European legislative changes, ready-to-use infrastructures and existing data standards are the key drivers for achieving a wide adoption of electronic invoicing in Europe. In 2017 we will see more countries mandating the use of electronic invoicing from Business to Governments (B2G). This will also foster electronic invoicing amongst private companies (B2B) where the silos and barriers created by the old EDI service providers will disappear.
The take up of electronic invoicing in Europe has been slow and irregular. One of the main problems is that the lack of a single common European approach has obliged the most active Member States to develop their own solutions, resulting in a fragmented market.
In 2007 a series of workshops were created in the European Committee for Standardisation (CEN) to define a common set of electronic documents. These workshops were called Business Interoperable Interfaces (BII) and the electronic invoice was one of the main documents to be standardised.
During those years, some Member States mandated their own national standards on electronic invoicing, focused only on their local regulations, creating ad-hoc communication infrastructures and routing mechanisms. This happened in Spain, Italy, Austria or Sweden, to mention only some examples. The lack of a common standard implied a significant cost, redundant investments and obstacles to cross-border trade.
The results of the CEN BII workshops, though, were used as the starting point for a Large Scale Pilot funded by the European Commission. This project was called ‘Pan European Public Procurement On-Line’ (PEPPOL) and its aim was to set up an open network to enable the exchange of electronic documents with public entities. The PEPPOL project can be considered a big success because it was able to move from a Large Scale Project to a sustainable association, OpenPEPPOL AISBL, with members supporting its administration and management.
PEPPOL is based on three main principles:
1. Electronic document specifications based on the results of the CEN BII workshops.
2. A transport infrastructure based on a 4-Corner model for the open exchange of documents.
3. The Transport Infrastructure Agreement signed between PEPPOL Authorities and Access points or Registry owners.
Several countries started adopting PEPPOL and its usage began to grow. Countries such as Norway decided to mandate its use while countries such as Sweden and Austria decided to add it to their own national initiatives.
While the success of the PEPPOL network is real, the number of cross-border invoices is still fairly low due basically to the lack of adoption amongst some member states. The basis for the Pan-European exchange of electronic invoices was there, but the legacy of national legislations and technical deployments still has the ability to hamper the general cross-border use of electronic invoicing.
In 2014, the European Parliament published the Directive 2014/55/EU to avoid an increase of non-interoperable national solutions. The goal of the Directive was to prevent the fragmentation of the internal market and to boost cross-border interoperability. The Directive requested the European Committee for Standardisation (CEN) to draft a European Norm on electronic invoicing. Once published, public entities in Europe will be obliged to accept electronic invoices following its semantic model and using the accepted mandatory syntaxes.
A CEN Technical Committee (TC) was created in 2014 to start working on this project. After two years of work, in the last technical meeting the list of mandatory syntaxes was agreed: ISO/IEC 19845:2015 UBL 2.1 and UN/CEFACT CII D11A.
The foreseen schedule for the European Norm 16931 (its official EN number) is to be published around summer of 2017. If this milestone is achieved, public entities across Europe will have a deadline to adopt it. The Directive prescribes that “Member States shall adopt, publish and apply the laws, regulations and administrative provisions necessary to comply with this Directive at the latest by 27 November 2018”.
The existence of the standard with technical documentation and its legal endorsement, however, may be not enough to make private companies and public entities start implementing and using it. This may be one of the reasons why the European Commission has created the Connecting Europe Facility (CEF) programme. This programme will fund projects intended to adopt both the new European standard and a common transport infrastructure.
The CEF eInvoicing Digital Service Infrastructure (DSI) is the part of the CEF programme that targets the adoption of the European standard as the way to deploy electronic invoicing solutions and the eDelivery DSI is devoted to support the implementation of a Pan European transport infrastructure. The CEF programmes will last until 2020, and its funds should help Europe moving towards the Digital Single Market.
PEPPOL BIS was gaining traction as it shared the same principles of the European Norm. It also shares much of the semantic model and the UBL syntax. Countries using PEPPOL have made the best choice, as they will end up being compliant with the European Norm easily. For those not using PEPPOL, the CEF funding may help them in their required next step. If we are to reach true interoperability, national standards should be banned, promoting only a single format to be exchanged across all of Europe.
The more countries adopting the European norm, the more users will require services, pushing ERP vendors and service providers to adopt it in their systems. Those countries lagging behind will have a negative impact on their own business networks and on their ability to compete abroad.
The onus is now on all Member States to implement the European Norm ‘as is’ without adding national requirements to finally take the next step towards true interoperability, to a truly competitive landscape, and to an eInvoicing market accessible by all entities.
Next year we will see the European standard being published and the take up of the CEF funding programmes. If you are a contracting authority, be aware that you will be required to adapt to this European standard no later than 2020.
If you are a private company, you now have the opportunity to deploy electronic invoicing for all your customers and suppliers. The European standard will affect in principle the public sector, but we foresee its adoption also in the private sector, therefore the suggestion is to implement it everywhere as a best practice.
As we move further ahead, we can also think about additional business processes and electronic documents to come. Electronic ordering and electronic tendering are the next steps in the digitisation of public procurement in Europe, and with the barriers already being removed, why not start now?
About Oriol Bausà
Founder of Invinet, Oriol has a degree on ICT and a master on telecommunications. Oriol has been an active participant in several standardisation bodies such as OASIS and CEN and has been involved in PEPPOL from the beginning. Ha has created the B2BRouter electronic invoice and PEPPOL access service.
B2BRouter is the electronic document exchange service created by Invinet. The easy to use electronic invoice portal targets both SMEs and large companies that can integrate their ERP systems through B2B interfaces. B2BRouter allows to receive orders and send invoices through the PEPPOL network to your Government or Health sector customers.
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