A European Commission implementing decision was published a few weeks ago and, therefore, the measures referred to in the first subparagraph of Article 11 (2) of Directive 2014/55 / EU will enter into force no later than 18 April 2019. What does this guideline mean, what is the reason and what does that mean for your organization?
Directive 2014/55 / EU
The European Directive 2014/55 / EU stipulates that all contracting authorities in the EU countries must be able to receive and process e-invoices per 17 April 2019. This obligation is also laid down in the Public Procurement Act 2012.
The European core invoice EN-16931
Naturally, a European standard invoice has also been considered: that is the European core invoice EN-16931. With this new European standard, a foundation has been laid for an unambiguous exchange of e-invoices between suppliers and governments in Europe. EN-16931 describes a data model in which all data elements that can and must occur in an electronic invoice are defined. Think of an invoice number, invoice data, total amount and so on.
Background
The introduction of this EU directive stems from a broader objective: the "Digital Single Market" (DSM). The European Union has been supporting these developments for years, including 'standardization' of transactional data traffic, which serve to convert information exchange on paper for (trade) transactions into electronic message traffic. We are working hard to achieve this, in cooperation with the Member States. One of the first topics was payment traffic. The ability to do payments across national borders within Europe just as easily as nationally was seen as an important contribution to the DSM. These options were realized under the name SEPA (Single Euro Payments Area). Now the next step is taken by entering a standard e-invoice: EN-16931.
The introduction of the aforementioned standard invoice and obligation for (semi) governments to receive digital invoices should break the slow adoption of e-invoicing. In this way, the government may become a flywheel for a broader use of e-invoicing. Because in addition to the government, organizations such as VNO-NVW and MKB Nederland also see the benefits of e-invoicing.
Benefits of e-invoicing
Because the benefits of e-invoicing are countless. Firstly, there is a considerable cost saving in processing costs for invoice receipts. A wide use of e-invoicing leads to less scanning and recognition and the validation activities that follow. An error-prone and expensive process, which greatly slows down the invoice processing process.
Secondly, exchanging XML data ensures that the processed invoice data is correct and that makes e-invoicing much more accurate. This leads to less recovery and frustration. Because the invoice data is correct and there is hardly any validation required, the invoices can also go straight into the process. In other words, the entire invoice processing process is much faster. This may possibly lead to extra payment discounts and a better grip on obligations and working capital.
The above examples only concern the creditors' process. However, e-transactions continue. The entire process from ordering to paying can be much more efficient! Ordering can also be fully automated. By applying the same technology to ordering and invoicing, "straight through processing" of business transactions is now possible. This leads to a grip on expenses, contracts and obligations and low transaction costs. Purchasing and finance benefit greatly from this.
What does this mean for your organization?
Implementation of receiving and processing
Implementing e-invoicing usually means, next to realizing the ICT facilities, the (re) structuring of the processing process afterwards. The receipt of e-invoices may perhaps be assured in the realization of the ICT facilities, but the process of processing is often not the least. And precisely in that process the efficiency benefits of e-invoicing come into its own. It makes sense to include the purchase-to-pay route in the breadth of the implementation of e-invoicing.
When we broaden the process to order, we can increase control over the expenses; which part of our purchases is under management? Does the customer offer a managed "order experience", so that orders can only be ordered from preferred suppliers? In this way, many purchasing advantages can be achieved.
Compliance or legitimacy is also a weak point in the purchasing process. Who can order something and how does the procuration schedule work? Experience tells us that many orders are made without proper approvals. This can be overcome by automating this process. When ordering is also automated, a "touchless" flow arises, where only a single exception needs to be managed.
Support for receiving e-invoices
Contracting authorities must set up a facility to receive e-invoices. Which steps do you need to take to make the right choice and a successful implementation?
- Develop vision
What is the dot on the horizon? Which (partial) processes do I want to automate? Long term versus short term. In the financial system or in a "best of breed" solution?
- Choose a solution / service provider
Based on the starting points, make a request that provides the best support, in the short and long term.
- Implement
Which departments and people have to work differently? Change management!
- Activate
Suppliers also do not always like change. Activate and reward them to make a success of this project.
About ICreative
As Basware and Kofax partner, ICreative delivers purchase to pay and e-invoicing solutions to large corporations and institutions. Our solutions offer more control on business spend and less complexity of the purchase to pay process.
