With the rapid advancement of information technology, various business interactions are becoming digitized. As a result, it is becoming increasingly common to issue and store transaction-related documents, such as receipts and invoices, in electronic data format.

Especially in Japan today, where the Electronic Books Preservation Act is in effect, businesses that perform transactions electronically must be mindful; there are rules businesses need to follow, including ensuring that electronic receipts—or e-receipts—are stored in their original data format.

In this article, we’ll go over the basics of electronic receipts, including their benefits, key points Japanese businesses should note about them, and how to issue them.

What’s in this article?

• What are electronic receipts?
  
• How the Electronic Books Preservation Act impacts receipts
  
• The benefits of electronic receipts
  
• Key points to note about electronic receipts
  
• How to issue electronic receipts
  
• How Stripe Invoicing can help
  

What are electronic receipts?

An electronic receipt, as the name suggests, is a receipt that has been converted into electronic data. Just as invoices are going paperless, receipts are increasingly being issued electronically rather than on paper. All receipts exchanged electronically, such as those sent or received via email in PDF format, or those shared and downloaded via the cloud, are classified as electronic receipts.

Keep in mind that the role of receipts doesn’t change whether they are in paper or digital form, so there is no difference in their legal validity. In either format, during tax audits or accounting for expenses, these documents act as proof of receipt or expenditure of funds. Therefore, great care must be taken in their handling. It is important to accurately and clearly state all the necessary information on them (e.g., consumption tax), as well as to properly handle their issuance and retention.

Furthermore, since Japan implemented its Qualified Invoice System in October 2023, it has become very important for businesses to deepen their understanding of transaction-related documents, such as e-invoices and e-receipts. They need to know how to handle these documents to ensure their compliance with the invoice system.

How the Electronic Books Preservation Act impacts receipts

Starting in January 2024, amendments to the Electronic Books Preservation Act mandated that invoices and receipts exchanged in electronic format must be stored in their original electronic form. Care must be taken when handling receipts to adhere to the legal framework of both the invoice system and the Electronic Books Preservation Act, as they are interrelated.

Let’s look at the impact of the Electronic Books Preservation Act on receipts, depending on whether they’re in paper or electronic format.

Paper format

For receipts originally exchanged on paper, businesses are free to choose whether to retain them in paper form or save them as digitized data. In other words, because conversion to electronic format is not mandatory for paper documents, it is okay to keep them in paper form.

On the other hand, if you wish to handle transactions on paper but store them electronically, you can do so using “scanner storage,” which is voluntary under the Electronic Books Preservation Act. Scanner storage allows transaction-related documents in paper format to be scanned and stored as electronic data, so long as they adhere to certain requirements specified by Japan’s National Tax Agency (NTA).

When saving documents through scanner storage, the rules listed below apply. Make sure to review the NTA’s documentation for details on each rule before implementing scanner storage.

• Follow input deadline restrictions.
  
• Make sure you scan above the specified resolution.
  
• Scan in color.
  
• Apply a time stamp.
  
• Implement version management.
  
• Ensure interdependence between scanned documents and accounting books.
  
• Install equipment or devices for reading documents.
  
• Output promptly.
  
• Maintain system overview documents, scanner storage department information, etc.
  
• Ensure search functionality.
  

Electronic format

As mentioned previously, transaction-related documents that have been exchanged electronically must be stored as electronic data. This is mandatory for both the sender and the recipient of the electronic data.

For example, if a PDF receipt is sent via email, it qualifies as an electronic transaction, so both the issuer and recipient must store it as electronic data. Furthermore, as with paper documents, there are requirements for document storage, such as needing to use timestamps.

As electronic transactions become more popular, even businesses that have primarily relied on paper-based documents will find compliance with the Electronic Books Preservation Act increasingly unavoidable. It is therefore key for each business operator to deepen their knowledge and understanding of this law. Additionally, when transitioning to electronic transactions, it is important to create a notification about the digitization of invoices and receipts, informing your business partners in advance of the change and obtaining their consent.

To make the creation and storage of e-receipts and e-invoices smoother, you might want to consider online tools; for example, an automatic calculation feature for consumption tax or an autogeneration tool can make things easier. Before implementing anything, however, you will need to verify whether a tool meets the requirements of the Electronic Books Preservation Act.

The benefits of electronic receipts

There are multiple benefits to using electronic receipts. Here, we’ll look at a few.

They are exempt from stamp duty

If you’ve ever made a large purchase, you might have received a receipt that had a revenue stamp affixed to it. For paper receipts, when the sales amount exceeds 50,000 yen before tax, the NTA mandates that a revenue stamp corresponding to the sales amount be affixed to the receipt and then canceled.

For example, if the amount stated on a receipt is between 50,000 and 1 million yen (excluding tax), a revenue stamp in the amount of 200 yen must be affixed to it. The amount of the revenue stamp required increases as sales revenue rises, reaching a maximum of 2,000 yen. However, revenue stamps are not required for receipts delivered electronically via email or cloud systems. Although it should be noted that they are required if you print a computer-generated receipt on paper and deliver it to your business partner.

They reduce operational workload

The process of manually generating receipts and mailing them is time-consuming and labor-intensive. There is also a risk of errors such as omissions or typos. And, if a receipt needs to be retrieved from storage and verified, you might have to search through vast files in warehouses or cabinets, which can be physically demanding.

Electronic receipts can solve these issues. For example, by generating receipts using an autogeneration tool, accurate information that is managed centrally within the system is automatically reflected on your receipts, preventing errors. Further, when receipts have been digitized, they can be sent quickly via email or cloud services, and storage can be centralized within the same system.

By adopting and using these kinds of online tools, all processes related to receipts can be completed within a single system. This significantly reduces the workload compared to paper-based methods and tends to improve the efficiency of accounting operations. This also works well with remote work or work-from-home situations. As long as you have an internet connection, you should be able to smoothly handle all tasks related to creating, sending, and managing receipts.

They lower other expenses

For paper receipts, there are costs for the paper, envelopes, ink, postage, and the hours of employee labor involved in creating and mailing the receipts. Not only that, but storing receipts in paper form means that you have to secure the files and storage space, which also incurs costs.

In contrast, none of these costs apply to electronic receipts. Thus, switching to e-receipts not only eliminates the previously mentioned stamp duty, but also leads to a reduction in various other expenses. Eliminating the need to store documents in paper form also helps save physical space within an office.

Key points to note about electronic receipts

While electronic receipts offer high convenience, there are several points to note about using them. These points also apply to other transaction-related documents you might create online, such as web invoices.

• Measures must be taken to prevent data tampering: For electronic receipts, antitampering measures must be implemented in accordance with the Electronic Books Preservation Act. These include applying timestamps and introducing systems that retain a history of corrections and deletions. It is also important to establish internal regulations and rules regarding data processing as another preventive measure.

• Relevant devices need to be maintained: If the tax office requests that you present receipts, you must promptly respond to the requests for either data viewing or printed documents. Therefore, even when storing receipts as data, you need to make sure not to neglect the necessary equipment, such as printers and high-resolution display devices.

• You must establish internal systems: Ensure that all employees are informed about the changes made to business processes to prevent confusion, and establish operational manuals covering receipt storage methods and reissuance procedures.

• There are introductory and operating costs to consider: Using an electronic receipt system involves both initial costs and ongoing costs. Therefore, it is important to carefully evaluate the cost-effectiveness of a new system and consider the timing of implementation beforehand.

How to issue electronic receipts

There are two ways to make electronic receipts: using word processing or spreadsheet software, or by implementing a dedicated system.

The first option is easy to start using, but because it relies primarily on manual input, the likelihood of errors, such as typos and omissions, increases significantly. Furthermore, when issuing a large number of receipts, manually sending each one by email and then storing them all takes a significant amount of time and effort.

On the other hand, the second option—implementing a dedicated system—means that receipts are automatically generated by the system, which can prevent human errors caused by manual work. And since the entire workflow, from issuing the receipt to storing it, can be performed within that single system, the operational burden is also reduced. In this way, using a dedicated system streamlines the work related to receipts as well as the entire accounting workflow. This, in turn, contributes to further improvements in back-office operations.

Using electronic receipts requires advance preparation to ensure a smooth transition from paper to digital formats. However, once the changeover is complete, it allows for smooth and efficient operations. So, if you are interested in starting to use e-receipts or you want to optimize your back-office processes as they relate to receipts, you might want to consider a dedicated system.

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.