E-Invoicing in Europe: Status Quo and Outlook

The EU Commission has been taking steps to advance the adoption of electronic billing for quite some time now. The cornerstone for this push was “Directive 2014/55/EU of the European Parliament and of the Council of 16 April 2014 on electronic invoicing in public procurement Text with EEA relevance”, which codifies the key elements of an electronic invoice across Europe in a semantic data model. The EU’s objective was to facilitate digital cross-border trade with regard to government contracts and guarantee the acceptance of electronic invoices in the realm of public administration.

Six years later, on April 18th, 2020, e-invoicing became mandatory for public administration and suppliers in Europe. Most member states have introduced their own standards to implement the directive. Germany and France, for instance, joined forces to develop “Factur-X”, to fulfill the provisions of Norm EN16931. In Germany, this e-invoicing format also goes by the name of ZUGFeRD. The latest version offers the option of sending an “XRechnung”, a special German format for B2G (business-to-government) invoicing.  

In this blog, we have previously reported on Italy’s European trailblazing approach to meeting the e-invoicing requirements, FatturaPA. It’s generally advisable for internationally active companies to keep a close eye on developments in Italy and other similarly active countries, such as Hungary or France. Here, a clear trend has emerged for B2G business – post-audit processes are being superseded by clearance centers. To manage this development, it’s essential for companies to adopt EDI.

The future of invoicing in Europe is electronic

The free market has also long taken note of the benefits e-invoicing offers to processes, such as easier, faster processing or the savings achieved through centralized, low-cost archiving. Consequently, B2B e-invoicing has continued to spread further. An article published by the European Union projects potential savings of up to 40 billion euros per annum in European B2B commerce alone.

It can therefore be assumed that the conventional paper-based invoice is set to become obsolete and eventually disappear in the European Union for B2G and B2B scenarios, because it is no longer able to fulfill its compulsory function and e-invoicing provides a clear cost benefit.

What should an e-invoicing solution provider be able to offer?

E-Invoicing in Europe is currently evolving so dynamically that one could easily lose track of developments. It’s much less complicated for a company to concentrate on its core business and trust in the expertise and services of a specialized, third-party provider for its digital invoicing. So, questions naturally follow regarding which criteria one should consider when selecting a suitable solution provider.

In France, for instance, one currently needs to submit 24 separate pieces of different information from various fields on each invoice to the French tax authorities. At a later stage, it’s planned to add even more details to the mandatory submission. Which information will be required, and when it will become mandatory to report it, has yet to be clearly defined by the state? For these kinds of continual changes, a company needs reliable compliance management, which monitors the situation closely for the customer.

Regarding scalability, an e-invoicing provider needs to guarantee that it has the capacity to grow with the customer and the flexibility required to deal with the integration of various formats and standards. The partner should also provide the option of expanding the electronic invoicing to include other institutions and EDI services, to ensure that the entire company is set up well for the long term.

The ability to integrate processes and solutions quickly and easily is a quality characteristic based on many years of EDI expertise. A highly competent solution provider understands its customers’ purchase-to-pay and order-to-cash processes and should be able to integrate them into any ERP system reliably and in a timely manner. Implementation of the service and integration of ISV partners should be completed within a few weeks, to ensure a broad and robust situation for the future.

The on-time delivery can also quickly become business critical. Regulations and legal requirements are subject to timelines and need to be implemented by specific deadlines. Expertise in connecting to international networks is also essential. To benefit from transnational and electronically supported procurement systems, for instance, a certified PEPPOL Access Point for legally compliant e-invoicing for B2G, B2B und B2C in accordance with international standards may be required.

Finally, the human factor with excellent service and support makes all the difference. Dedicated contact persons with many years of project experience help customers to focus on their core work, conserve their resources and reduce costs. Trustworthy service providers should offer 24/7 SLA monitoring including obligatory feedback and ideally run their support inhouse.

One solution for all requirements and communication channels

Retarus E-Invoicing is a cost-effective cloud solution, developed with EDI DNA and over 27 years’ experience. It complies with international provisions and fulfills the highly diverse technical requirements of the various countries. As a certified PEPPOL Access Point and a member of local e-invoicing associations, Retarus provides its customers with legally compliant B2G, B2B and B2C e-invoicing services in Europe and around the globe, always meeting the applicable international standards.

Find out more about Retarus E-invoicing on our website or directly from your local Retarus representative.

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