What is an e-document?

Unlike PDFs that are designed for human eyes, true e-documents consist of structured code, such as XML, that computers can automatically process and interpret. They begin as data in one system and appear as properly formatted information in another, without manual handling. 

The primary benefit of e-documents is that you rarely need to interact with them directly. Your business systems handle the information processing behind the scenes, and it’s your systems that then present the content to you.

The shift toward e-documents isn't just another tech trend — it's the natural evolution of how we work in an increasingly digital world. As software and SaaS solutions become the backbone of modern business operations, our daily workflows have transformed dramatically, creating efficiencies that weren't possible even a decade ago. 

Despite these advances, most organizations are still grappling with a frustrating bottleneck: document processing. While we collaborate with our teams in sophisticated digital environments, critical business documents passing between organization often remain trapped in paper mail or as email attachments, creating a jarring disconnect in otherwise streamlined processes. 

This bottleneck becomes more glaring each year. While AI has emerged as a helpful assistant, extracting data from traditional documents with impressive accuracy, AI-assisted document processing is ultimately a sophisticated workaround — not a solution to the core problem. 

The real next step forward? Widespread adoption of standardized e-documents across entire supply chains. When business documents are born digital — structured with embedded data rather than just digitized images of paper — they become true participants in our digital ecosystems, which enable the following benefits for businesses:  

To illustrate how these e-documents function in creating more efficient supply chain interactions, let’s have a closer look at the first two. 

E-purchase order in action 

Purchase orders have a straightforward, but important job. They clearly spell out exactly what a company wants from a supplier. This clarity protects both sides. The buyer knows exactly what they’re getting and when, while the seller has clear instructions and authorization to provide those goods and services. 

For example, when a manufacturing company orders raw materials through e-purchase order system, the document automatically receives a unique identifier and digital timestamp. Every action – from creation to approval to submission – is recorded through an audit trail showing exactly who took what action and when. If the supplier needs to make a substitution or the buyer needs to modify quantities, these changes are documented with electronic approvals, preventing later disputes. 

This digital trail also connects seamlessly to other documents, invoices and payment records in the supply chain – creating end-to-end visibility that would have been impossible with paper systems. This allows both procurement teams and finance departments to instantly verify order details when questions arise. The result? Better spend control, reduced maverick buying, improved supplier relationships and more efficient procurement operations. 

E-invoice in action 

E-invoices are the linchpin of streamlined financial processes. Unlike their PDF or paper counterparts, e-invoices move directly from the seller’s system to the buyer’s system without requiring manual intervention. Let’s look at an example.  

After a retail chains receives a shipment, an e-invoice with a unique digital identifier flows directly into their financial system. This automatically links to purchase orders and receiving documents. The system validates invoices against predefined business rules in seconds, checking quantities, prices and tax calculations. If any discrepancies arise, the system automatically approves the accurate portion while flagging the exception for human review. 

Governments worldwide were early adopters of e-documents and are increasingly the foremost champions of their use, and for good reason.  

Governments handle enormous procurement operations using taxpayer money. E-documents create an unalterable trail that ensures public funds are used responsibly. When everything is tracked digitally, it's much harder for questionable transactions to slip through the cracks, creating fairness in processes that might otherwise be vulnerable to manipulation.  

Unlike paper documents that can be altered, forged, or "conveniently" lost, e-documents maintain their integrity. Not only does this set the guardrails for ethical conduct, it also elevates the cybersecurity of government operations. The tamper-proof quality of e-documents is particularly valuable when handling classified information or financial transactions where security breaches could have serious consequences.  

Governments are also key in making e-documents the norm at large in two important ways. Firstly, they have been proactive in establishing the frameworks and standards that make the circulation of e-documents easier, both domestically and across borders. Take Peppol, for example. What started as the Pan-European Public Procurement Online project has evolved into a comprehensive interoperability structure now embraced by the private sector and adopted by national governments far beyond Europe.  

Secondly, governments are able to spur mass action by making the use of e-documents mandatory. The EU's VAT in the Digital Age (ViDA) initiative demonstrates this perfectly. It creates a two-track approach to e-invoicing adoption: Member States can now mandate e-invoicing for domestic transactions without seeking EU permission — accelerating implementation timelines — while all intra-community transactions must use e-invoicing and digital reporting by 2030. These measures address the historically sluggish adoption of e-documents while simultaneously tackling tax evasion and fraud. 

This move is expected to significantly reduce the VAT gap. But there's more to it than tax collection. This digital transformation creates a more efficient economic ecosystem where transactions happen faster and with fewer errors, boosting productivity throughout the EU. With all VAT-related activities moving to e-documents, governments gain access to real-time, analyzable data that provides unprecedented insights into economic trends and activities. This creates a powerful tool for informed policy-making.  

In essence, e-documents aren't just a technological upgrade for governments. They're a fundamental shift toward more transparent, secure and efficient governance, connecting citizens, businesses and public institutions in ways that paper never could. 

Interoperability—the ability of different systems to work together seamlessly—creates an ecosystem where e-documents flow freely between organizations. This solves a critical paradox: how to keep our systems secure from threats while remaining open to receive essential information from trusted external sources. With true interoperability, businesses can maintain robust security while enabling the smooth exchange of e-documents across organizational boundaries. 

The future of e-documents will be defined by their participation in interconnected business networks. Organizations that embrace comprehensive interoperability across technical, semantic and operational dimensions will transform document exchange from a clerical function into a strategic asset.  

This transition requires moving beyond isolated document automation toward fully integrated information systems where data flows naturally between business partners, regulatory bodies and financial institutions.  

In this connected future, documents become dynamic information assets that drive business intelligence rather than static records of completed transactions. 

This text was originally published 23 September 2020 and last updated 16 May 2025.