CEN/ISSS invites everyone to attend the 4th CEN Industry Conference on Electronic Invoicing and Compliance. The conference takes place in the Diamant Building in Brussels on June 18th 2009.
After the completion of the CEN/ISSS eInvoicing Phase I Workshop in 2006, a Phase II workshop was launched in 2007. Now, during the Open Meeting on June 18th 2009, the final deliverables of this Phase II will be presented to reach out for public comments and reviews.
CEN/ISSS e-Invoicing Phase II: five Working Groups
Five projects have gone under way, with Working Groups:
1. An adoption programme for increased electronic invoicing in European business processes
2. Compliance of electronic invoice implementations with Council Directive 2001/115/EC and the national legislation as regards electronic invoices;
3. Cost effective authenticity and integrity of electronic invoices and related business documents regardless of formats and technologies;
4. Implementation of compliant electronic invoice systems in using emerging technologies and business processes;
5. A framework for the emerging network infrastructure of ‘invoice operators’ throughout Europe.
Resulting in several deliverables, the Working Groups and the entire CEN e-Invoicing Workshop aim to stimulate further standardisation in the domain of electronic invoicing in Europe. It should be noted that the activities are explicitly not directed towards standardisation of a document format such as UN/CEFACT or UBL.
What kind of deliverables can we expect?
So what kind of results can we expect at the Open Meeting on June 18th 2009? To get answer on that question we could take a look at the presentations performed during the Open Meeting in 2008.
In short – to be honest: as far as the EEI Platform can see- it is expected that at least the following deliverables will be presented:
– The Draft Good Practice Guidelines (Working group 2 and 3)
– E-invoice Gateway (Working group 1)
– Review of CWA 15576 (Working group 4)
– Review CWA 15582 (Working group 4)
NOTE: The EEI Platform has been chair of Working group 4 for some time. It resigned from this position due to a conflict of co-operation with one of the Workshop chairs and a difference of vision with regard to the expected deliverables and their content. The EEI Platform proposed to deliver:
– A Common Body of Definitions
– An Interaction Framework
– An E-invoicing Innovation Guideline
Progress put into perspective
So what progress has been achieved during the last twelve months? The only way to find out is to go the CEN/ISSS e-Invoice Open Conference. But not before you had a chance to look the presentations from 2008. That way you could put the new information en statements into perspective:
2008 – Working Group 1
Raising awareness of electronic invoices
2008 – Working Group 2
Overview on compliance of electronic invoices
2008 – Working Group 2:
Compliance of electronic invoices
2008 – Working Group 2:
Legal and regulatory inhibitors
2008 – Working Group 3:
Cost effective means to guarantee authenticity & integrity
2008 – Working Group 4:
Emerging technologies and business processes
2008 – Working Group 5:
Interconnection of service providers
With the final deliverables, the CEN e-Invoicing Workshop has stimulated further standardization work in the domain of electronic invoices in Europe, with a view to supporting:
– the compliance of electronic invoice implementations to Council Directive 2001/115/EC and the national legislation as regards electronic invoices;
– the effective implementation of compliant electronic invoice systems in using emerging technologies and business processes, in business-to-business as well as in business-to-government scenarios; and
– the emerging network infrastructure of invoice operators throughout Europe.
The eInvoicing Workshop Phase II is mandated by the European Commission to provide advice on the European electronic invoice implementation process. With more than 60 companies actively participating, the Workshop has become the sounding board of the electronic invoice industry – comprising software companies, service providers, end-users as well as tax authorities (e.g. Spain, NL, UK, Italy, Romania).
CEN/ISSS conference “Electronic Invoices & Compliance”
JUNE 18th, 2009 10:00 – 17:00 CET
DIAMANT BUILDING
Boulevard Reyers 80, 1030 BRUSSELS, Belgium
The Open Conference is free of charge !
For participation, please register before 10 June at: http://www.cen.eu/isss/meetings
If you have any question about the registration, please contact:
Emmanuelle Ramaz, Workshop Assistant CEN,
Innovation & Business Development Department
e-mail: [email protected]
Tel + 32 2 550 08 13
Agenda
09:30 Arrival and registration
10:00 Welcome and introduction CEN Secretary General Stefan Engel-Flechsig & Anders Grangard (CEN/ISSS Workshop Co-Chairs),
10:15 Perspectives on e-Business (Welcome note by the European Commission, DG Enterprise)
10.30 Summary of the Phase II results: Stefan Engel-Flechsig
11.00 WG2: Overview on compliance of electronic invoices – Joost Kuipers
11.15 WG2: CEN Compliance Guidelines – Christiaan van der Valk
11.45 WG2: Legal and regulatory inhibitors – Tony Nisbett
12:15 Lunch break
13:15 WG : Cost effective means to guarantee authenticity & integrity – Johan Borendal & Nick Pope
14:00 WG 4: Emerging technologies and business processes – Anders Grangard & Adrian Mueller
14:45 WG 5: Interconnection of service providers – Ahti Allikas & Jari Salo
15.30 Coffee & tea
16.00 WG 1: Raising awareness of electronic invoices – Georg Lindsberger & Helmut Aschbacher
16:30 Final discussions and recommendations from the audience
17:00 Wrap-up, close of meeting & networking
For participation please register before 10 June at: http://www.cen.eu/isss/meetings
Via this website, consumers and businesses receive information about the benefits of sending bills digitally. Moreover, customers of ABN AMRO, ING and Rabobank ViaMijnBank are able to receive their invoices online, and pay online through their own secured banking environment.
In his speech at the launch of the website, Heemskerk pointed out the benefits of sending invoices digitally. Together with Marco Pastors (the government’s ambassador for e-invoicing ) Heemskerk aims for the government to receive and process 10 percent of all invoices electronically in 2010. “This will save businesses and tax payers a lot of money. Soon we will make these arrangements official by signing an agreement with national union VNO-NCW, MKB (SME) Nederland and the main government parties that send a lot of invoices,” the Secretary announced.
Besides the importance of e-invoicing, Heemskerk stressed the importance of innovation in services in general. “With this kind of initiatives, the banks show that they play a leading role when it comes to the use of ICT.” In other parts of the national services there is much profit to make. In general, productivity in the Dutch services is growing slowly. This has a negative effect on the competitiveness of this sector, particularly concerning the current crisis. A closer look is currently taken at this situation to unveil the cause of this backlog. The Ministry of Economic Affairs also helps sectors to digitize their activities by implementing the program ‘The Netherlands Connected Digitally’ (www.ndiv.nl).
Basware, the leading provider of purchase to pay solutions, today announced the launch of Basware Connectivity ( http://www.basware.com/our_solutions/supplier_connectivity/Pages/default.aspx ), a new set of enabling services to increase the adoption of electronic document exchange in difficult economic times for businesses. Basware Connectivity services allow suppliers and buyers of all sizes and maturity to transact electronically across the Basware partner network to drive down processing costs and increase internal visibility between procurement and finance. With the Basware services, transaction and processing costs can be cut by half.
Basware Connectivity services include Basware Scan and Capture, a completely outsourced scanning service that reduces the manual burden on internal departments and enables buyers to receive all their invoices in electronic format. To encourage suppliers to start sending invoices electronically, Basware offers the buyers an outsourced supplier activation service.
Basware Business Transactions, a monitored transfer and conversion service, supports the integrated exchange of e-invoices and purchase messages, enabling faster processing and improving accuracy.
Basware Supplier Portal completes the services, allowing buyers and suppliers to upload or download purchasing related documents and complete transactions, such as submitting an invoice, online.
The new services complete Basware’s existing purchase to pay offering, allowing customers to further enhance process automation by including their business partners as part of their accounts receivable, accounts payable and procurement functions. With the Basware Connectivity services, companies gain visibility to an audit trail that can be traced from order to goods delivery and invoice. The services generate savings in time and resources, by increasing accuracy in order based deliveries as well as data quality of invoices. Thanks to reduced invoice processing times, buyers are able to negotiate cash discounts, prevent late payment fees and improve working capital management. In turn, suppliers are able to secure invoice delivery via the Basware Business Transactions platform and gain competitive advantage by offering an environmentally friendly and accurate way of invoicing, as well as providing more timely and efficient customer service.
According to Forrester Research reports by Duncan Jones, the clear, demonstrable benefits, such as operational savings and error reduction, and the large, available market for automation of purchase to pay processes continue to drive market growth, particularly with the prevailing economic pressures on businesses and their supply chains. Companies see their current inefficient, error-prone invoice-to-pay (I2P) processes as an opportunity for rapid savings through judicious use of technology, but are unsure where to start. Best practice research from Forrester highlights that embarking on this journey, it is important to work with cross-functional stakeholders within the company, strive for 100% straight through processing, as well as looking to maximize supplier participation.
Basware Connectivity services are offered without any need to implement or maintain the solution in a customer’s IT environment. This reduces claims on internal IT resources, lowers the total cost of ownership and above all, lets organizations start communicating electronically with their business partners quickly, regardless of their size or current purchase to pay processes.
“With our Basware Connectivity services, we are the first to able to deliver all purchase to pay related documents through one solution. We are making this far simpler for our customers by managing the process for them both internally and externally,” said Esa Tihila, SVP, Basware Global Operations. “By offering different services for companies at different stages in their purchase to pay journey, we will accelerate the process of enabling more transactions to take place globally.”
Over 3,500 organizations are currently integrated to the Basware Business Transactions platform through the Basware Connectivity services. Basware has over 150,000 suppliers transacting electronically through its platform and processes over 8 million invoices across its network annually. With the launch of Basware Connectivity services, the goal is to increase this exponentially and allow more suppliers and buyers to build better transactional relationships both at home and overseas.
“We decided to make a strategic move to e-invoicing already in 2002. Our goal is to expand e-invoicing as much as possible, both in Accounts Receivable and Accounts Payable processes,” says Kari Littunen, President, Shared Services at Metso, an early Basware Connectivity customer. “Our strategy is to have one technical partner, which enables a controlled way of exchanging messages and information. With Basware Connectivity services we are able to reach all our business partners through one single solution.”
E-invoicing has not taken off as fast as its proponents might have hoped, but the economic climate might give their efforts new impetus.
The European Commission estimates that the potential cost savings of e-invoicing in the business-to-business sector will be €238 billion. The European Association for Corporate Treasurers puts the figure at €243 billion. According to Swiss-based consultancy Billentis, the unit costs of issuing paper-based invoices during the past year were in the range of ?8-18 (of which 40-50% could be saved by e-invoicing) and the unit costs of processing incoming paper-based invoices were in the range €11-32 (of which 60-90% could be saved). Given the current economic climate, such savings represent a very attractive proposition for corporates.
E-invoicing is also an attractive proposition for financial institutions, which have suffered huge losses and are focusing on transaction banking as a generator of fee income. The problem is that the area is bedevilled with challenges, including a lack of standards, a lack of definitions – and a lack of interest in some quarters.
The concept of e-invoicing has been around for many years. It aims to replace paper bills with electronic ones. Corporates can view invoices online, through a banking portal or other service and authorise them for payment. They can download invoices from the portal and automatically import them to their accounts payable or accounts receivable applications and archive them electronically to comply with statutory requirements.
What’s new about e-invoicing is that it is being linked with the single euro payments area. Because SEPA will standardise and harmonise payments processing across borders, it will significantly reduce the complexity of implementing e-invoicing solutions, according to SEPA: potential benefits at stake, a report by Capgemini commissioned by the European Commission and published on the day SEPA came into effect in January 2008. Solutions will be more easily integrated into the back offices of sellers and buyers and because both sides of a transaction are using the same standards for payments processing, the challenges of compatibility between supplier and buyer will be greatly reduced. Moreover, “… the [Payment Services Directive] harmonises regulation and legislation, which lowers the barrier that regulation and legislation represent, though certain related barriers still remain (for example taxation)”, says the report.
Taxation is indeed a sticking point and is one that the EC is currently trying to fix. The EC’s VAT Directive has made matters worse, says Ifor Williams, sales director at Accountis, a developer of electronic invoicing, payment and document exchange services. Unsurprisingly for a European initiative, each country has chosen to interpret the Directive in its own way, leading to differences in tax treatment and invoicing standards. “The European Commission is aware of the problems with the VAT Directive and is working on revisions. Any revised directive shouldn’t differentiate in its treatment of paper and electronic invoices,” says Williams.
Antonella Vanara, payment systems marketing manager at Italian payments processor SIA-SSB, says pan-European interoperability of e-invoicing will require equal VAT treatment. “There are also obstacles to interoperability in the area of electronic signature standards. These standards are very complex and numerous – every country has its own. For example, in Italy, the digital signature must be issued by a qualified company that is accredited in Italy.”
According to a report from the Politecnico di Milano, basic standalone e-invoicing services are used by less than 1 company in 10 in Italy and the more integrated solutions are used by less than 1 in 30 companies.
As reported in Banking Technology’s Sibos Daily News in September 2008, Dutch/German payments processor Equens has teamed up with Italy’s ICBPI and Belgium’s Isabel in a joint electronic invoicing pilot that aims to establish an open, multiparty, cross-border e-invoicing network. Dave Rietveld, general manager for new business services at Equens, said it would take “a couple of years” before a European e-invoicing standard came into force and until that time local standards are well established and should be exploited. “It is too expensive for companies to invest in new standards, so our product bridges the current local standards, giving customers greater European reach.”
At present, pan-European e-invoicing is a concept, rather than a reality. However, advances have been made in national schemes, many of which could provide the basis of pan-European schemes once the interoperability problem has been ironed out. Public authorities are playing a role here, with the governments of Denmark, Italy, Spain and Finland mandating the use of e-invoices for business-to-government transactions. Says Vanara: “Some of the final features of the business to government sector have to be addressed, but once they have, this will be a real driver for e-invoicing in Italy, where current use is quite low.”
The Spanish government has driven the development of a legal framework for e-invoicing, a technical format and a website to help SMEs. SMEs are also able to obtain free software, attend events and get support, which totalled ?10 million in 2007 and ?43 million in 2008. By August 2009, all invoices sent to public administration bodies in Spain must be electronic.
In Finland, around 30% incoming and 40% of outgoing invoices are electronic. Unlike some other countries, Finland had not found the need for legislation to make this happen, Jere Reinikainen, a project manager at the State Treasury in Finland told the EXPP Summit in Frankfurt last September. Reinikainen said e-invoicing was considered a gateway product into e-government and e-business in general.
Bo Harald, chairman of the European Commission’s Expert Group on e-invoicing, says e-invoicing in Europe will be driven by the public sector because government authorities are the largest senders and receivers of invoices. “The Expert Group is very proud of the countries that have made a move to e-invoicing, but is also disappointed that more countries have not made such a commitment,” he says.
The Expert Group has been charged with developing a set of high level business requirements, which will cover the needs of all users and market participants; proposals to simplify the legal and regulatory framework for e-invoicing; and a vision for how the market could respond to user needs through network solutions supported by standards.
Nordic countries are quite advanced in their use of e-invoicing, says Gareth Lodge, a research director at financial industry analysts TowerGroup. “One of the reasons there are such high levels of EBPP and EIPP in the region is linked back to a banking crisis in the region about 12 years ago,” he says. “Banks had to shut hundreds of branches and one third of the industry’s workforce was laid off. But the banks still had to service customers, so they looked for other channels and this increased the reliance on electronic service delivery, which led to adoption of e-invoicing.”
Banks in the rest of Europe should take hold of the opportunities that will arise from the public sector, he says. “Most public authorities are required to deliver the best value to their clients, but the levels of investment to do this tends to be relatively low. They will be looking for a third party or a bank to help them introduce e-invoicing, so the question is, who will provide the best value in doing that?”
Accountis’ Williams says there is a good case for the banking network to be used for e-invoicing: “Invoices and purchase orders are just extra items in a business transaction that leads up to a payment being transacted. Banks are very good at handling payments, so the banking network should be used. E-invoicing is a very big opportunity for banks to gain extra transactional revenue that they don’t currently get.”
In June last year, The Royal Bank of Scotland announced it had signed a multi-year contract for Accountis’ electronic invoice presentment and payment technology, which it will use to provide VAT compliant e-invoicing services to corporate customers in the UK. The application provides detailed status information – such as proof of delivery, acceptance, query and approval status – for all documents involved in a business transaction, from purchase order to invoices. The service also provides real time dispute management.
Ian Watkinson, head of product innovation at RBS GTS UK, describes the services as a cheaper, faster and better way of processing invoices in a secure and VAT compliant manner. Among the first users of the service are local authorities, which says Watkinson, are aware that e-invoicing is an opportunity to deliver best practice and better value to tax payers. “E-invoicing helps local authorities to be more efficient and pay suppliers on time, which is a measure of how effective they are as organisations.”
Watkinson points up that in providing e-invoicing services, the bar should not be set “too high” for SMEs. Local authorities, for example, have a large and varied supplier base and therefore services should not be prohibitive for smaller, local suppliers he says, “In an accounts payable e-invoicing scenario, we don’t charge suppliers to register or connect to the service and we offer a range of connection options. If an SME can only print invoices, we have an option where we can capture the invoice print file before the document is printed, digitally sign the invoice and send it securely to the council. At the high end, large multinationals tend to generate their own format of data files reports out of their billing systems and they can securely connect their systems direct using the same service.”While e-invoicing has not developed as quickly as its proponents would want, there could be a silver lining to the cloud that is the global economic downturn. Says Watkinson: “Working capital management is very close to the hearts of suppliers today. E-invoicing services will help to improve how suppliers manage their days sales outstanding by providing them with the option to easily offer discounts on earlier payment terms. The service thereby facilitates the management of working capital, which is very important in this economic climate.”
Author: Heather McKenzie
Source: Bankingtech.com
To achieve basic standards of clarity and certainty in a taxation system, the incidence of taxation must be well defined. The tracking of indirect taxes such as VAT relies on invoices as the primary evidence of a commercial transaction.
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When business evolves by means of advance technologies, documentary evidence such as invoices must match these advances. The European Union has recognized the importance of e-invoicing for e-commerce. Various EU standards have contributed to the evolution of e-invoicing..
These include the European Commission Recommendation 1994/820/EC, the European Directive 1999/93/EC and the European Directive 2001/115/EC. These standards have served the dual purposes of facilitating VAT administration on the one hand and fostering e-commerce on the other.
What Is The Importance Of E-Invoicing VAT Transactions In E-Commerce?
The invoice of a commercial transaction is one of the most important documents in any business. The invoice must conform to accounting, tax, business and even linguistic rules. Guidelines governing indirect taxes such as VAT that are levied on the basis of a commercial transaction specifically provide rules for authenticity of origin of an invoice as well as the integrity of its content. The invoice is also necessary in order for the recipient to claim a VAT refund. With the transformation of conventional business into e-business, all member states have individually tried to regulate the complex legal issue of invoicing. These disparate efforts resulted in a disruption of the smooth functioning of the Internal Market.
The Commission launched a multi-annual project “Simpler Legislation for the Internal Market” (SLIM) in 1996 to streamline key Internal Market Legislation. The Commission’s report on the SLIM initiative was approved by the Internal Market Council on November 27, 1997. This report includes a commitment to study “the details considered necessary for drawing up an invoice for VAT purposes and the legal and technical requirements for electronic invoicing”.CEN, the European Committee for Standardization or Comité Européen de Normalisation, was founded in 1961 with twenty nine national members to develop voluntary European standards and to foster the European economy in global trading.
In 2003, at the request of the European Commission, CEN set up an open “E-Invoicing Focus Group” and issued a report analyzing the requirements on standardization issues relating to electronic invoicing resulting from the new VAT legal framework. The Council Directive 2001/1115/EC recognizes the legal validity of electronic invoices for VAT purposes and specifies the related, required, technical conditions.
What Is The European Commission Recommendation 1994/820/EC.?
The Commission Recommendation was developed at the request of the European Trade and Industry Electronic Data Interchange (EDI) user groups to provide the required legality, acceptability and security in the use of EDI in European member states. The Recommendation includes the Model European Interchange Agreement that was developed in line with the work carried out by the International Chamber of Commerce and several major industry sectors, including the automotive, electronics, retail and distribution sectors.
Trading partners were advised to agree and sign interchange agreements based on the European model prior to commencing the exchange of EDI messages. The Recommendation specifically deals with the definition of EDI, EDI messages, essential characteristics of EDI messages, security of EDI messages, admissibility of evidence regarding EDI messages, storage of EDI messages, EDI standards, applicable laws and security measures when using EDI.
Article 2 of the Commission Recommendation also provides for alternative provisions for accepting electronic invoices when they are sent by EDI, and the agreement then provides for the use of procedures guaranteeing authenticity of origin and integrity of contents. The Recommendation deals with the legal status of EDI by mandating that EDI is admissible in a member state to the extent permitted by national law.
How Did Directive 1999/93/EC Contribute To The Development Of E-Invoicing?
The European Parliament and Council issued Directive 1999/93/EC on Community Framework for Electronic Signatures. The Directive introduced a legal framework to guarantee EU-wide recognition of electronic signatures. This Directive recognizes the importance of the electronic signature as a prerequisite for e-invoicing and security of data transmitted electronically.
The purpose of the Electronic Signature Directive is to facilitate the use of electronic signatures in e-invoicing and to contribute to their legal recognition. It establishes a general framework for electronic signatures and certain certification services to ensure the proper functioning of the internal market. Electronic signatures are also considered important as they facilitate the wide use of e-invoicing. Apart from its commercial value, the invoice is an accounting document, it has legal implications to both transacting parties and it is the basis for VAT declaration and reclamation, statistics declaration for intra-community trade and export and import declaration for extra-community trade.
How Has Directive 2001/115/EC Enabled E-Invoicing For VAT?
European Directive 2001/115/EC specifically deals with e-invoicing. It clarifies the implementation of e-invoicing and aims to introduce harmonized procedures for paper as well as e-invoicing across all member states. The Directive outlines the liability of taxable persons and their service providers for the integrity of content and authenticity of origin of electronic invoices for VAT purposes. This relates mainly to the invoices exchanged electronically and to the storage of invoices.
Under the Directive, no member state can refuse the invoice of goods or services sent by electronic means provided that the authenticity of the origin and integrity of the contents are guaranteed by means of an advanced electronic signature (AES), or by means of EDI as defined in Commission recommendations. Member states may, however, require the advanced electronic signature to be based on a qualified certificate. Invoices may also be sent by other electronic means subject to acceptance by the member state(s) concerned.
Although the EDI invoice message has been adopted by several industry and trade sectors in Europe, it has not been implemented to its full potential. Paper invoices have been maintained to overcome difficulties surrounding VAT regulation. Several member states introduced special procedures to allow EDI paperless invoicing but still require companies to apply for permission from the tax administration and in some cases to exchange summary VAT control messages, electronically or on paper. For cross-border electronic invoicing, companies are exchanging electronic invoices for company administration application, but are forced to parallel the exchanges with paper invoices to meet member state VAT requirements.
Source: ibls.com
An organisation can save 1-2% of their turnover by replacing paper invoices and optimising the related processes. Electronic and automated invoice processes can result in savings of 60-80% compared to traditional paper based processing. Thus the payback time on investments in E-Invoicing projects can be as short as six months.
In 2008, roughly 1 million European businesses and 23 million consumers exchanged one billion electronic invoices. Every day in 2009, 1,200 businesses and 11,000 consumers are expected to become new E-Invoicing users. Owing to the attractiveness of this market, around 350 service providers and another 150 application providers are offering their solutions and services.
This purpose of this report is to support invoice issuers and recipients wishing to replace expensive paper based invoice management. It gives all the relevant information on the larger European markets and helps by focusing on the most promising solutions. The report not only provides facts, but also qualitative views, evaluation and details about the products offered by many providers.
The document costs 590 Euro, but a table of contents and download preview are free available online:
www.expp-summit.com/marketreport.htm
As Supply, Logistics en Service (SLS) manager, Voestalpine Railpro delivers an integrated total package for the Dutch railway. Railpro operates in the new development-, breakdown- and maintenance market.
The solutions of TIE Kinetix improve the quality of the service and establish cost savings.
“TIE is looking forward to support Voestalpine Railpro with the introduction of Business Integration based on EDI in de railway construction and maintenance sector. EDI is new in this sector and Railpro can build on the knowledge and experience of TIE, obtained in other sectors. With this collaboration, TIE enters a new market, in which many potential customers can profit from the TIE solutions in combination with the GS1 standards.”, says Jan Sundelin, CEO of TIE.
Source: Euronext
Update: The report outlines the progress made during the first year of the group’s mandate and represents an important step towards a European Electronic Invoicing Framework which the Expert Group will develop until the end of 2009. Stakeholders are invited to comment on the report until 13 March 2009. They should be sent by email to [email protected].
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:
The Observatory on Electronic Invoicing and Dematerialization was set up in 2006 by the Politecnico di Milano’s School of Management with the specific aim of demonstrating the inherent value of adopting electronic invoicing and document dematerialization processes and, in general, of digitalising the entire order-payment cycle. At the same time, the Observatory seeks to encourage a wider and more advanced adoption of these technologies within the national economic system.
By clicking the link below you can read the report: “Electronic Invoicing as a “keystone” in the collaboration between companies, banks and PA.” (Politecnico di Milano (2008): Report 2008, Observatory on electronic Invoicing and Dematerialisation)
Click the link to obtain access to the report
You will be redirected to the ICT & Management Observatories by Politecnico di Milano website.
The creation of the CBI Consortium – Customer to Business Interaction, which replaces the Interbank Corporate Banking Association created by ABI in 2001, was approved on 20th of May 2008 during the ACBI annual meeting. The new CBI Consortium, established in Rome, was created to ensure an even more efficient management of Interbank Corporate Banking; this service allows companies to connect easily, swiftly, and safely with the banks where they hold current accounts, through a single electronic connection. The goal of the Consortium is to plan and develop standards, guaranteeing that they are certified, and to define a reference regulatory framework; this would allow banks to carry out an online connection and dialogue with the clientele, with a view to interoperability both at national and international level.
Read the document about this transformation below:
Source: www.cbi-org.eu
