywhere and anytime. The new technology is spreading fast: 8% of micro-, small and medium-sized businesses currently take advantage of online invoicing. These solutions have usually been applied for 2-3 years.

Online invoicing glossary

Invoicing program: either installed or online (cloud-based) digital invoicing software.

Online invoicing: a cloud-based solution usually consisting of basic and extended services, allowing for the issuance of both paper-based and electronic invoices.

Electronic invoice: an invoice issued and accepted in an electronic format. It must meet three basic conditions: authentic origin, data integrity, and readability. Such an invoice constitutes an official document only in its electronic format.

Paper-based invoice: an invoice issued with an invoicing program, which constitutes an official document only in its printed format.

Compulsory online invoicing/reporting: from 1 July 2018, the tax authority will require the reporting of each invoice between domestic tax subjects which contains at least HUF 100,000 of VAT. The invoice data must be reported electronically.The challenge of online reporting – 1 July 2018 is approaching

To businesses, invoicing is just like air: it surrounds us all the time, and it’s taken for granted. But any problem about it may cause serious trouble. Invoicing is not only a matter of quantity, the solution chosen, or the number of invoices to be issued. It’s also important to meet all relevant legal requirements.According to the survey, 79% of companies employing fewer than 250 persons are aware of the obligation of online reporting to the tax authority from 1 July (with certain conditions). The need to comply with the new requirement may cause some concern among companies. Any online invoicing program chosen should be fully compliant with the tax authority’s requirements. Several solutions are available for fast, simple, transparent invoicing, but there are differences in terms of user-friendliness, features, as well as service packages and pricing. Most online invoicing solutions offer a basic package free of charge, with extended features for an additional price.

Benefits of online invoicing programs

  • invoices easy to issue
  • manageable records
  • paper-based invoices (free of charge)
  • legal compliance
  • support for online reporting to the tax authority
  • electronic invoice issuance option
  • automatic invoice issuance option
  • webshop integration
  • can be shared with accountants

Source: joint research by eNET and focused on micro- small and mid-sized enterprisesThe cloud-based service of is one of the best-known invoicing programs: research by eNET indicates that the product is known by half of the interviewed company officials in the examined size category, and that is one of the most widely used invoicing solutions in Hungary.“The online invoicing to be introduced by the tax authority (NTCA) in July 2018 may seem like a bitter pill to many Hungarian businesses. But the issue can be easily resolved with an online invoicing solution that meets the tax authority’s requirements. In fact, this can be regarded as a step towards becoming a digitally mature, successful company. Note that it’s the invoice issuer who will be sanctioned for any failure to send the online reports to the tax authority, and all technical and operative tasks will have to be carried out by the invoicing software. The good news is that a compliant online solution is already available” said László Stygár, co-founder, owner and service development manager of invoicing is not a matter of company size

Interviews with company managers indicate that an invoicing program makes life easier for both small and large businesses. An online solution is very helpful even if a company issues just a few invoices a year, because auto-completion of the partner’s name, address, tax number etc. speeds up the process and greatly reduces the chance of errors. And companies issuing many invoices can take advantage of features such as bulk invoice generation, automatic collection (synchronising invoices and payments onto the firm’s account), or integration with other systems of the company. So whether it’s worthwhile for a business to introduce online invoicing does not depend on the number of invoices issued.

So what is the decisive factor? The target group for online invoicing includes the following market players according to the research:

  • innovative businesses who are open to online operations;
  • those who are interested in digital solutions that make the invoicing process faster and simpler;
  • all ventures intending to simplify the invoicing process and use the time and energy gained for business development;
  • companies that issue many invoices but don’t want to hire additional staff for that purpose (typical example: webshops);
  • accountants, who can use the time freed up by simplified invoicing on high-quality consultancy work;
  • those who consider transparency within and outside the company important.

Electronic invoicing is the future

Online invoicing programs are suitable to issue both paper-based and electronic invoices. The latter are still relatively new in Hungary, used by almost 12% of micro-, small and medium-sized businesses according to eNET’s research. Within this group, 4% of the total use no other invoicing method. The upcoming obligation of online reporting to the tax authority will probably increase the share of electronic invoicing.

Thus online invoicing is spreading fast, and the ratio of electronic invoices is also growing. Hungarians are increasingly adept at online shopping, and they now consider it normal to receive electronic invoices as customers.

In addition, more and more small company managers are contemplating switching to a simple and transparent invoicing program that meets the tax authority’s requirements and is (almost) free of charge, provided that only the basic functions are used.

eNET Internet Research

About the survey: eNET interviewed 200 micro-, small and medium-sized enterprises by phone between 6 and 13 December 2017. The results are representative of the views of Hungarian micro-, small and medium-sized businesses in terms of company size and region. In addition, deep interviews were conducted in order to gather more comprehensive information.

The research was performed in cooperation with