Policy

Many work groups, organisations, at national and international level including mirror committees etc... are in place where often the same people discuss sometimes partly overlapping but also sometimes the same topics. This creates often confusion for the outside world (read the market). Maybe time from a policy perspective to reflect on this and optimize our time and effort. Just a thought.

The main obstacle to generalizing eInvoicing is the insufficient interoperability between the many systems involved in the invoicing processes. This situation makes wide-scale automation of the invoice processing overly complex and, consequently, unaffordable. Although it derives from many intertwined legal, semantic and connectivity factors, the main factor is that fragmentation provides operators with a protection of their market share. It can also become a source of revenues, that they quite legitimately are inclined to reinforce. In this business context, the markets are not likely to reduce the fragmentation unless an external factor modifies the situation.

Directive 2014/55/EU creates the opportunity (but no obligation) for the private sector to extend their outbound eInvoicing to the public sector, if they adopt the EN. This policy decision certainly contributes to the growth of the market. It also provides a standard for cross-sectors invoicing, which is key to the defragmentation. However it will not suffice to overcome the commercial drivers against interoperability.

The Peppol interoperability framework provides the ingredients to standardize the landscape and thereby reduce the fragmentation, while safeguarding fair competition and innovation. However, as explained above, since defragmentation jeopardizes their business model, we might expect many operators to be reluctant to comply with the framework. Additionally, eInvoicing and EDI traditionally operate in sectoral silos, so their main customers (mainly corporate segment) are generally not suffering from the lack of interoperability, so they are not likely to motivate their service providers to reconsider their business model. In this context, mandating compliance with Peppol should be an option to consider for the policy makers. Additionally, such mandate would be the way to let all actors upgrade their systems in synch. This would minimize the total costs of the upgrade, help the fair sharing of the upgrade costs, and eliminate speculation in the market.

Another option for policy makers, is to mandate the use of a central exchange platform. This strategy obviously speeds up eInvoicing generalization. However, it also eliminates competition, which affects the expected cost savings. Additionally, it brings the fragmentation at the cross-borders level. Those two aspects do not fit in the European single market strategy. Additionally this approach is not scalable.

In conclusion, mandating compliance with Peppol should be carefully considered, for it overcomes the risk of additional cross-borders fragmentation, and limits the market effects that complicate interoperability, without impairing fair competition and associated cost savings for our economy and benefits for our governments. Mandating at European level would be consistent with the rest of the European program in favor of eInvoicing and the digital single market.

Food for thoughts:  Mandatory digitization and standardization of business electronic communication in all sectors and business relations

1. Directive 2014/55 / EU imposes on Purchasing Authorities (PA) the obligation to the reception of e-invoices complying with the European Norm (EN). The implementation of this obligation required preparation (including financial expenses) on the PA’s side. However, there was no obligation to issue such e-invoices by Suppliers. Thus, if no Supplier in public contract sends e-invoices compliant with the EN to the PA, then the expenditure on implementing the Directive’s obligation will not pay off and the planned benefits from the implementation of the PA’s obligations will not be achieved.
2. The implementation of Directive 2014/55 / EU resulted in a limited appearance of IT solutions using EN as a result of demand from PA's.
3. Suppliers already use e-invoicing solutions to some extent in B2B relation, however these are solutions in other than directive’ standards or often non-standardised at all. The implementation of solutions dedicated only to B2G transactions is inefficient for business when using other solutions in B2B relation. Making B2G e-invoicing mandatory is also often seen as imposing new obligations on business, what most governments want to avoid due to fear of losing political support. However, these fears contradict the expectations and beliefs formulated in the preamble to Directive 2014/55 / EU, concerning the proven benefits of e-invoicing in business, exceeding the costs of its implementation and maintenance by business entities.
4. Currently, one of the most important reasons for business reluctance to implement e-invoicing is the fact that the IT industry (IT system providers) is defending itself against standardization because it believes that its non-standardized system protects their interests (Serge Libert mentions this). It is more difficult for a user of non-standardized solutions to change their IT system because it is impossible to replace a non-standard IT system without incurring large costs of change. However, this approach of IT companies is wrong, standardization may widen the market for them because the business will be more willing to invest in proven and standardized systems. However, the IT industry does not acknowledge this.
5. The large number of non-interoperable electronic data exchange standards offered on the market is the reason for their low level of application. In this case, the competition rules do not work in the sense that this competition does not meet the needs of the market and even eliminates these needs. So this is an example of an anomaly caused by a lack of cooperation in the IT sector.
6. The IT sector should follow the very competitive telecom industry, which uses common standards for all equipment manufacturers and operators, without which the mobile telecom market would be much shallower. There are technical standards required for many industries, the purpose of which is to promote access to certain goods for all users. An example is technical standards for transport routes and standards required in the construction of means of communication (trains, buses, trams, cars), which allows users adapted to these standards to safely and effectively use these goods.
7. Is the narrowly understood interest of individual IT companies in avoidance of IT standardization of higher value than the social interest of accessing standardized, secure and effective methods of business communication? Are non-standardized (often not fully disclosed to users) communication solutions safe for their users? Such solutions often remain outside social control, but they can easily be a tool of hidden, unlawful control over the user.

It is necessary to consider introducing consumer and business protection measures in the form of legal requirements for IT system and service providers, including standardization and certification requirements for particularly sensitive business processes and the protection of consumers' rights or interests. Such protection measures should be mandatory, however, protecting the public interest, they should not unnecessarily narrow the creative potential of the IT industry (i.e. they should mainly protect users against illegal activities).

Food for thoughts: Real-time tax reporting & e-invoicing

1. Many countries implement electronic tax reporting systems within their countries, several countries have built their system based on the SAF-T standard ("an international standard for the electronic exchange of reliable accounting data from organizations to a national tax authority" defined by the OECD ). This standard is different from the e-invoicing standards used e.g. in EDI or in public deliveries in the EU. These systems are becoming mandatory for VAT payers.
2. The application of separate standards of the tax reporting process and the e-invoicing process constitutes for the taxpayers an increased cost of operating these systems, which is not making taxpayers happy.
3. The elimination of independent handling of e-invoicing and tax reporting systems and discrepancies arising between them requires the integration of both processes. This integration has a technical dimension (

   see 'technical - tax reporting & e-invoicing') and tax and ultimately economic through more effective reporting (see 'economy - tax reporting & e-invoicing').

4. Achieving full tax control through the mechanisms of reporting data from invoices is possible only by becoming the electronic invoicing of all business transactions mandatory, i.e. invoices in B2G, G2B, B2B and B2C relations.

E Invoicing monitoring (from a statistic and eInvoicing adoption analysis point of view) at the B2G and B2B levels is a topic that  isn't clearly stated in the eInvoicing Directive. Also enlarging the monitoring scope to fraud prevention and cyber security.

First, it must be said that a lot has been done already. We have a Semantic Norm which is now implemented in most public entities in Europe on reception, with only 2 syntaxes (+EDIFACT), with more and more EU Members making it mandatory on the sending side.

We have CEF e-delivery Building Blocks, which should help to solve the delivery and discovery layers of interoperability, implemented thanks to Access Points which are mainly Service Providers.

We have made reports, especially on interoperability, identifying what need to be improved, but also regarding the impact of the diversity of Clearance / CTC / Realtime tax report for companies.

CT434 has identified a list of Amendments to the EN16931, necessary to address most of what was forgotten, especially to address most B2B business cases.

Some EU countries have started to implement a mandate for B2B invoices.

On the payment side, ERPB has worked on Request to Pay messages (including enrollment and validation).

But, there is about 25% of electronic invoices, and only 40% in a full structured form, 60% simple PDF (study deloitte, 2018). We may try to understand why. It is certainly more because it is easier especially for SMEs to provide it than because of lack of interoperability between SPs. And the fact that most SPs have developed solutions to handle PDF invoices is also a sign that it fits a need.

The Covid-19 shows that paper invoices are really difficult to process when people are not at the office and more and more companies and Shared Service Centers are asking for e-invoices (PDF or structured invoice, filled on Buyer’s portals).

It is certainly time to accelerate e-invoice deployment and more generally supply chain e-documents and data, at least for B2B in addition to B2G (and why not anticipating B2C).

There is then an urgency to set up a task force and a few resources (compared to what will be provided to face the economic crisis) in order to:

• Finish the job on the EN16931 with amendments within the end of THIS 2020 year (making sure that we will not face an IPR issue again), in order to support the B2B mandates prepared in many EU Members.
• Harmonize the CTC / Clearance obligation in EU, with pragmatism, at least by giving guidance in collaboration with TAXUD, harmonizing the mandatory e-invoice information to be sent to Tax administrations on a realtime basis if needed, and if possible, reduce the orchestration options to the 3 main observed (CTC, Clearance with previous approval, Clearance with previous approval and sending), without jeopardizing the existing e-invoice exchanges.
• Integrate REALLY the SMEs needs and constraints in our thought. Currently, solutions are built around large companies’ needs (Buyer-centric / Vendor-centric, and more generally “application-centric”), pushing constraints to their suppliers or clients and then multiplying the procedures, the portals, the follow up means to get status information on e-invoice treatment process or just to get the invoices for supplier-centric solutions. Onboarding SMEs implies simplicity and added value for them also, including payment acceleration, which means certainly to switch data / document / global supply chain transaction centric and extend 4-corner model to business status exchange / sharing:
• As SMEs mainly use PDF, hybrid documents is certainly an easier first step than moving to full structured (and especially while the EN16931 cannot handle all specific business cases). This must be developed as a complement to full structured documents in order to replace at least the Paper and simple PDF invoices rapidly with a core set of data necessary for automation (and potentially for CTC / Clearance).
• SME’s also need information on e-invoice process : implementing Invoice Message Response through 4-corner model is certainly a must. It could become an obligation at least for the first status (invoice received and compliant).
• For addressing and rooting, most working groups on interoperability already recommend the use of CEF e-delivery building blocks, and national platforms may also play a role in certain countries as a complement. This should be taken in account also, but there is no need to force a specific implementation.
• Support pilots and experimentations on transaction-centric solutions, with DLT, blockchain, smart-documents sharing, … including new payment solutions.
• Following interoperability report, and complementary initiatives like the GIF (Global Interoperability Framework) or the FNFE-MPE Interoperability Charter, define guidance on interoperability, including CTC / Clearance obligation, to be recommended to service providers, solution editors and national platforms.

A lot have been done, but a lot still need to be done to reach 100% of e-invoices (Directive 2006/2010 definition), for B2B and B2G at least.

• At this stage in the development of sizable public sector initiatives (e.g. PEPPOL, CEF) it would be beneficial if the Commission could reiterate the challenges these and other initiatives are designed to overcome. Whilst some of the challenges are well within the public sector domain and therefore quite obviously translate to policy objectives, others stem from defined instances of market failure which can be demonstrated based on objective data and analysis. It would be helpful for the Commission to restate these specific instances and the policy objectives it has derived from it; based on this summary, it will be easier to define success criteria and measure economic impact on undertaken actions. Such reiteration of the policy objectives would make the whole debate more effective and transparent, and more easily supported by all stakeholders, as it would clarify what we are trying to achieve. A couple of examples:
• There are several discussions in this EU policy arena around new technologies such as block-chain – before debating whether such technologies should be taken into account in public policy and other governmental initiatives, we need to understand what technologies are used and function today and what problems would be better solved (or objectives met) with new or emerging technologies.
• SME-SME invoicing is presumably an example of ‘market failure’ where e-invoicing is not working in a smooth and automated manner, and where it would be good with a clear policy objective to amend this situation.

• Various forms of Continuous Transaction Controls have in the last couple of years made its entrance in the EU. While it will be difficult to ensure full alignment while moving at the pace desired by Member States, the Commission must at a minimum move quickly to ensure that the regimes that are rolled out do not substantially contradict each other and as a result create a barrier to trade. One such example of clear and actionable measure to ensure a bare-minimum alignment is to recommend that ICC Practice Principles for Implementation of Continuous Transaction Controls or similar guidelines are adopted and followed.

The European E-invoicing Service Providers Association (EESPA) looks forward to the debates and reflections on policy and designs for the future of e-invoicing, as promoted by the CEF Digital team.

EESPA now has 83 members and is very active as a community in delivering compliant e-invoicing and supply chain automation solutions. Interoperability lies at the heart of what we do and we are currently engaged in the project to embrace CEF e-Delivery to underpin our member-to-member interoperability transactions on behalf of customers.  We will base this on our EESPA Model Agreements and will be using the EN 16931 as the core of our exchange standard. EESPA members currently exchange hundreds of millions of invoices to complement the transactions carried out through members’ own supplier networks.

Our members are also key participants in the OpenPEPPOL community and they also interoperate with important national infrastructures, such as Chorus Pro (France) and SdI (Italy) just to name two:  a complex picture, but reflective of the diverse preferences of national communities both in the public and private sectors and the reality that no single infrastructure can address all aspects of e-invoicing.  E-invoicing adoption is a ‘devil is in the detail’ activity and it is the efforts of service providers and their clients that bring these various infrastructures and many other solutions to life. The sheer diversity of clients, providers and solutions means that there are many moving parts to be navigated.

EESPA was  pleased to be associated as a contributor and in an editorial capacity with the EMSFEI WG 4 paper on Interoperability and Transmission and feel that we must all work harder to deliver the vision and practices set out in that document.

Continuous Transaction Controls for VAT reporting at Member State level is a growing topic of interest and we would welcome the opportunity to debate this issue with a view to achieving more harmonization in this area based on some agreed principles. We think this can be done without compromising the objectives of tax administrations and the mandating of e-invoicing, whilst also harnessing the economic benefits of supply chain efficiency as a whole and respecting single market principles.

The policy achievements of the EU on e-invoicing are impressive and find tangible expression as the Directive 2014/55/EU and the EN 16931 which have been successfully implemented. It would be great to track progress and issues as they arise. We would like to see an acceleration of efforts in CEN/TC 434 to bring enhancements so as to support one of the original objectives of the core EN to support the wider private sector adoption of e-invoicing.

We are currently working with OpenPEPPOL and other international associations to develop a Global Interoperability Framework, which is planned to be published shortly for consultation. We would welcome the opportunity to present this to the EMSFEI. and other interested parties. Our mission is to convince promoters of interoperable frameworks (global, national, regional, sectoral) to use a common set of tools and standards, whilst leaving room for local needs and profiles.

The COVID-19 pandemic can act as a catalyst for the promotion and adoption of paperless digital processes such as e-invoicing. We should seize that opportunity.

Clarifies the targetpicture of the e-commerce value chain and in particular the e-invoice. Make sure that the benefits are highlighted from all different angles and needs, different memberstates see different benefits of the digital purchasing process, control, efficient processes, quality, security, traceability, etc. Work with the targetpicture long-term as different countries and regions have different conditions. Important to have a long-term attitude and the stability of the solution, to avoid constant changes that, for example, cause different systemsuppliers to make upgrades in their services too early or too often.

Agree. And that is why there is an urgence to work on harmonization on CTC/Clearance + Extend the EN16931 to allow its deployment for all B2B business cases + interoperability framework + invoice message response + hybrid documents, under a priority of 100% of e-invoice (directive 2006/2010 definition) taking in account first SMEs for critical mass adoption and supporting first payment acceleration, focusing on the minimum invoice data needed for process automation and tax administration to lower Vat gap.

Otherwise, solutions will be designed apart as a lot of stakeholders feel the necessity to move on fast, especially after the COVID-19 pandemic, and with more and more diversity through Member Sates, which means complexity for end users and solutions, and finally the slow adoption we face since the last years (25% of e-invoices only).

In Sweden we have had e-invoicing many years before the directive came. We started with e-procurement, the order-invoice process but many started with only e-invoicing process. According to a Swedish regulation 2008 all government agencies were mandated to receive e-invoices. For municipalities and regions  there has not been any law or regulation but they started with e-invoicing early. The incentive was an efficient process and also cost effective. Due to a survey 2017 (based mainly of statistics from 2016)  87 % of the 290 municipalities and 100 % of the 20 regions had introduced e-invoicing ( structured electronic invoices, not including PDF invoices).In average 56 % of their invoices was received in structured electronic formats.

Now, after the law came into force, regulating that both governmental agencies and authorities, municipalities and regions shall receive e-invoices, e-invoicing has of course increased. And the Swedish law also stipulates that suppliers to public sector also must send e-invoices based on public procurements made after April 1, 2019.

From November 2019 it is also mandatory for contracting authorities and entities to be registered in Open Peppol and be able to receive e-invoices also via this communication. The e-invoicing standard that are recommended to be used for public sector and their suppliers is PEPPOL BIS Billing 3, since this is the e-invoice that fulfill the requirements of the European standard/ EN. The recommendation is from SFTI, a cooperation between the governmental sector and the local and regional sector. Now almost all municipalities and regions are registered in Open Peppol, but so far they still receive most of the invoices via the VAN operators network as they did before. But the interest of using Peppol is increasing. We notice it from their interest of knowing more; we frequently organize education about e-invoicing and Peppol ( both the  invoice and the infrastructure).

Firstly, I would like to acknowledge the continued good work of the CEF team and the excellent contributions made in the comments in this space by my colleagues, most of which I concur with and support in terms of warranting further consideration.

On behalf of the eInvoicing Ireland team, I have provided more detail below but in summary, I think this is a good opportunity for eInvoicing stakeholders in general to:

• Re-examine/re-state our Policy objectives

It is now a good time to re-examine the main objectives of the Directive and remind ourselves of the benefits and outcomes we are trying to deliver.

• Identify, share and acknowledge what has been achieved

Monitoring and reporting on progress across EU member states and sharing success stories and positive developments.

• Identify and manage risks and threats that have the potential to impact our ability to achieve our objectives

Focusing eInvoicing Stakeholders work on identifying and mitigating/managing risks to the Directive achieving its objectives may help us to take targeted actions that need to be taken to protect the investment made is eInvoicing by the Commission and all Member States.

(e.g. Inadequate political will or centralised supports; Availability and ease of PDF/email; Lack of support for EN in new Financial / ERP applications and implementations; Lack of joined up objectives and measures in common and related policy areas – Procurement; Tax; Digital; Green.)

Background to Ireland

The majority of invoice processing in the Irish public sector is distributed across a number of sector specific finance shared service centres. In addition to this a significant number of contracting authorities also process invoices independently. eInvoicing is not mandatory for the sender in Ireland.

For the most part, the national approach has resulted in a Peppol-based eInvoicing capability being established across the Public sector. The establishment of a European Standard and the implementation of the eInvoicing Directive across all member states is a great achievement and milestone on Europe’s Digital journey.

Shared experiences and ideas for the future of eInvoicing

However, in the absence of a mandate, there is now a challenge for Contracting Authorities to drive the uptake of European Standard eInvoicing among suppliers. This is due to a number of reasons but most commonly cited ones include:

• Lack of a mandate means effort is required to convince and support suppliers to adopt EU standard eInvoicing.
• Lack of awareness by suppliers of EU standard eInvoicing and related delivery channels (e.g. Peppol)
• Perceived admin, technical and cost overhead for suppliers to adopt EU standard eInvoicing, in particular SMEs which will be required to establish a connection (e.g. Peppol) other than email to deliver their eInvoices.
• The ubiquitous availability of PDF via email as an option for suppliers to send invoices electronically is seen as an easy option to avoid paper (as opposed to implement eInvoicing)
• The option to on-board suppliers to a ‘Register with a Buyer Portal’ approach is seen as more attractive to Contracting Authorities who do not have capacity to advice, persuade and support suppliers in adopting EU standard eInvoicing.
• Invoice processing for many Contracting Authorities is not provided for by Finance Shared Services centres. Many of these Contracting Authorities have very low volumes of invoices and very, very low volumes of invoices related to contracts above EU thresholds and therefore find it difficult to establish a business case for EU standard eInvoicing, other than for legal compliance.
• Limited centralised supports to assist Contracting Authorities drive uptake of EU standard eInvoicing among suppliers.
• For those public bodies eager to drive the uptake of eInvoicing among suppliers, there are very few if any mechanisms to them to easily identify which suppliers already have a capability for EU standard eInvoicing and therefore could be quick wins to create momentum.

In facing these challenges, some Shared Service Centres and individual Contracting Authorities are favouring the promotion of their Finance system buyer-portals and PDFs via email to drive the uptake of eInvoicing with suppliers. This has the potential to weaken or even undermine the national approach at an early stage.

Mandating the submission of eInvoices and applying eInvoicing clauses within procurement contracts are examples of measures that stakeholders regularly seek from a national approach to support the uptake of eInvoicing among suppliers.

Areas that might be considered to help the future of eInvoicing include:

• Re-examine/re-state our Policy objectives

It is now a good time to re-examine the main objectives of the Directive and re-extol the benefits.

• Identify and manage risks and threats that have the potential to impact our ability to achieve our objectives

(e.g. Inadequate political will or centralised supports; Availability and ease of PDF/email; Lack of support for EN in new Financial / ERP applications and implementations; Lack of joined up objectives and measures in common and related policy areas – Procurement; Tax; Digital; Green.)

• Placing a strong focus on monitoring eInvoicing implementations and compliance across and within Member States will send an important signal to Public Administrations that continued compliance is necessary and may help to provide a better basis on which to drive uptake of European Standard eInvoicing among suppliers. There may be benefits to articulating any potential implications of non-compliance.
• Strengthen and join-up eInvoicing’s position within eProcurement policy and establish explicit links with other related policy areas (e.g. Green). This could be in the form of providing clear guidance on how the uptake of suppliers submitting European Standard eInvoicing should be supported or possibly encouraged within Procurement competitions (e.g. should support for the EU eInvoicing standard & CEF delivery building blocks be a mandatory functional requirement for all new Financial Systems procured by EU member state Contracting Authorities). The relevance of eInvoicing to the Green deal could be explored and highlighted if appropriate.
• Consider signalling eventually EU mandate for submission of eInvoices by business to Public Sector. This would provide stronger guidance on the EU’s direction of travel and help generate benefits and justify investment. After 1 year of purchasing a service and not receiving any invoices, many contracting authorities will wonder why they should continue to incur this cost. The current crisis has ensured that cost management will be very much a priority in the years ahead.
• Explore ways to increase awareness among suppliers

Many suppliers are unaware of the European roadmap on eInvoicing, Peppol and the relevance of eInvoicing to their business. Sharing examples of national approaches to supporting suppliers and establishing enduring models to sustain and increase eInvoicing may be helpful in that regard. (SME Digital innovation challenges are a good example of such an initiative.

• Assess in greater detail the reasons why other non-Paper options for invoice processing continue to dominate

What are the attributes of that make these other options (e.g. PDF via email) so attractive. How can similar attributes be established to enable EU standard eInvoicing – e.g. native support for the EN and CEF delivery building blocks in financial apps)

• Consider Targeted engagement with key stakeholder groups beyond traditional eInvoicing forums and community

Consider targeted communications to business representative bodies, financial systems providers, accountancy bodies, finance and tax authorities as well as other policy areas such as Procurement, Tax, Digital, Green. To help provide practical and joined up guidance on what we are all aiming to achieve and identify real steps that can help to move us forward together.

• Consider Digital Targets for Member States

Consider whether the application of Digital Targets (similar to Green targets) might prompt Member States to be more ambitious in taking steps to making EU Standard eInvoicing the predominant method of invoice processing. Targets would enabled the Commission to focus on outcomes rather than implementation choices such as whether to use a specific delivery network.

What are the attributes of that make these other options (e.g. PDF via email) so attractive : this is the key question.

For us (France, French National Forum) the main reason is simplicity and availability. An invoice can contain a lot of information, some for compliance reason to different regulation without any use for automation, some for business reason (marketing, operational details) which are first useful in case of manual process (for instance in case of dispute), some are managed by ERPs or Sales management solutions as structured data (so easy to provide in that form), some are managed as "free text".

The EN16931 was built under the constraints to fit with Public sector needs and capabilities to process them as there is an obligation to do it. To do so, we stated structurant assumptions such as 1 invoice 1 delivery 1 order, but also choices on business terms. The result is that we are missing some invoices that does not fit with the core. It is not a very big deal if we stay on an obligation to receive. It becomes more complex if we add an obligation to send as there is no solution for ALL invoices. And extension to B2B is much more complex and is the real target because B2G invoices represents only a few percent of invoices for companies.

By trying to transform all invoices in full structured invoices through the EN16931, we face at the same time the difficulty for all companies, especially SMEs, to provide all their invoices in such full structured format, and the difficulty for companies which are using additional business fields or business cases to restrain themselves to the core invoice.

In addition, using only secure exchange network like PEPPOL means a certain maturity and / or the use of 1 or many service providers to reach the different networks of counterparts.

Then, in order to stick in a full structured invoice process compliant to the EN16931, the only solution is to fill invoices manually in multitudes of Buyer's Portal, which is just a major change and a step backward for companies (including SMEs).

Apart from that, it is easy for any company to create a pdf invoice and to send it by email. And the Covid-19 pandemic showed that this way is the best and fast to handle business continuity when paper is not processable because not send or received, and when received in paper, people at home cannot process them.

It is then not a surprise that PDF invoice sent by email is so attractive, especially when SMEs are involved : Simple and available rapidly.

And this why if we want at the same time to have invoice process automation, which needs invoice data in a structured form, but not too much invoice data for simplicity and availability, and the possibility to reach rapidly 100% of paperless invoices for the benefit of all, we consider that a pragmatic solution is to propose hybrid documents as a first step to replace simple pdf. If we add most of the EN16931 Amendments proposed by CEN TC434 working group, we are close to be able to manage all business cases in B2B / B2G, with the invoice data necessary for automation. It means that we have a "playing field" sufficient to reach 100% invoices in a pdf form + a minimum mandatory information in a structured from at least useful for process automation and for Clearance / CTC needs, in addition to full structured invoices which remains the final target . On top of that, the market and the end users will have all the freedom to provide more structured information or even full structured information, and develop innovation and more added value.

Switch priorities : 100% paperless and more than 80% touchless with pragmatism, flexibility and lean process, instead of 100% full structured and finally a slow adoption.

With respect to Blockchain, finally there are signs of movement toward Interoperability, but I believe getting this to a BAU state is a long way off.
In the meantime, Blockchains represent 3 corner models, which we're already moving past with electronic trade interoperability as embodied in Peppol, EESPA, BPC, etc.

In my view the most sensible deployment of Blockchain for the medium-term is for value-added tangential use cases, such as smart contracting, KYC verification, smart financing, permissioned sharing of data elements with external parties to name a few. For sure there is lots of room for innovation and invention there still.

I think it would be a big step backwards however if we delayed interoperability, automation of the Order through Invoice process for Blockchain to catch up, in the hope it can do something different.

I believe we'll never get to only 1 way of doing things as that would again be a market and business restriction, but doing everything different is not working and we need change.

1) Introduce the “digital by default” principle in the VAT Directive and tax legislation in general
The VAT Directive originates from an age when most invoices were “analogic”, i.e. on paper or – even if electronic - not structured. Now digital (i.e. structured) invoices should be considered the normality (also because it's straightforward to transform a structured invoice in a human readable one when needed, but not the opposite). A “digital by default” principle should overcome the equal treatment principle, introduced in the last revision of the VAT Directive.
Continuous Transaction Controls (CTC) are effective ways to fight tax frauds and were made possible thanks to digitalization. Their use should be encouraged however fragmentation of requirements on the data that is requested by tax authorities to the business operators creates burdens especially for SMEs and – consequently – obstacles to the single market. Common standards should be defined and their support mandated to tax authorities, to avoid unjustified burdens on economic operators. EN 16931 can be the basis to define the information needed for CTC and standardized ways to extract automatically from EN 16931 based invoices (or direct use of invoices) can greatly simplify the task.
The development of an European standard for B2C invoices has been recently approved by CEN/TC 434 and its availability can extend to B2C the same concepts.
EN 16931 was possible thanks to the existence of a harmonized legal framework, the VAT Directive. The development of the standard put also the light on some national level specificities that still exist after 50 years of legislative efforts at European level, reflected in CIUS and Extensions that have been developed: they should be analysed and the result fed back to the policy level to improve harmonization and support “digital by default” principle.
To achieve this, EMSFEI should liaise with the VAT expert group to give to TAXUD the proper inputs.
These initiatives are expected to further greatly promote the use of structured e-invoicing in the private sector.

2) Extend Directive 55/2014 to include the transmission level
To further increase the adoption of Directive 55, the support of a baseline standard at the transmission level should be made mandatory for public authorities to receive invoices. This can be easily extended to support full digitalization of the supply chain documents. The CEF eDelivery building block and Peppol (that is spreading not only in Europe but also internationally) should be the technical basis, provided that they are fully based on international standards and compliance with eIDAS Regulation requirements guaranteed.

3) Systematic and reinforced use of international and European standards
The standardization system is global and the use of standards is of paramount importance for fair competition, it should be avoided that the European enterprises are regulated outside Europe. Many European initiatives such as Peppol are kept in high consideration outside Europe and – when relevant – standards developed in Europe should find their way in the international context. The standardization framework is addressed at policy level by the EU Regulation 1025/2012. In this framework the IPR issues should addressed to find a viable and definitive solution, taking into account that any obstacle to the use of standards create in the medium and long term additional costs

Andrea CACCIA I agree wholeheartedly there needs to be alignment, harmonization or at least recognition of mutual interests dependencies between the VAT Directive and eInvoicing legislation, especially taking the impact on the invoice issuer  / taxpayer into account.

The worst possible outcome would see each country coming up with non-interoperanble,  incompatible CTC pathways, "because they can" despite the standardisation of the Order - Invoicing flows.
The taxation policymakers may not know nor care about the invoice flow standardisation, and without proper education (ie from EU / Member states), then they may easily take a deliberately different approach.

On the baseline transmission in 55/2014 I also agree in general, but there are depandencies here. For example Portugal is using PT-CIUS as a payload, which is structually derived from EN, and not very far from Peppol BIS. For transport, they will use individual AS2 connections and not use Peppol network at all.
In order to register a divergent doc type in the Peppol network, it must be sponsored + managed via a country-level Peppol Authority, and if there is no PA, then its not possible.

Therefore if Portugal wanted to send /receive their docs in Peppol today, they cannot.

Until there is a way of getting national requirements reflected into and supported by the eDelivery / Interoperability Network especially if there is not a Peppol Authority, then there is a risk of fragmentation in spite of the Directive.

Lastly, the IP approach to the EN was poor, and was not supportive to desires to extend the EU standards globally.
Not running into this situation in future should be foundational to any changes to current policy.

Sharing the EESPA Executive Committee's message to the Market...

Covid-19 and the urgency of adopting paperless supply chain automation to accelerate payments to cash-strapped small suppliers 

Today’s circumstances demand radical action to keep the wheels of commerce turning and supply chains delivering. For this to happen there must be timely electronic invoicing, and certainty and acceleration of payments, especially to small suppliers.

Never have the arguments been so persuasive for removing paper and its replacement by safe and reliable digital processes for e-business and automated supply chains. There is current evidence of delays to invoice processing caused by remote working and the logistical handling of paper-based documents. Current dislocations act as a catalyst to digitize, as we will live with these new conditions for some time to come. E-invoicing provides full legal and commercial certainty, and is easy to use. Tools for its implementation are in common use. Service providers are a major influence on the stimulation of e-invoicing volumes.

As a trade association, EESPA represents 83 e-invoicing and supply chain automation specialists operating throughout Europe and beyond. A 2018 statistical survey among a group of EESPA members reported an annual volume of nearly 2 billion invoices. With recent growth trends, we estimate that our community is now handling an annual volume of over 3 billion invoices. We have members located near all business enterprises and they are willing to talk and demonstrate solutions.

Digital service providers play a key role in capturing and exchanging transactions generated from multiple clients in many diverse sectors.  The result is the delivery of tangible benefits to the trading eco-system through:

1. Digitizing Purchase-to-Pay (P2P) and Order-to-Cash (O2C) processes. Service providers can directly help businesses and public administrations and their suppliers, to reduce costs, increase efficiency and improve data quality and transparency. By delivering accurate and timely data, service providers help businesses make better decisions and eliminate the need for re-keying and data cleansing projects, whilst reducing cost and the risks of dislocation. Time to payment can be radically improved. Both larger economic enterprises and small and medium-sized businesses receive such benefits as does society through enhanced performance and competitiveness.
   
   
2. Removing trade and frictional barriers through the dematerialization of the entire chain of e-business transaction types exchanged between trading parties. These include purchase orders, logistics, invoices, and many other business documents. Service providers can connect businesses irrespective of their technical capabilities and act as trusted intermediaries that enable private sector enterprises and public administrations to transact easily, securely and transparently with each other. Buyers and suppliers can reap the benefits of electronic procurement and invoicing, efficient on-boarding to access digital services, and improvement in the certainty and timeliness of payments.
   
   
3. Through facilitating open data exchange, transactional data can be conveyed seamlessly between trading parties and their chosen service providers. With global reach we enable a trading environment with many fewer barriers. When working together as a community, it should be emphasized that there is a commitment to streamlining service provider collaboration to accelerate true interoperability and to make the on-boarding and activation of clients even smoother and more transparent, within the scope of client preferences and mandates. Service providers fuel the transaction flow through interoperable infrastructures such as the EESPA Model Interoperability Agreements, PEPPOL, and many national delivery networks, such as Chorus Pro in France and Sistema di Interscambio (SdI) in Italy. Member States use a variety of delivery networks and infrastructures for e-invoicing and related transactions. EESPA is engaged in many projects to enhance the smooth running of these infrastructures based on ‘state of the art’ tools and standards.
   
   
4. Value-added lies in the delivery processes and applications for the benefit of clients, not simply in the transport of transaction data; pure delivery of data can already work in a frictionless manner based on the technologies of the Internet. The real value proposition goes further and offers: end-to-end reach and interoperability, fiscal and contractual compliance, high automation levels, improved security and integrity, data validation and transformation, analytics and spend visibility, traceability, and potentially supply chain financing. Many businesses suffer from poor data quality, which impedes progress towards more powerful management controls, higher customer and supplier satisfaction, and better government reporting; indeed poor data quality often results from supply chains using an incompatible mix of both paper and digital processes.
   
   
5. Service providers are working closely with governments to eradicate business, technical and other barriers to digital processing. They support the digital policies of the European Union to automate the procurement activities of all public administrations in all Member States, as well as in the private sector. They play a key role supporting the central role of invoicing in generating tax revenues and supporting tax reporting processes. With a growing emphasis on ‘continuous transaction controls’ for VAT reporting at individual Member State level , service providers are closely engaged in helping their customers to navigate through the widely differing demands of such systems. By being at the forefront of digitization they generally make a key contribution to business, societal and environmental benefits, which lie at the heart of public policy in this area.

Many commercial enterprises and public administrations have some experience of digital processes in the supply chain. The real benefits come with critical mass and the ability to quickly respond to changing circumstances with agility and focus, including urgent situations. Service providers can discuss scale adoption as well as targeted programs to meet challenges in specific situations using well-targeted messages and case studies.

Please think about taking action today to protect trading integrity and create a valuable platform for the future.

EESPA Members are listed on our web-site https://eespa.eu/membership-list/

Marcus Laube and Bengt Nilsson, EESPA Co-Chairs

Some contribution into discussion from Finnish idealism point of view.

I like to start with some experience. In Finland our Central Government is able get about 90% of their purchase invoices in structured format. I have opinion that level is not an outcome from any specific infrastructure. It have reached through service providers and banks interoperability network where banks network is multilateral and non-bank service providers work on bilateral connection basis. Saying this I don’t argue at all that this level of usage could not be reached with other infrastructure frameworks as well. I don’t believe that thinking that one size fits all is the best possible approach.

One factor for high e-invoicing usage in Finland is that infrastructure and practice covers different segments B2B/B2G/B2C. It is very often that invoice issuers don’t send invoices only to one segment customers, but they have customers in all segments. It is very efficient for the issuer that they can use one and same infrastructure and invoice distribution method for all their customer segments.

Consumer invoicing might be one of the very important directions in EU to further enhance e-invoicing practice. Addressing is another important topic to concentrate more. ISO-6523 maintenance seems not working best possible way. Neither does CEF EAS code list look very robust including large number of arbitrary PEPPOL addresses.

Local – Global

Efficient public sector is really important. However, I don’t believe that public sector is the key driver for Europe competitiveness and success. Main thing is how our corporates are competitive in Global market. EU level standardization is very important and help our corporates to be competitive, but they face quite different demands outside. In many industries there are existing and well established infrastructures, standards and de-facto standards.

I believe it is good for our corporate competitiveness when EU is able to further harmonize e-invoicing and related areas (VAT reporting, bookkeeping, archiving) practices.

One challenge in current EN practice is that one can see growing diversity in EN standards country level implementations.  It is possible to end-up into situation where we have country based islands even though internally those island practices are based on same standards.

Good regulation – bad regulation

Regulation is often quick mean to achieve results. However, it is also often the case that regulation that is good and needed in one place is perhaps not suitable at all in other place. In best situation regulation is guiding into wished direction and it is widely accepted among those whose operations and behavior are impacted. In Finland we for example take a step further when implementing Directive of e-invoicing in public procurement into our local legislation. In our local law it was stated that buyer have right to get an EN standard contents electronic invoice. The law does not mandate to use electronic invoicing, but it gives buyers more power to demand electronic invoices and still leave freedom for trading parties to agree.

One can obviously say that this is not good enough to fight against VAT gap and tax fraud with this kind of guiding regulation. Very true, but it depends what is the citizens (corporate and persons) attitude towards taxes. If the attitude is that taxes are good for me and society at large it is very different from attitude where taxes shall be avoided by all means. As a consequence it is obvious that there is need for different type and level of regulation.

Standardization

CEN-TC434 have done very good work and it represent continuity and solid basis for standardization. E-invoicing is such a basic operation that it requires trusted foundation.

From this point of view CEF role in certain EN code set maintenance and its’ status as a project is not best possible. It is also important to realize quite an important responsibility at those code list maintenance. Some small looking changes from capital to small case letters etc. may cause huge amount of useless work in ERP systems.

A few thoughts

People are ready for e-invoice

Lets consider a problematic persona in the journey to e-invoice. Xavier, an owner of a small auto shop, a school drop out, 50 years old. He is silly, but he can use a mobile. With all the probability, he receives text or WhatsApp messages and replies to them. He takes pictures and organize them. So, silly Xavier is a genius, an expert, if we consider the skills level required to deal with e-invoice.

e-invoice mess should be transparent to users: two buttons are enough

Has Xavier any idea of the myriad of companies, formats and protocols the email follows between his flat and his girlfriend next door? No, Xavier needs help with all that mess. He uses an app that hides the complexity of the email ecosystem. In fact, we can almost say that to swim in the e-invoice sea he only needs two buttons in the procurement/financial apps he already uses, one to send, one to receive. From Xavier eyes -- and this post is all about eyes we should care about -- the current offer it's not attractive! Far from it!

SW houses are also ready for e-invoice, and they are a key player

And of course EasySoft, the sw house that makes the POS that Xavi uses, is also ready for e-invoice, they are waiting for their moment. Their day will arrive when the cost and effort to link to e-invoice is minimum, and the cost of not linking is their slowly dead. We cannot expect thousands of sw houses to participate in e-invoice if the required investment and risk is high. This is a key take away. Those who care about concurrence must look at this zone of the market in first place. It's here, in the financial/procurement/sailing area that we will see blood. This is where we find diversity, where we find jobs. And those actors are the ones that will spread the e-invoice message to the most remote places. Therefore we must focus on creating an e-invoice environment for EasySoft as clear and attractive as water in the desert.

We need to things:

1) A building. (Building blocks are not enough)

Xavi can say "Ok, I will email you that" but he shouldn't say "Ok, I will e-invoice you", because nobody knows the meaning of "e-invoice you". The email ecosystem is here a good analogy of what is missing. We miss a whole, to whom you are (or not) part. Like email or Peppol. Of course e-Invoice and e-delivery are relevant achievements, but they must merge in ONE thing for us to move on. And this merge is urgent to stop divergent strategies (AS2, PDF, …).

2) Shrink transaction costs associated with the use of e-invoice to email levels

Be it the huge financial costs associated with Messaging Services Handlers. Be it the technical complexity to start using EN for the SW houses. All this must be compressed.

And,

• We all know that e-invoice will be universally adopted. And we know why: (1) paper invoices nail commercial conversation to the paper world, preventing it to fly in the digital air and, (2) paper or digital images of invoices put humans doing things they are bad at, and prevent computers of doing things they are good at. And we also know that EN will be involved. Has we also know that if the move takes place in the coming years, EU will drive the process, hopefully collaborating with others areas of the world.
• Email is a definitive proof that if you have data structured you have it visible and printable. No need to handle both, side by side (a extremely dangerous approach, by the way). There is no pdf inside emails, and you can see them, print them.
• We don't to have to make Xavier aware of e-invoice: the minute invoice will be attractive to operators, someone will tell them, we can count on it.
• The so called social apps are a definitive proof that an huge adoption does not depends on an universally mandatory regime or obligation. People jump into Facebooks, twitters and the like just because they want. Some buy, others not.
• There's no need for alignment between fiscal rules and e-invoice. Fiscal rules must rewrite themselves in e-invoice terms. (This a hard one).

Sorry, for my English, for being so long, for being late

GS1 in Europe is really willing to contribute to this interesting debate.

We prepared a document which is publicly available here

https://www.gs1.eu/news/european-commission-re-launches-eivoincing-dialogue

For those who want to read more about GS1, please visit https://www.gs1.eu/

For the EDI strategy https://www.gs1.org/docs/EDI/GS1_EDI_strategy_2018-2020.pdf

Looking forward to your comments to our document.

Further to today's very interesting and well organised discussion on future of e-invoicing, I'd like to share my contribution to the topic "

SMEs and private sector onboarding" for further comment.

I remember a discussion some years ago between the European Commission and service providers when e-invoicing in Europe accounted for about 10% of total volume. The Commission put forward the view that service providers had failed to deliver mass adoption of e-invoices and that public sector intervention was necessary to accelerate this process. I understand that e-invoicing now accounts for about 20% of total volume.  I do not know what proportion of B2G invoicing is now based on the European norm. I know that in Ireland the volume is very low. I think that the target should be 100%.  This should be a priority as well as use of standardised invoice status feedback.

Economic activity insights through the analysis of pervasive e-invoice data could make a significant contribution to future public policy decisions.

The European SME landscape is big and diverse with 23 million SMEs employing less than 10 staff. It is served by more than 10,000 software companies and several hundred e-invoicing service providers.

SMEs should be incentivised to adopt digital business practice. This requires public sector investment.

Potential incentives might include faster payment cycles in both public and private sectors resulting in lower working capital requirements for SMEs. Awareness building of benefits is another key activity that could be funded.

A recent IMF paper estimated that the European shadow economy accounts for 15-35% of GDP across member states. The GDP of the EU in 2018 was estimated at €16.6 trillion. A 2% reduction of shadow economy activity through mass adoption of SME e-invoicing would yield €70 billion in additional taxes (assuming an average of 21.3%).

Some member states have achieved very high levels of private sector participation in their B2G and B2B e-invoicing initiatives. What SME focused research exists and what does this research tell us?

Thank you very much to CEF team for organizing this webinar. As Ken, I'd like to share my contribution to the topic.

SMEs and private sector onboarding" for further comment.

Despite the European Norm and the obligation to receive it for all public entities in Europe, we have seen that it does not automatically create a massive move to send.

It is because invoices are created by the Senders. And I see 2 main reasons for this low adoption:

• First, B2G invoices are only a few percent of invoices sent by Private Sectors Entities. In the Suppliers’ eyes, especially for SMEs, it is just an additional channel for a small percentage of their invoices, in addition to what they try to do for their large private Buyers.
• Second, Companies, and especially SMEs are far to be able to provide a full structured e-invoice, only because they do not manage all their invoice information as data, but only a part of it.

99% of companies are SMEs. And they send and receive more than 50% of invoices in Europe. Clearly, without them, it is not possible to get the critical mass needed for a large adoption of e-invoices for the benefit of ALL.

The Covid-19 crisis emphasized the need to switch paperless and potentially touchless, not only for invoices, but also for the whole supply chain processes. Minds are ready and it must be simple and efficient for SMEs.

Then, if we agree that there is NOW an urgent need to focus on B2B and SMEs adoption of electronic invoices, with a special focus on the sending side, what is the fastest way to reach this objective taking in account the capabilities of SMEs:

• First, Support 100% sending B2B / B2G ability by adding common extension to the European Norm only to address ALL CURRENT B2B business cases. We are not far from it and it can be done as an option to be used by public entities, only to allow B2B adoption.
• Secund, Find a better solution than simple PDF invoices sent by email. Hybrid documents based on EN16931 compliant invoice data subset are a pragmatic one for companies that are only able to manage a part of their invoice information as structured data.
• Third, Include in interoperability networks and frameworks, simple and affordable solutions for SMEs to connect, taking in account their capabilities and knowledge, such as email gateways or opensource API (first and last mile).
• Fourth, Promote added value for Suppliers, such as invoice response message through 4 corner model interoperability networks, which are key for treasury forecast and payment acceleration (including financial services and dynamic discounting).
• And finally Think about incentives, payment delay reduction, obligation to send on B2G, or through B2B mandate in parallel to CTC / Clearance models, which need to be harmonized in order to avoid the creation of new barriers for private companies.

Dear colleagues, 

First and foremost, I would like to thank you again for all these quality contributions and debates. Based on your inputs, the CEF eInvoicing team was able to tailor the June 2020 Open Session about eInvoicing Transmission, the European Standard on eInvoicing and SMEs and Private Sector onboarding. 

I am pleased to announce the publication of an article on "eInvoicing transmission" on CEF Digital. This article is based on your major contributions and involvement in this series of activities. I particularly would like to thank Charles BRYANT, Cyrille SAUTEREAU, Maarten DANIELSand Martin FORSBERGwho have greatly contributed to the writing of this article. 

The CEF eInvoicing team is now organising a second Open Session about SMEs and Private Sector onboarding. It is scheduled for 24 November! We aim to go deeper into the topic. Following the same scenario as for the June session, we opened an online contribution page : https://ec.europa.eu/digital-building-blocks/sites/x/iQSIEQ . I kindly invite you to share your concrete projects, use cases, and lessons learnt in the comments! Looking forward to tailoring this November Open Session together with you! 

Best wishes!