Responses will be shared with the Expert Group and potentially be placed on the Commission’s website unless explicitly indicated otherwise by the stakeholders in their response.

On 27 January 2009, the E-invoicing Expert Group disclosed its mid term report on e-invoicing harmonisation. The report deals with business requirements, legal and regulatory issues, network aspects, interoperability and standards. All in a compact 37 pages document.

Vision

The E-invoicing Expert Group states that with this they would like to

”set out a vision for the European e-Invoicing environment, in which trading parties can inter-operate in an open ecosystem based on harmonised legal provisions and greater standardisation. The environment should in particular be attractive to small and medium-sized enterprises and offer the market a competitive array of service provider and other solutions. Public administrations should take a lead in helping to create the environment.”

Business requirements

The Expert Group defined the following key business requirements for a widely adoption and use of e-invoicing:

-          a favourable ratio between (initial and recurring) costs and benefits

-          ease of use (and also maintenance and implementation) of e-invoicing solutions

-          a reduction of manual work for the sender and the receiver and automation of the entire supply chain

-          harmonisation, simplification and clarity of legal requirements

-          communicating and sharing best practices

-          creating a competitive market for service providers in all layers

-          ensures trustworthiness and data protection

Legal and regulatory issues

The Expert Group depicts that the current regulatory framework is a barrier to the adoption and use of e-invoicing and the creation of a Single Market integration. The Expert Group proposes equal treatment of both paper based and electronic invoices.

Luckily both the PriceWaterhouseCoopers analysis of the regulatory frame and the proposal of the European Commission to amend the current Invoicing Directive state that that

”to promote e-invoicing this proposal aims to eliminate the barriers to e-invoicing in the VAT Directive by removing the [legal] differences between invoices sent by electronic means and those sent on paper, thereby ensuring the method of transmission is neutral.’”

Also the majority of the Expert Group proposes the CEN/FISCALIS Draft Good Practice Guidelines as an effective means of creating a control mechanism from a VAT control and fraud prevention point of view.

Interestingly enough the PriceWaterhouseCoopers prefers

“an approach similar to the one successfully taken with the Code of Conduct for Transfer Pricing5. We also refer to the Guidance paper on Transaction Information and Record Keeping published by the OECD forum of Tax Administration in May 2004. We would therefore recommend envisaging setting up a mixed working group in which all Member States and a representative number of businesses are represented. The objective would be to develop a common standard set of documentation to be kept by businesses regarding their invoicing and archiving processes, systems and technology. The purpose of the working group is to develop a pragmatic solution and approach for taxpayers to develop such a documentation of their invoicing and archiving processes baring in mind the different electronic invoicing and archiving solutions that could be used by businesses.”

Additionally the proposal states that prior acceptance before sending an e-invoice is being abolished as is the list of technologies that can be used for e-invoicing. Even the right for Member Countries to set specific requirements will be abolished.

Network effects – denying the BSP’s achievements

The E-invoicing Expert Group also states that to achieve network effects encouragement should be given to the development of a network model which creates interoperability, a choice of services, and wide reach. The E-invoicing Expert Group then states:

”Today’s service providers often operate in ‘silos’ or so-called three-corner models, although various connectivity initiatives are being pursued and some four-corner models exist. But more is required, as without a more interoperable environment SMEs will have to make an exponentially growing number of connections to their trading partners; this is unsustainable.”

Now, this is quite interesting. First of all because at this point the consolidators have created the current achievement in e-invoicing. This can not easily be dismissed. But then again, it is easier to set something apart from the other when the other has already realised achievements. From that point of view the statements in the interim report can be interpreted as a compliment.

From that perspective the phrase “although [..] some four-corner models exist” could be interpreted in such a way that the four corner (banking) model could be better suited for mass adoption across Europe than the BSP’s consolidator model. But then again what proof is there for this statement at a European level at this very moment? Even compared to the achievements by the BSP’s?

So what will the EEI Framework be like?
The Expert Group made the following recommendations for the content of the European

e-Invoicing Framework are proposed:

-          The Framework will primarily be a set of actionable recommendations and proposals, for which the support of others will be sought.

-          It will be organised as a series of five layers or pillars that need to be addressed and which all
interrelate on a coherent basis.

-          It will not itself be a Scheme or contractual framework for others to formally adhere to

-          It will include the elements identified and set out below:

- Definition and scope of the e-Invoicing Framework
- An overall conceptual structure or vision
- Business requirements for all market segments
- Standards recommendation
- The (even better: a) proposed network model, including the proposal for a framework for
interoperability.
- Legal and regulatory proposals
- Recommendations for a communications plan.
- Set out a Road-map for implementation
- Glossary of terms
- Others to be defined

In the eye of the beholder it has quite some similarities with way the (mobile) telecommunications sector was liberalised. For more detailed information, look at the report below.

Communicating e-invoicing

Most of the things said above were based on the executive summary of the interim report. But that does not necessarily mean that this executive contains all the essential aspects of the report.

A closer look a t the report at page 30 a communications ‘annex’ is presented. Whereas phrasing on the E-invoicing Framework is quite liberal and wide, this annex is firm and almost imperative! For instance:

”Indeed it can be argued that one of the most important – if not the main – factors currently holding back the development of e-Invoicing is a lack of awareness, communication and dissemination of convincing information to market participants, so as to create the level of confidence required to go ahead and implement”

And

”Thus there is an evident need for a major effort in making clear to potential users, service providers, regulatory bodies, government agencies and other stakeholders what (and often how

surprisingly little) needs to be done and what (and often how surprisingly large) the gains will be.”

And also

“Communication initiatives should not be a one-off exercises but should be part of a regular plan and process to communicate regularly, both periodically (e.g. quarterly newsletter) and event driven (e.g. when a new report is published, when major administrations commit to e-Invoicing, upon significant success stories from industry etc.).”

Why this is neither part of the core of the interim report nor in the executive remains a mystery. But what is clear is that communication is of the essence.

The EEI Platform is very much willing to support this recommendation of all recommendations with:

- a comprehensive activity plan
- social networks
- weblog
- forum
- innovation guideline
- interaction framework
- a common body of definitions.

Read the Mid-Term Report below:

This article is from E-invoicing Platform. Read the original post at: A look at the Mid-Term Report of the E-Invoicing Expert Group.