As the Electronic Books Preservation Act (also known as the Electronic Bookkeeping Act) has taken effect in Japan, electronic transactions have become more common, and the handling of transaction-related documents such as invoices is increasingly shifting from traditional paper to electronic data. Among the benefits of electronic invoicing is the convenience it offers compared to paper documents, such as reducing the hassle of mailing or hand-delivering them.

Furthermore, after the increase in postal rates implemented by Japan Post in October 2024, the cost burden of mailing has increased significantly. It’s expected that the number of businesses switching to electronic invoicing will continue to grow as a result.

Before your business makes the move to electronic invoices, it’s important to get the consent of your business partners. This article introduces items you should include and sample text you can use when you create a notice of the move to electronic invoices, along with key points for drafting these notices.

What’s in this article?

• Why a notice about the transition to electronic invoices is necessary
  
• What to include in notices about the transition to electronic invoices
  
• Sample notice about the transition to electronic invoices
  
• Tips on creating a notice about the transition to electronic invoices
  
• Key considerations when adopting electronic invoices
  
• How Stripe Invoicing can help
  

Why a notice about the transition to electronic invoices is necessary

As explained above, using electronic invoices offers benefits such as eliminating the hassle of mailing documents. For example, by using an automated invoice generation tool provided by a payment processor, not only is the use of postal mail unnecessary, but it is also possible to centrally manage everything from document creation to delivery and storage on a single web invoice system.

However, each business handles invoices and receipts differently, which means that some clients might not be ready or able to deal with electronic data yet. If your company moves to electronic invoices without obtaining consent from your business partners, a number of problems could occur. For example, you may send an invoice that your business partners fail to notice for a long time, resulting in delayed payment.

Additionally, if a business partner is not prepared to receive electronic invoices, the sudden move to electronic invoicing could cause confusion and undermine trust. There’s also the possibility that a partner might ask you to keep sending paper invoices as before.

For these reasons, when making the move to electronic invoicing, it’s important to notify your business partners in advance and obtain their consent. When notifying business partners of this change, verbal communication alone might not ensure that all relevant parties receive accurate information. To prevent misunderstandings, preparing a written notice and sending it via email or postal mail is key. For companies you do not regularly communicate with by email, postal mail is the most appropriate method.

What to include in notices about the transition to electronic invoices

• Seasonal greeting: Unlike internal documents, notifications intended for use outside the company should include a seasonal greeting at the beginning to observe proper business etiquette.

• Reason for the switch to electronic invoices: It’s helpful to explain that the adoption of electronic invoices stems from measures to comply with recent social demands by the Japanese government, such as the Qualified Invoice System and the Electronic Bookkeeping Act, as well as from an environmental protection perspective.

• Start date for the use of electronic invoices: Clearly state the specific date when the change to paperless invoices will start.

• Advantages of electronic invoices: The advantages for both the issuer and recipient are listed below.

  • Issuer: Faster invoice creation and distribution
    
  • Recipient: Faster invoice receipt and the ability to view or download at any time
    
  • Both: Reduced paperwork filing, reduced physical storage needs, reduced risk of document loss, etc.
    

• Details about the system: Provide information such as the name of the system your company will use, how to register for it, how to verify electronic data, how to download invoices, etc. If you need to reconfirm the email address of your business partner, include this request in the notice.

• Contact point for inquiries: Provide the contact information for inquiries regarding electronic invoices, including the person in charge, the responsible department, phone number, and email address.

Sample notice about the transition to electronic invoices

Let's use the information above to create sample notices, with one for the issuer and one for the recipient. Please note that “Sincerely” or “Best regards” sign-off text should be placed on the right side of the document, while “Information” should be centered.

How to write the notice as the invoice issuer

How to write the notice as the invoice recipient

Tips on creating a notice about the transition to electronic invoices

Communicate the schedule with ample lead time

You must inform your business partners well in advance about the schedule for transitioning to electronic invoices. This is because your business partners also require time to complete all the necessary tasks, such as system registration and testing. It’s important to be considerate of your business partners and ensure they have enough time to adapt to the electronic invoicing system according to your company's notice. Specifically, aim to send out notice letters two to three months prior to the actual transition.

Be willing to accommodate both electronic and paper formats

If a business partner cannot support electronic invoices, it’s important to be flexible and continue to send paper invoices as before. For example, a business partner may reply that they can only handle documents by postal mail or fax if they:

• Have no internet connection or are in an environment in which electronic devices cannot be used.
  
• Already use their own proprietary format.
  
• Use a processing method that relies on paper invoices.
  

By offering flexible arrangements that accommodate clients who prefer paper invoices, you can maintain their trust while also lowering the barriers to adoption as they gradually transition to electronic invoicing in the future.

Key considerations when adopting electronic invoices

Select a system that complies with legal regulations

When digitizing invoices, the most important factor is ensuring that the entire process, from invoice creation to storage, complies with the Qualified Invoice System and the Electronic Bookkeeping Preservation Act. These legal frameworks establish detailed requirements regarding mandatory invoice content and storage methods. In other words, if invoices do not adhere to these legal systems, both the issuer and the recipient could potentially face tax-related risks.

For example, if an electronically issued invoice does not meet the requirements for a qualified invoice under the Qualified Invoice System, the recipient will be unable to apply the input tax credit for consumption tax. Therefore, when making the transition to electronic invoices, be sure to verify beforehand that the system you’re considering is compliant with the latest legal requirements.

Consider electronic seals

Although affixing a seal to an invoice is not mandatory, it is a common business practice in some companies. In light of this, it might be worth considering the use of electronic seals. Issuing invoices with an electronic seal can provide reassurance to business partners who are accustomed to traditional seals.

As explained above, while there are points to consider when digitizing invoices, such as sending advance notices to business partners, once you've adopted electronic invoicing, you can perform invoicing tasks more efficiently.

Furthermore, as explained in this article, online tools provided by payment processors as part of their services can centralize invoice management, significantly reducing time and effort, thus improving overall business efficiency. For example, a service like Stripe Invoicing, which we’ll discuss next, is compatible with the current invoice system and allows for proper issuance and storage of invoices through its automatic generation function, enabling smoother back-office improvements.

How Stripe Invoicing can help

Stripe Invoicing simplifies your accounts receivable (AR) process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and streamline operations:

• Automate accounts receivable: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you stay on top of your cash flow.
  
• Accelerate cash flow: Reduce days sales outstanding (DSO) and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.
  
• Enhance the customer experience: Deliver a modern payment experience with support for 25+ languages, 135+ currencies, and 100+ payment methods. Invoices are easy to access and pay through a self-serve customer portal.
  
• Reduce back-office workload: Generate invoices in minutes and reduce time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.
  
• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning (ERP) software, helping you keep systems in sync and reduce manual data entry.
  

Learn more about how Stripe can simplify your accounts receivable process, or get started today.