News from Business Payments Coalition meeting 2019
PEPPOL, Business Network, E-invoicing
In my last blog I gave updates about the developments from the Peppol General Assembly and this month I want to follow this up by giving some information on the current situation in the United States. It’s amazing to see how countries around the world see the value of standardizing e-invoicing.
According to the latest Billentis report the total amount of invoices that will be sent in 2019 is around 550 billion. That number is set to quadruple by 2035. Yet only about 10% of those invoices are currently sent electronically. Standardization is the key.
The United States is moving forward with country-wide e-invoice standardization activities and we covered this topic already a bit at the end of last year on our blog. One of the key drivers for this standardization is the inefficient payment market in the US and e-invoicing could make a real impact here.
I just returned from the E-Invoice workgroup meeting in the US. The meeting was driven by the Business Payments Coalition (BPC) and it was held alongside the US Exchange Summit conference. The BPC’s mission is to work together to solve problems related to processing information associated with B2B payments in order to promote the use of electronic payments & straight through processing (STP). The reason that the BPC was established was and is to make the payment market in the US more efficient. The US is still using checks in Business to Business transactions, something that hasn’t been done in most European countries for nearly 10 years. One way to make the payment market more efficient (and standardized) is to put an increased emphasis on electronic invoicing.
That's why the BPC launched an initiative that has now been active for two years. As of now, this group is working on two streams: a technical stream and a semantic stream. The streams are analyzing what's happening around the world and how those developments can be adopted in the US.
Both of the streams will file an assessment report by July 2019 and 2 more reports will be kicked off soon. It might sound like an odd solution to a problem creating reports, but those reports will be the basis for understanding the situation for example in Europe, learning from others and replicating some of the key models in the US.
The report produced by the semantic workgroup will assess the semantic model of the EU Standard on E-Invoice and whether it can be potentially adopted in the US. While I, of course, don’t yet know the final outcome, I am sure that the signs are looking good. Of course, we won’t be able to implement the EU standard for e-invoicing 1:1 in the US because there are some core differences in for instance tax handling. Tax handling and also the use of cross border currency and of some additional reference elements are the main differences identified as of now. However, what is clear is that we don’t need to create yet another new standard for the US market and we can adopt some of existing standards with needed adjustments.
The second report that is being worked on at the moment is a technical report and it will look at the messaging and delivery infrastructure. This report will look at things such as message envelope, payload, transport protocols, and identifiers. Existing frameworks and models like Peppol, EESPA, CEF e-Delivery and Australian Digital Business Council are compared and assessed. I am pretty confident that we will not invent the wheel here either and it will turn out that we will be able to reuse or adapt something that already exists.
This will also increase the potential for a Global Interoperability Framework - what is this you might ask? I’ll cover this topic in the next blog, so be sure to visit here again.
After the reports, there will be two additional working groups with reports to be delivered in the beginning of 2020 that will look at governance and adoption. As 2020 approaches it will become time to focus on execution. The work of those groups will be the key to success in my opinion. Because in the US, the Federal Government will probably not take a mandating role. This is different than how it was in many European countries where e-invoice growth has been kicked off by Public sector, who made it mandatory to send e-invoices only for businesses who were dealing with the public sector. That means that the private sector service providers and interest groups need to drive the adoption and governance and it will be a balancing act between a strict standardization model, that would be simple to implement but would sacrifice flexibility that is needed in order to get a critical mass of service providers to participate.
It will be very interesting to see how this will develop further. I strongly believe that we are on the path to standardization and e-invoicing in the US but the way we will get there will not be easy and for sure an interesting one to follow. I will keep you posted about the ongoing activities.
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), member of management committee of the OpenPeppol Association (PEPPOL) and also member of E-Invoicing expert group in the European Multi-Stakeholder Forum on E-Invoicing (EMSFEI).
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