Government of Flanders introduces early payment with e-invoicing
Reaching a solution required intense collaboration among public authorities, as well as between the public and private sectors, to reduce payment processing time and save on costs.
@Photo by the Government of Flanders. The main building of the Flemish authorities, based in Brussels.
Quick facts:
- Country: Belgium
- Organisations: The Government of Flanders and the Belgian Federal Administration
- Project: e-invoicing project (e-facturatieproject)
- Challenge: How to optimise invoice payment process to speed up approvals and enable early payment?
- Solution: Digitally connecting private sector suppliers with public sector buyers via the PEPPOL Network, enabling the sending and receiving of e-invoices.
- Building Blocks: CEF eInvoicing and eDelivery (embedded in PEPPOL)
- CEF funded: No
Process efficiencies as driving force
In 2013, Flanders, the northern part of Belgium consisting of five Dutch-speaking provinces, set about to define its e-invoicing policy in close collaboration with the Belgian federal administration. At the onset, the Flemish government was receiving paper invoices, which were cumbersome to manually enter into their accounting systems, had long approval periods, and always ended up being payed on the very last payment date. Driven by the will to improve the efficiency of the payment process, the Flemish government looked for a digital solution that could enable early payment.
A few years later, in 2015, the Flemish government and the federal administration decided to adopt the PEPPOL agreement framework in order to develop an e-invoicing solution that would work for all. Consequently, there was a strong push from many local stakeholders to ensure that all accounting packages on the Belgian market could facilitate the sending of e-invoices via the PEPPOL network. This was achieved through intense collaboration among public authorities, as well as between public and private sector entities. IT organisations from AGORIA, the Belgian employers' organisation and trade association, were instrumental in realising this goal, with the Federation of Belgian Enterprises (VBO/FEB) also supporting the project in the B2B sector.
Commission supported solution
The PEPPOL network is based on technical specifications from the European Union’s Connecting Europe Facility (CEF) building blocks, namely eInvoicing and eDelivery. The European Standard on electronic invoicing (EN), supported by the eInvoicing building block, defines common specifications on how electronic invoices should be constructed and what elements they should contain. The eDelivery building block defines common specifications for exchanging digital documents (in this case e-invoices) securely and reliably.
The key implementation steps taken during the project were:
- Policy decisions – In 2013, the Government of Flanders decided to fully commit to e-invoicing. The decision was reaffirmed in 2016, when e-invoicing was made mandatory for all suppliers of the Government of Flanders.
- IT infrastructure – A central platform, called Mercurius, was established to connect all Belgian contracting authorities to the PEPPOL network. Mercurius bridges the PEPPOL model with the internal Service-Oriented Architecture (SOA) of the Belgian public sector. The federal government assumed responsibility for Mercurius, as well as the PEPPOL Authority.
- Integrations – The 15+ existing accounting systems present at the Government of Flanders were technically prepared to be able to accept e-invoices as of 01/01/2015.
- Raising awareness – A comprehensive strategy to inform suppliers included communication on the Flemish government website, monthly information sessions, a dedicated project support group for larger companies with complex invoicing processes, consultations with accounting platform and e-invoicing service providers, and a helpdesk for an in-house portal.
Results show impressive growth
The Government of Flanders reports on its results on a monthly basis. In February 2019, 58.5 % of all invoices received by the Government of Flanders were fully-fledged e-invoices based on PEPPOL and XML. Overall, the growth in the percentage of e-invoices received has been impressive over the past 2 years, increasing from only 8 % of invoices being electronic in early 2017, to nearly 60 % in early 2019.
@Percentage of e-invoices received by the Government of Flanders
There are, however, significant disparities between government entities. For example, 89 % of invoices received by the Flemish Public Transport Company were fully-fledged e-invoices, while for some other entities, only 35 % of invoices received were in electronic format.
The four major benefits of e-invoicing are:
- Reduced processing time – Time between invoice receipt and approval is reduced by an average of 10 days, allowing e-invoices to be paid more swiftly.
- Cost saving – As invoices can be paid faster and more accurately, the amount accrued in interest on arrears that is associated with late payments is also reduced.
- Improved order – E-invoicing optimises customer and supplier files at companies and public authorities.
- Time efficient – Invoice processing is more automated, freeing up time for other tasks.
Future & lessons learnt
The Government of Flanders and the federal government have taken the lead in e-invoicing in Belgium, and will be raising awareness among local authorities and all other government administrations of the obligations and solutions to meet the requirements of the European Directive (2014/55/EU) on electronic invoicing. The Flemish approach has been successfully more ambitious than the requirements of the Directive – not only have Flemish public authorities implemented e-invoicing, but they also enforce suppliers to comply.
"Everyone agrees on the numerous advantages of e-invoicing, to both senders and receivers, but it was only making it mandatory that it actually took off," says the e-invoicing team from the Government of Flanders unanimously.
There are three key priorities for 2019:
- Raising awareness – Promoting e-invoicing via PEPPOL for all public sector organisations in Flanders, and all of Belgium.
- Supporting the ordering process – Rolling out e-ordering in PEPPOL, already in production for the first suppliers and public sector invoice recipients.
- The sending of e-invoices in PEPPOL by public organisations – This will promote the propagation of PEPPOL and, more importantly, the uptake of cross-sector eProcurement in Belgium – and in Europe.
How can you get started?
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.