Championing the spread of e-Invoicing

OB10 is an active member of the UK e-Invoicing Advocacy Group (www.ukeag.org.uk/), a group established to champion the spread of e-Invoicing in the UK.

In time we expect this group to form the basis of the UK National Forum for e-Invoicing, encouraged and anticipated by recent policy measures taken by the European Commission. E-Invoicing is regarded as a key initiative to promote the Single Market and the Digital Agenda.

The Commission and Member States are taking action to Simplify VAT regulations on the basis of equal treatment of paper and electronic invoices, to promote standards and encourage adoption especially of SME’s. A European Stakeholder Forum is being created and Member States are forming National Forums to feed into that process; Germany and the Nordic countries are taking the lead. There is wide recognition of the massive efficiency, cost-saving and customer satisfaction benefits that come from e-Invoicing and supply chain automation.

We need UK government involvement in the creation of our UK National Forum and its ongoing participation. The National Forum will bring together many enthusiasts and practitioners and will need to expand to include all stakeholders including the public sector.

Following the transfer of responsibilities for the EU Digital Agenda from the Department of Business Innovation and Skills to the Department of Culture, Media and Sport, there is something of a temporary hiatus in identifying the place in government where this important issue is coordinated. In addition to DCMS and BIS, the Cabinet Office and the Office of Government Commerce also have a keen interest especially bearing in mind the streamlining of public procurement.

We are hoping that this issue will be resolved soon so that the National Forum can operate as a public-private body and build on the momentum we have already created in UKEAG – with the creation of case studies, contact with politicians, community groups and business people, organising promotional events and creating links with European and other e-Invoicing communities.

EESPA – The European e-Invoicing Service Providers Association

On 5th May 2011 in Brussels, over 30 firms providing e-Invoicing services from across the EU met to kick-off the formation of the new association to be called EESPA – the European e-Invoicing Service Providers Association. It should be fully functioning as a legal body by the end of the summer.

EESPA’s purpose will be to represent the supply side of the industry and its customer interests in an area of increasing public policy advocacy and the ongoing roll-out of a number of European-led initiatives to foster adoption. E-Invoicing and the related growth in e-Procurement and e-Business generally are recognised by public authorities as offering very substantial efficiency, cost reduction and customer satisfaction benefits to society as a whole. A number of policy measures have been launched such as a new VAT Directive designed to create equality of treatment between electronic and paper invoices, many public procurement projects and a revision of electronic signature and data protection rules. All of these generate considerable debate both at the time of their instigation and also at the implementation stage.

The industry welcomes these initiatives as it does the commitment of many private sector businesses of all sizes to realise the benefits of dematerialisation. As the service provider industry develops it will increasingly engage with the public policy agenda to ensure a fully workable and a fit for purpose environment for all users. EESPA will certainly want to participate in industry and official dialogues and in particular within the about to be formed European Multi-Stakeholder Forum on e-Invoicing being established by the European Commission to drive the strategic direction. A good reason to establish the association was the absence of such a body when the Commission established the composition rules for the new Forum – no representation of the service provider industry because of no established association to represent it; now being remedied.

Like all trade associations, EESPA must balance cooperation and the competitive dimensions – a pro-competitive lightly-regulated market is surely going to build increasing traction in meeting needs of e-Business in a dynamic fast-moving technological environment.

The e-Invoicing services business is finding its voice and we welcome this. All firms active in the industry throughout Europe should be encouraged to give the new association and its activities their full support.

The European Commission flies the flag for e-Invoicing

The European Commission recently published a report called Reaping the benefits of electronic invoicing for Europe, and based on the findings that it contained, one thing is very clear: the European Commission would definitely like to see e-Invoicing become the predominant method of invoicing in Europe.

At OB10, we’ve long said that the ability to provide invoice data electronically allows businesses to benefit from shorter payment delays and fewer errors, as well as reduced printing and postage costs, and so we were delighted to see all of these points (and many more) mentioned in the EC report. Even more importantly, the report also identified a set of clear and specific actions to make the uptake of e-Invoicing in Europe much easier for all concerned.

By publishing these findings, the EC has made it clear that a structured e-Invoicing programme can help to facilitate business process integration from purchase to payment, since invoices can be sent , received and processed without manual intervention. Also, because e-Invoices can be generated and transferred automatically (and directly from the issuer’s financial supply chain systems to those of the recipient), there are major economic benefits to be gained through the integration of systems like these, in addition to the savings made through reduced printing and postage costs.

For all of these reasons, the EC is determined to see that e-Invoicing becomes the predominant method of invoicing by 2020 in Europe. Already, it is working in close cooperation with the Member States and all other stakeholders to achieve this target and create the right environment for the widespread deployment of e-Invoicing.

To support this objective, e-Invoicing has now become a cornerstone of the EC’s flagship initiative known as A Digital Agenda for Europe, an ambitious scheme that aims to create a single digital market across Europe. As such, the EC is already calling for the removal of regulatory or technical barriers that might discourage the mass adoption of e-Invoicing.

Michel Barnier, Commissioner for the Internal Market and Services, was quoted in the EC report as saying: “E-Invoicing has the potential to make a big difference: for businesses, consumers, and European trade as a whole. The benefits in terms of saving time and money are fully in line with our Europe 2020 strategy and with the Digital Agenda for Europe in particular.”

At the moment, however, the existing rules that govern e-Invoicing in Europe are still fragmented along national lines, and the true potential of e-Invoicing remains untapped. This situation creates an exciting opportunity for improvement, however, since it’s estimated that moving from paper to e-Invoices would allow the EU to save around 240 billion Euros over a six-year period.

Savings like these would clearly benefit the entire EU, and would also contribute to its ability to compete on a global scale. This last point is important, because the market penetration of e-Invoicing is already growing substantially. It is critical that the EU maintains progress in this fast-moving area.

Dispelling four myths of e-Invoicing

More than ever, companies are finding themselves increasingly looking for ways to cut costs and increase efficiencies. One solution that is able to achieve both of these is e-Invoicing – the process of sending and receiving invoices electronically. However, as with every new process, companies need to know the facts.

From my experience as founder of OB10, the global e-Invoicing network, I have come across four common reservations about e-Invoicing from potential clients which I feel need to be addressed.

Myth One: “I’ve been told e-Invoicing can be a costly and difficult implementation process.”

Today, operating costs seem to be one of the first things businesses look to reduce when faced with a slow cash flow. There are a number of things that could be limited or cut altogether, one of which is the laborious practice of processing paper invoices. An answer to this costly procedure is e-Invoicing which not only speeds up the process, but will improve efficiency and reduce costs throughout the invoice to pay process.

The innovation of e-Invoicing can create a streamlined process that is implemented and managed with ease. An e-Invoice can be processed in a number of ways, as they can now be integrated with electronic invoice presentment and payment (EIPP) workflow systems or uploaded directly in a user’s ERP (enterprise resourcing planning) or accounting system. There is therefore no need for big spending on new software, meaning the cost of implementation is minimal. The savings, on the other hand, are substantial, both to the supplier and the accounts-payable departments.

Myth Two: “My suppliers won’t want to move to e-Invoicing.”

An e-Invoicing project can only be successful if suppliers participate. Organisations may be concerned that suppliers don’t have the infrastructure in place to undertake e-Invoicing, or that only large suppliers can be supported. However, this is not the case. Suppliers have realised the increased reliability and efficiency that accompanies e-Invoicing in comparison to that of paper invoicing. Businesses are bringing their accounts payable and receivable departments up to date and choosing to convert from paper invoicing to e-Invoicing. All the while suppliers are enjoying the benefits of quicker delivery and speedier payment. At OB10, we handle the whole supplier enrolment process making the procedure of converting suppliers to e-Invoicing as efficient and pain-free as possible (for all parties involved).

Myth Three: “I can’t change to e-Invoicing as it is a legal requirement to archive a hardcopy invoice for account reporting.”

In the EU specifically invoices can be stored electronically as long as they are easily accessible when required. OB10 provides an electronic archiving service called OBarchive which complies with local and international regulations and securely stores your transactions online so you can access them at any time.

Archiving in this way saves time and costs. For example, in the UK, companies are required to store invoices for six years. For other countries such as Germany the requirement is for 10 years. Not only do they need to be archived, but also easily retrieved for tax audit purposes. For companies that receive hundres of thousands of paper invoices, the cost and logistical burden on archiving and being able to retrieve an invoice, if required, is huge.

Myth Four: “I still have to make sure the invoices meet tax and VAT regulations.”

One persistent problem for the Accounts Payable team is ensuring that all invoices added to the system comply with the tax and VAT regulations of that region.

OB10 takes care of this process for you. We work closely with local tax offices and leading independent advisors to make sure all local and cross-border transactions are tax and VAT  compliant. This saves you the effort and cost of dealing with the complexities of international tax legislation. It’s also important that your supplier works closely  with independent tax auditors to ensure they are up to date and remain compliant.

EU Commission announces changes to legislation

The EU Commission have announced changes to simplify the VAT invoicing requirements, with a particular focus on electronic invoicing.

Click here to read the announcement

European Commission e-Invoicing expert group report

The European Commission has published the report of the expert group on e-Invoicing. Continue reading

The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) has just approved the Cross Industry Invoice (CII) Version 2

UN/CEFACT has approved and released the next version of the cross industry invoice standard, details and links are here …

Continue reading