Reliable audit trails in the age of electronic invoicing: A practical guide
The reform of electronic invoicing is disrupting the habits of accounting departments, including those of social housing organizations. At the heart of this transformation, one concept remains more crucial than ever: the reliable audit trail (PAF). Often perceived as technical or secondary, the PAF is in fact an indispensable ally in ensuring tax compliance and the reliability of invoicing processes. Let's find out why it remains relevant despite the reform and what it actually entails.
Why does the reliable audit trail remain relevant with the reform?
The widespread adoption of electronic invoicing from 2026 onwards could lead one to believe that reliable audit trails will become obsolete. Quite the contrary: PAF remains a legal and practical requirement for all companies, including social landlords, regardless of the format of the invoices. For years, the French tax authorities have required "the authenticity of the origin, integrity of the content, and legibility" of invoices, either through secure processes (EDI (1), electronic signature) or through a reliable audit trail.
Just like EDI and electronic signatures, PAF is therefore one of the three pillars of securing electronic invoices.This measure came into effect in France on January 1, 2014 (update of the BOFiP (2) October 18, 2013).
What are the objectives of a reliable audit trail?
The main objective of PAF is to reconstruct the entire billing process chronologically, from its starting point (such as the purchase order) to the final invoice.
It also ensures that the invoice issued or received accurately reflects the transaction carried out and clarifies the relationship between the invoice and the goods or services provided.
Finally, PAF allows each transaction to be justified by a source document, establishing complete traceability between this document and the invoice, and vice versa.
PAF: compliance and competitive advantages
It is not just a matter of complying with the law: implementing a PAF also has concrete advantages. For social landlords, whose accounting processes involve both rent management (customer invoices) and the payment of numerous suppliers (maintenance, works, co-ownership charges, etc.), the PAF offers a welcome control framework.
PAF: a lever for operational control
It requires each step to be formalized and made reliable, which reduces the risk of errors and fraud. Without a PAF, you are exposed to risks such as VAT deductions being disputed in the event of an audit, duplicate invoices being paid, or inconsistencies in the accounts. No one wants to pay the same invoice twice or laboriously justify where a particular amount came from in the event of a tax audit ! Conversely, a well-designed, reliable audit trail brings peace of mind : you know that each invoice is linked to an actual, duly validated service, and that the audit trail is traceable.
Finally, PAF and electronic invoicing go hand in hand. A reliable audit trail remains relevant because it is a natural extension of digitization. By preparing your organization now to track and control your invoicing flows, you will facilitate the transition to new electronic tools and reap the benefits (time savings, reduced paper consumption, improved traceability, etc.).
It should also be noted that electronic invoicing will become mandatory for all business-to-business transactions in France by 2026. You might as well take advantage of the transition period to strengthen your PAF: you will be 100% compliant and ready when all your invoices switch to electronic format. In short, the reform does not eliminate the reliable audit trail; on the contrary, it puts it in the spotlight by encouraging all organizations—including social landlords—to make their processes more reliable now.
What should a reliable audit trail contain?
In concrete terms, the reliable audit trail takes the form of a set of procedures and evidence that make it possible to reconstruct each transaction from start to finish. The tax authorities define it as the ability to reconstruct " the entire commercial transaction in chronological order, from the purchase order to the invoice ." In practice, this means that for each invoice (whether it is a supplier invoice received or a customer invoice issued), it must be possible to trace it back to its origin (order, contract, quote, etc.), follow all the stages of its processing, and finally archive it.
Here are the key elements that a robust PAF should contain:
✔️ A description of the end-to-end invoicing process : document all stages, from the expenditure commitment or internal order, receipt of the invoice, internal validation, to its accounting entry and archiving; This description includes who does what at each stage. For a social landlord, this may cover the process for a work invoice (from the purchase order to the service provided and then to payment), as well as the issuance of rent receipts.
✔️ The checks carried out at each stage : detail how you guarantee the authenticity of the invoice issuer, the integrity of its content, and its legibility over time. For example, specify that each supplier invoice is reconciled with an order and a corresponding delivery note (systematic matching), and that a consistency check of amounts and VAT is performed before validation. Also indicate what control points exist to detect anomalies (calculation errors, duplicates, unknown suppliers, etc.).
✔️Security and archiving measures: be sure to describe how documents are stored reliably. The goal is to guarantee readability for at least 10 years (legal retention period) and easy access in the event of an audit. This requires electronic archiving in a secure system (evidential EDM, digital safe, etc.).
✔️Tax and VAT compliance : ultimately, your documentation must demonstrate that your organization complies with invoicing and VAT obligations. Each invoice must be linked to an actual delivery of goods or services, which justifies the right to deduct the corresponding VAT.
PAF and social landlords: what specific factors need to be taken into account?
For social landlords, a sensitive issue is VAT on maintenance work: the PAF must prove that the invoices paid for work correspond to work carried out on the property and have been duly validated by technical teams.
In summary, the Reliable Audit Trail consists of internal documentation that compiles procedures, controls, and evidence. This document (or set of documents) must be ready to be presented in the event of a tax audit. It may include diagrams (mapping of the accounting information system, validation flows, etc.), control monitoring tables, and any useful information showing that your invoicing system is under constant control.
👉Note that the format may vary depending on the size of the organization : a small social housing company (ESH) may be able to make do with a summary document, while an agency managing tens of thousands of homes will have a much more detailed PAF. The key is to have a system that is tailored to your business and proves the reliability of your processes to the tax authorities.
Freedz is a platform for digitizing customer and supplier invoices that complies with electronic invoicing reform standards – Compliance with the Reliable Audit Trail – Contact us!
(1) Electronic data interchange enables secure document transmission using software capable of automatically reading and processing invoices.
(2) Official Bulletin of Public Finances-Taxes
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