What is eInvoicing
Electronic invoicing is the exchange of an electronic invoice document between a supplier and a buyer. An electronic invoice (eInvoice) is an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing, as defined in Directive 2014/55/EU.
A structured electronic invoice contains data from the supplier in a machine-readable format, that can be imported into the buyer's Account Payable (AP) system without requiring manual entering.
When comparing eInvoices to paper invoices it is useful to note that paper invoices have three characteristics that are so integrated that we typically do not notice that they can be separated. Paper invoices;
- contain data details such as amounts, descriptions and quantities
- render that data in a visual format, on printed paper, that can be manually read.
- have a physical form that allows them to be manually handled and exchanged.
Digital images, pdf’s and other visual digital forms of invoices remove the physical element and allow the invoices to be handled and archived in a more efficient way than paper. These formats however still require the invoice to be manually viewed and their data to be manually read and entered into AP systems.
eInvoices only contain the data in a structured form and can be automatically imported into AP systems. They don’t include a visual presentation of the invoice data although they can be temporarily rendered during processing or transposed into visual formats. For eInvoices the visual format is secondary and the objective in automation is not to only view the invoice, except in irregular cases.
A visualised, human readable version of the invoice may be created for reading purposes and may flow within the structured message, but it is not considered part of the invoice itself.
eInvoices are not;
- Unstructured invoice data issued in PDF or Word formats.
- Images of invoices such as jpg of tiff.
- Unstructured html invoices on a web page or in an email.
- OCR (Scanned paper invoices)
- Paper invoices sent, as images, via fax machines
The use of electronic invoices requires two key functions.
- The eInvoice needs to be created with the correct structure.
- The eInvoice needs to be transferred from the seller’s system to the buyer’s system.
The standard for electronic invoices, EN16931, defines the structure of an eInvoice and various options exist for the transfer of the invoice.
CEF eInvoicing building block
The CEF eInvoicing building block aims at promoting the uptake and accelerating the use of eInvoicing in respect of the European standard, amongst both public and private entities established in the EU, as well as in participating EEA countries.
The CEF eInvoicing building block serves to support public administrations in complying with EU eInvoicing legislation, and helps service & solution providers adapt their services accordingly. The eInvoicing building block therefore foresees Business to Government (B2G). However, eInvoicing can also be used to enable Government to Government communication (G2G).
Business to Business (B2B) and Government to Citizen (G2C) or Business to Consumer (B2C) are not addressed in the context of the eInvoicing building block.
The technical management of the eInvoicing DSI is carried out by the Directorate-General for Informatics (DIGIT) of the European Commission. Implementation of the EU policy directly related to eInvoicing is the responsibility of the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) of the European Commission.
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