Recent developments indicate that European politicians are finally catching up with reality and embracing e-Invoicing.
The meeting of the European Multi-Stakeholder Forum on e-Invoicing in Brussels detailed a number of encouraging initiatives related to e-Invoicing and indicated that there is now a real commitment to push paper out of business processes – even in the public sector.
However, there will inevitably be scepticism about the potential success of such EU-wide projects, and for good reason.
Let’s not forget that electronic invoicing was adopted long ago by forward-thinking businesses in the private sector, and has seen steady (albeit not massive) growth ever since.
Countries such as Italy, Spain, Portugal and Germany have finally made up their mind and followed more technologically-advanced nations like Norway and Denmark in implementing strategies to modernise their public sector organisations. Or have they?
Modernisation goes beyond having a common standard. It means structuring the massive change management projects required to utilise and realise the benefits of electronic processes in lieu of paper. Evidence for this still needs to be produced, and while countries like Mexico and Brazil have shown real benefits after mandating the use of electronic invoices across the board, I question whether the current scope of the European project is broad enough.
Additionally, many of the country-specific activities were launched before the publication of the EU’s general guidelines. Germany´s mind is currently set on ZUGFeRD, the German e-Invoice standard. And Italy and Spain are mandating the use of specific XML standards to constitute the legal invoice. Other countries will no doubt follow with initiatives tailored to their own requirements, but I wonder if these countries will change their approach once the EU guidelines on a common standard are issued.
And finally, it seems that the auditors are already shifting their focus away from the invoice transaction itself and towards the archiving of invoices. While it will be great to have a common standard for the electronic invoice, taxpayers will then have to contend with varying requirements around the archiving and auditing of electronic invoices.
We’re curious to see when and where the politicians will next shift their focus, and suspect that tax collection could be key. A recent Economist article highlighted the huge success Mexico has had in using e-Invoicing to fight tax fraud. We predict that European countries will follow suit and we will witness the implementation of general mandates in the continent’s biggest economies. But as there needs to be a unified and expansive effort to make this happen, we will remain cautious until this actually eventuates.