New year 2018 will see a well-deserved spotlight fall on electronic invoicing.
Firstly, one of the biggest electronic invoicing initiatives, the implementation of an interoperable, common standard for B2G (business-to-government) trade in Europe, has set a goal of April 2019. So 2018 is the year for organizations to get ready. The European norm is the European Commission’s response to the complexity of the various invoice formats across the EU and aims to ease cross-border trade relations. In addition, an EU directive obligates all European contracting authorities to be able to process e-invoices by the end of 2018.
Secondly, it is not only Europe where standardization is currently putting wind in the sails of electronic invoicing. For instance, in the United States, the Federal Reserve is involved in an e-invoicing initiative to design an interoperability framework for the US market to enable end-to-end electronic processing of business invoices and payments.
Thirdly, and perhaps most importantly, there is widespread consensus among all the different stakeholders, including e-invoicing service providers and the major industry associations representing them, such as EESPA and OpenPEPPOL, in favor of removing operational, regulatory and other obstacles of e-invoicing, simplifying life for the end users. This for its part makes the progress of e-invoicing in 2018 inevitable. I am pleased that there is also broad agreement on how those obstacles should be removed.
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E-invoicing in 2018: toward speed and savings
So 2018 will be the year of increasing technical and business interoperability. European governments are increasingly mandating e-invoicing in the B2G sector in order to improve efficiency, and everybody is getting ready to implement the European standard and comply with the e-invoicing initiatives. Some governments are even following the example of Latin America, where electronic traffic in B2B (business-to-business) is also mandated to enable real-time VAT reporting and reduce VAT leakages.
At the same time, large buyer companies leading the market have widened their approach and regard e-invoicing as an enabler for maximizing the value of their trading relationships – their electronic invoicing initiatives are targeting end-to-end automation in their source-to-pay processes, agility in accounts payable, and optimization of working capital in the supply chain.
Despite the different approaches, these are all steps toward capturing unparalleled cost savings and leveraging the efficiency potential of electronic invoicing.
“These are steps toward accelerating the digital transformation in organizations and their networks.”
One might question the role of the European norm for e-invoicing in this game. It is just another option for suppliers to send their invoices to the public buyers? How will it change the market?
For one thing, multinational companies stand to benefit from using a single format right away. And the snowball effect will increase every time e-invoicing is adopted in business relations with the public sector, first at government level and soon also at municipality level too (by 2020 in the EU). Experience in countries where the public sector has taken the initiative to push for e-invoicing show that it will get the ball rolling and rapidly impact B2B invoicing as well.
So I have no doubt that e-invoicing volumes will grow. In Europe, electronic invoicing volumes from 2016 already showed a 29% increase compared to the previous year’s figures, and the progress of the e-invoicing initiatives and harmonization will undoubtedly help to speed up the curve.
E-invoicing is a commodity
E-invoicing in 2018 will become a commodity, if it has not already done so. It is impossible to achieve a high level of effectiveness in your source-to-pay or order-to-cash processes without switching to electronic invoices. It will soon be impossible to survive, let alone thrive, in B2G and B2B trade without an electronic invoicing capability.
These developments and the large number of e-invoicing initiatives mean that there are no more excuses for delays or negligence when it comes to e-invoicing. Take a look at your service provider’s delivery capabilities for e-invoicing in 2018.
Are they ready for the European standard and do they offer support for PEPPOL? Can they provide you with maximum reachability and manage your business network, whatever its current and future range? Are they able to operate efficiently in the rapidly changing e-invoicing market? It is time to find the right partner who can help you reap all the benefits of e-invoicing right from the start.
As many remaining barriers are removed from effortless e-invoicing in 2018, you need to stay tuned. One way to do that is subscribing to our monthly e-invoicing news. You will receive insights and updates like the one you are just reading straight to your inbox.
Ahti Allikas has been active in the e-invoicing industry since the year 2000. He currently works as Head of Partners and Networks at OpusCapita, and is responsible for the development of the e-invoicing ecosystem. Ahti is a member of the executive committee of the European E-invoicing Service Providers Association (EESPA), serves as the OpusCapita representative towards the OpenPEPPOL Association, and recently joined the European Multi-Stakeholder Forum on E-Invoicing (EMSFEI).
>> Join our webinar where we examine the current state and future trends of e-invoicing more closely with e-invoicing expert Bruno Koch of Billentis.
>> You should also check out the global market information by downloading the comprehensive Billentis Market Report 2017.
>> Read more on PEPPOL and why it matters for electronic invoicing and procurement in Europe.