Mass adoption of eInvoicing within the EU leads to significant economic benefits and increases European business competitiveness. Supported by European legislation, the acceptance of eInvoices by governments makes it easier to do business with the public sector and fosters the uptake of eInvoicing also in Business-to-Business transactions.
The direct benefits of implementing eInvoicing can be summarised via the items below, encompassing the most recent innovative applications. You can access detailed information on eInvoicing innovative uses via our Report on the Evolution of eInvoicing in the Digital Age published in February 2024. The report explores the innovative uses of eInvoicing, and it provides case studies that demonstrate how eInvoicing data can be utilised. In a nutshell, mass adoption of eInvoicing:
- Replaces physical paper forms with a structured, machine-readable electronic form that allows invoices to be handled and archived more efficiently.
- Removes the manual work of entering the invoice information, significantly reducing errors in data entry.
- Provides significant cost savings in printing, postage, intra-office routing and archiving, as well as human resources.
- Streamlines operations and getting paid faster. By automating invoicing processes, businesses can reduce errors, save time, and keep cash flowing smoothly.
- Enables SMEs to grow without worrying about the volume of their invoices since eInvoicing solutions are scalable.
- Help improve eInvoicing processes by leveraging technologies such as Robotic Process Automation to extract eInvoicing data. For example, to estimate indicators like the total annual CO2 consumption enhancing ESG reporting efforts.
- Contributes to public policy priorities such as public-sector deficit reduction, financial transparency, and promotion of sustainable development.
- Provides a better oversight of revenue, aiding budget planning and fiscal policy, while AI-powered predictive models improve tax calculations with human verification.
- Makes material contributions to invoice error detection, cost reduction and overall efficiency by using technologies such as AI and machine learning integrated into ERP/CRM systems to process and analyse eInvoice data.
- Provides benefits to private sector suppliers and creates opportunities for the public sector to act as a catalyst for the wider adoption of digital processes aligned with the private sector.
Digitalisation enables the automation of previously disjointed business processes, thus diminishing the need for manual intervention and lowering operational costs. The European eInvoicing policy aims to create an environment conducive to the adoption of new technologies and innovative approaches. This endeavour seeks to empower European enterprises to become leaders of innovation globally. For instance, eInvoices can automatically populate data fields, streamlining compliance reporting and facilitating VAT return submissions. The resultant automation not only reduces administrative burdens but also enhances governance efficiency. SMEs, in particular, stand to benefit from reduced administrative costs, thereby fostering their competitiveness in the Single Market.
eInvoicing can be used as a base layer for other innovative applications which benefit both the public and private sectors.
The following applications have been identified as the main benefits for enterprises:
- Automated compliance reporting: eInvoices can be used to automatically compile and submit VAT returns and customs declarations. Additionally, companies or sectors subject to ESG (Environmental, Social and Governance) legislation can use eInvoicing data to automate their sustainability reporting.
- Easier access to finance: eInvoicing facilitates better integration of digital payment solutions and allows for that provide a high level of transparency and security.
The following applications have been identified as the main benefits for public authorities:
- Improved information on revenue: The dataset in eInvoices can provide a better oversight of incoming revenue. This can help public authorities plan their budget and fiscal policy.
- Predicative tax calculations: Tax authorities can use eInvoicing as the base layer for predicative tax calculations. Efficiency can be gained if predicative models are powered by Artificial Intelligence, whilst ensuring that the calculation is verified through human intervention.
Enhanced fraud detection: As eInvoices are the most accurate dataset of economic transactions, they can be used to automate fraud detection. Better fraud detection is particular concern for Member States since VAT revenue loss, known as the ‘VAT Gap’, was in 2020 estimated at EUR 93 billion in the European Union.
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