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Estonia sets an example in e-invoicing
A Nordic-Baltic cooperation uses CEF eInvoicing and eDelivery to achieve standards compliance, cost savings and efficiency in the public sector, as well as enhanced cross-border opportunities in the private sector.
Tallinn at night by Adobe Stock.
- Consortium members:
- Estonian Association of Information Technology and Telecommunication (ITL) as project manager
- Eesti Post (Estonia)
- Telema AS (Estonia)
- Tieto Estonia
- Tieto Finland
- Latvian Information and Communication Technology Association (LIKTA)
- Project: Internet of Business
- Challenge: How to make sure that all business transactions move between organisations automatically and in real-time?
- Solution: Estonia taking the first step towards achieving a Real-Time Economy through electronic invoicing
- Building Blocks: eInvoicing and eDelivery
Agile and ambitious Estonia
When it comes to IT infrastructure, Estonia’s small size plays to an advantage. Project implementations are smaller, making it easier for the country to be agile and to achieve ambitious goals and visions. Estonia’s vision is to enable Real-Time Economy (RTE), a concept where all business transactions, such as orders and invoices, move between organisations automatically and in real-time.
While achieving RTE will take more than a decade and require significant investments and changes in people’s mindsets, the Estonian Association of Information Technology and Telecommunication (ITL) decided to start with e-invoicing. ITL looked for partners to share the workload and found them in Estonia and in neighbouring countries: Latvia and Finland.
Partner organisations formed a consortium under the project name ‘Internet of Business’. With the participation of some of the biggest e-invoicing operators from Estonia and Finland, the impact of the project was significant. Partners were mainly driven by achieving compliance with the European standard on electronic invoicing (EN 16931) - as well as the will to reduce costs and increase efficiency.
Access to and from anywhere in Europe
The project started in 2016 and in 2017, they received funding from the European Commission’s Connecting Europe Facility (CEF)programme. CEF funds IT infrastructure projects and provides readily available digital building blocks to help Europeans develop digital services faster and easier. The consortium decided to implement electronic invoicing with PEPPOL, an agreement framework that enables its participants to connect to a common network. PEPPOL, also partly funded by the EU, uses specifications and technologies from the CEF building blocks eDelivery and eInvoicing. eDelivery defines common specifications and sample software for exchanging documents, in this case e-invoices, securely and reliably. The eInvoicing building block provides services supporting the implementation of the European standard on e-invoicing. Hence it supports the implementation of standard-compliant solutions that enable the sending of e-invoices across borders.
How CEF building blocks are helping Estonia
The consortium chose PEPPOL and the underlying CEF building blocks as they are mature, thoroughly tested, well supported and widely adopted. PEPPOL already has an extensive existing network that connects its members to each other. This access to and from all participating members is of great value for Estonia. Considering Estonia’s vision of a Real-Time Economy, eDelivery will also help Estonia expand to other fields, such as exchanging e-orders and e-receipts in future. Furthermore, CEF eInvoicing is crucial for achieving compliance with the European standard.
Actual technical implementation started on 1 June 2017 and ran until 31 August 2018. The hardest part proved to be the document mapping between the European standard and national norm. The standard leaves room for interpretation and each project partner had a different understanding of what specifications meant. Differences were discussed and reconciled, and the resulting e-invoice format has now been approved by the Estonian Ministry of Finance as a best practice. For document exchanges, PEPPOL Access Points (APs) and Service Metadata Publishers (SMPs) were implemented and integrated based on eDelivery specifications.
Estonia sees itself as a small and agile demo country for bigger countries, with the luxury of making mistakes and correcting them quickly. To learn more about Estonia’s solution, visit the project website to read about its outcomes:
Empowering the private sector
Even though Estonia now conforms to the European standard, one particularity remains – the Estonian public sector does not have invoice processing capabilities. Invoice processing is outsourced to private sector SMEs, acting as invoicing operators. The Estonian government did not want to disrupt the private sector by taking away from businesses that were making a profit. The end solution benefits both the Estonian public and private sectors by allowing each to focus on what they do best.
Among the main benefits are time savings, which allow economic operators to focus on more business critical and profitable activities. Furthermore, the standard supports cross-border commerce. This means that service providers in smaller countries, such as Estonia, Latvia and Finland, can now enjoy greater interoperability and find clients outside their country borders.
“Considering that in Estonia you can establish a company in less than 20 minutes, we believe that business management should be just as easy as business creation. This is what CEF is helping us to achieve. Thanks to eInvoicing and eDelivery, Estonia has taken the first step towards Real-Time Economy. We are now open and reachable from all across Europe.”
Sirli Heinsoo, project manager Internet of Business
Estonian Association of Information Technology and Telecommunication (ITL)
The next steps are to further integrate accounting software with electronic invoicing and to standardise all transactional data for automated business reporting. Once e-invoices can be exported from accounting software in the EU format, the need for conversion is eliminated and no information will get lost. It will become even easier for invoices to move freely from operator to operator.
For the time being, both the Estonian and EU standards will be supported by the government. However, the Estonian standard will no longer be updated. The EU norm is preferred by both e-invoicing operators and accounting service providers, who are leading the e-invoicing market. Hence, the national standard is expected to fade away in 10 years’ time.
How can CEF help you?
Our website provides details on the building blocks with accompanying technical documentation and support services that are available to all. We would be happy to help you get started, visit us at the links below to learn more.
This project was funded by a CEF Telecom grant under the name "Internet of Business (IoB) 2016-EU-IA-0120". Read more to learn how you can apply for EU funding for your project, and check out all Estonian CEF grant beneficiaries.
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