Unfortunately we were not able to visit this years Exchange Summit in Barcelona. However Ellen Leith of APN Today was present and she wrote an interesting background article, called: “Avoiding the e-invoicing toxic mix“. In it she points out some interesting points. I added some additional remarks. So instead of avoiding the e-invoicing toxic, it actually being addressed. A bit.
First she points out that while e-invoicing is heavily debated in Europe, Latin American countries are streets (blocks!) ahead in terms of adoption, mostly fuelled by mandatory requirements the last five years. As we all know, the results are being missed in Europe. Results like savings for businesses and public institutions. But also increased tax revenues (partly by decreased tax evasion). And even increased business productivity.
Ellen Leith states in her article that if something is offering up undeniable benefits, and yet is still being slow to develop, there are usually solid reasons. As for the European e-invoicing arena, these reasons make up for the toxic e-invoicing mix:
- Lack of time to devote to an implementation project
- Doubt in the ROI,
- Lack of budget
- An overall acceptance of the status quo.
- European infrastructure and technology issues (lack of a standard)
Thankfully e-invoicing service providers have acknowledged these issues, and they are looking for different ‘angles’ to disarm these toxic issues and making e-invoicing a success for their customers:
- Document management angle
- Business process mangement angle
- Getting paid angle
- Supply chain finance angle
- Credit management angle
- Banking angle
- …
Lack of a standard?
According to Ellen Leith on of the major elements of the toxic e-invoicing mix is the lack of standards. As she puts it: “It was agreed that any development of standards should have a common denominator, but without, as some members of the panel pointed out, too much rigidity which would only add to complexity, with a correspondingly negative impact against the groups’ overall aims. In any case, it’s the European Commission’s goal to make einvoicing the predominant mode of invoicing by 2020, which will be helped to a large degree by adherence their April 2014 directive.”
Although standards are important, standardisation doesn’t necessarily means simplification. In fact it could add to the complexity, because the addition of a standard, doesn’t necessarily mean that other formats will leave the arena (especially not when the need for a status quo remains). Standardisation in combination with a mandate? That will help. Big time. Just look at the Latin American countries. That is why it doesn’t come as a surprise that more and more countries on the European continent, are looking for this approach. Countries like Turkey, Spain, Portugal.
Conclusion
Ellen Leith concluded with: “With over 600 suppliers and ever decreasing business margins, the European market is only going to get more competitive. The next 2 – 5 years should see some interesting developments in the e-invoicing world, both in terms of the service providers’ offerings, business models and partnerships, and also in the deeper strategic reach of einvoicing to produce real business outcomes.”
My conclusion is that the diffusion of e-invoicing is a matter of time and that different continents have different approaches. It seems that the LATAM approach is proving the most succesful for now, whereas the EU still has to find its bearing. My main conclusion is that regardless of the legislation and standards, businesses have to and can rely on e-invoicing service providers from years on end to help them achieve their goals.
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