Parliamentary inquiry on e-invoicing invoicing – a session of contrasts

Parliamentary inquiry on e-invoicing invoicing – a session of contrasts

Posted by Pete Loughlin in AP Automation, e-invoicing, Electronic Invoicing, Public Sector Procurement, Purchase to Pay 30 Jan 2014

On Monday morning I had what I thought was a slight cold. Sniffing, I headed to London. By late morning, it was a proper cold and by the time I arrived in Westminster for the second sitting of Stephen McPartland’s parliamentary inquiry into e-invoicing, I’d developed full blown man-flu.

This was a session characterised by contrasts. Forthright opinions together with cautiously expressed views. Good news mixed with disappointing revelations. But overall a great second session.

Purchasing Insight logoTogether with Stephen, I was joined by the same group as last time, Emmanouil Schizas, Senior Economic Analyst at the Association of Chartered Certified Accountants, a highly articulate, calmly spoken and intelligent individual; Professor Dermot  Cahill, an authority on public procurement law who had just returned from what sounded like a fascinating trip to Nigeria (I must speak to him further about this); Ian Taylor, a former Member of Parliament and no stranger to technology discussions; Chris Godwin, a most charming chap who founded the UK National e-invoicing Forum (UKNeF) and last but not least, our co-chairperson Philip Aiken, Chairman of Aveva, Australian and quite the diplomat – he only mentioned the Ashes 4 times.

First up was Sid Vasili from Invapay together with Ian Burdon from Elcom and regular contributor to Purchasing Insight. Those that know Sid will not be surprised that he was forthright in expressing his views. His no-nonsense approach impressed the committee. “I feel that a direct approach is always the best policy” he explained later, “or else we could be faffing about for years and getting nowhere with the Tax Payers picking up unnecessary costs.” Hear, hear I say.

Ian Burdon is a man of words and he used most of them on Monday. His insights based on his own experience as a civil servant and his current role at Elcom were high valuable.

Next up were a group of civil servants, Kerry Jones from BIS, Martin Leverington Procurement policy adviser at the Cabinet Office and Sam Rowbury, Director of Public Procurement Policy, also at the Cabinet Office. I found their submissions fascinating – not so much because they brought a new insight to the table from quite a different angle, but the caution with which they addressed questions. Sid Vasili would never have made a civil servant.

Finally, Malcolm Harbour, Member of the European Parliament, brought good news and less good news. The good news was that he was able to confirm that the European Commission had given its approval to support e-invoicing by developing a single standard to support interoperability across the EU. This has been reported widely but it was great hearing the interpretation directly from the MEP. The less good news was the description of the timescales to develop and implement the standard. My heart sank, and I think a few others did too, when we heard that it would take 3 years to deliver the standard and that would be followed by another 3 years to deploy it.

Set your alarm clock for 2020.

I shouldn’t be depressed about it. 2020 is the worst case scenario and I have enough faith in some of the European governments to feel optimistic that they’ll accelerate these timescales. After all, the estimated savings are €2.3 billion and every year that there’s a delay there’s another €2.3 billion down the plug hole. Even the most cautious politician would not want to defend that level of waste.

The written and oral submissions are now complete and the hard work of delivering a document that summarises our findings now begins. I’m looking forward to working with the team to get this out – hopefully this side of Easter.

That is of course assuming that I didn’t give them all man-flu and they refuse to be in the same as me ever again.

Pete Loughlin can be found on twitter @peteloughlin

  • rob liddel January 31, 2014 at 9:55 am /

    Really good to have visibility on this Parliamentary Inquiry from your comments Pete. Normally these things are all carried out in “smoke filled rooms” ! Being a pragmatist (like Sid). One question is why do we need yet another e-invoicing standard that we will have to wait 3 years for. We have so many standards already why do we need another one? Surely it would be lot more cost effective to adopt an existing one albeit it in a more pragmatic way ?

  • Pete Loughlin January 31, 2014 at 10:20 am /

    I’m not a “standards” person Rob, but like you, I feel instinctively uncomfortable about the creation of a new one.

    I can see the sense in a new “semantic” standard – one that defines the e-invoicing message vocabulary. This would facilitate interoperability without reinventing the wheel. As I understand it though, the new standard will also be a “syntactic” standard – one that also defines the structure and format of the electronic messages. That does feel like the reinvention of a wheel to me. I’m not entirely confident that my understanding is correct though. Charles Bryant (EESPA) tells me that the intention is to “ensure that the semantics are reflected in a number of well-used syntactical standards”. This is much more in line with the common sense gut feel that I think we share Rob.

    Like I say, I’m not a standards person and those that have formulated these plans are, so I respect their expertise, but I have to say, their thinking had better be sound if it’s to survive intact the 6 years it will take for it to reach fruition.

  • rob liddel January 31, 2014 at 10:32 am /

    I think the problem with leaving it 6 years is that by that time people will have adopted de-facto standards that may make it redundant. Since there is now such a momentum behind e-invoicing I think this will inevitably happen. for example the document standards that originated in the 80’s and 90’s (DCOM etc) were completely wiped out by Microsoft with their Word product. In Sweden we are already seeing this with Svefaktura. Its not a great format but its simple and most people can exchange it.

  • Friso de Jong January 31, 2014 at 1:48 pm /

    “it would take 3 years to deliver the standard and that would be followed by another 3 years to deploy it”

    What does it mean? That this move to e-invoicing is way too late to help make the 2020 EU e-invoicing ambition a reality… It’s time for mandatory EU e-invoicing.

  • Douwe Lycklama February 3, 2014 at 6:58 pm /

    Hi Pete,

    Are you aware of the ‘scheme approach’ we are taking in NL? So providers and ERP vendors organise (multilateral) roaming (incl standards) for B/b/G/c invoices, both inboud and outbound. Similar to large two sided market infrastructures such as payments, email and mobile telephony. The government has two roles: act as launching client and facilitate/fund the creation of the scheme. See . Is open for UK participants as well.

    This should move the debate away from nitty gritty semantics discussions and stalling development. Look forward to your thoughts as i’m not an expert on the UK situation. Douwe

  • Ronald Duncan February 11, 2014 at 7:11 pm /

    Hi All,

    It is a lot better than you think. The EU does not want to create a new standard, it just wants to agree the minimum data that needs to be in a standard for it to work.

    I edited the latest version of BASDA XML the most commonly used standard, and we will be part of the process of ensuring that the standard is compliant, and my expectation is that it will not require any changes, and if it does they will be trivial.

    BASDA XML was available in 1999, and is implemented by all the major finance systems. We have been einvoicing since EDI came out in the 80’s and there is no barrier to mass adoption today.

    Best regards
    Ronald Duncan
    Chairman CloudBuy

  • Ken Clark February 12, 2014 at 11:17 am /

    From the language Pete uses in his post above it sounds like another 6 more years of non-commitment from the EU.
    When I hear that “the European Commission had given its approval to support e-invoicing by developing a single standard to support interoperability across the EU.” What I hear is – nothing new. There is no lack of standards today, the European E-Invoicing Service Providers Association among others have already decided on, approved and implemented standards specifically for interoperability. BASDA XML is not as prevalent as you might think – in manufacturing, retail, CPG, pharma and hi-tec industries it is not used between organisations at all – they each favour their own industry-specific standards and short of major external pressure (ie, a mandate) that will never change.
    The issue with e-Invoicing uptake is far more complex than interoperability and standards. There are a number of more serious issues which – in my experience talking to Fortune 1000 organisations – continue to cause resistance in the market.
    First there is the ongoing confusion caused by the 2010/45/EC directive which introduced yet another compliance method – we now have at least four methods to choose from in the EU (digital signature, EDI, “business controls” and of course for B2G PEPPOL) and there is little possibility today of interoperability between these methods – regardless of how many standard the EU creates.
    Secondly it is still too technically challenging for the large volume of SME’s out there to implement e-Invoicing in a cost-effective manner.
    Signed PDF remains the most prevalent method of e-Invoicing in the EU today and offers few benefits beyond the paper invoice.
    There is also the issue that the cost savings everyone touts for e-Invoicing will only be seen AFTER you have eliminated the majority of paper invoices from your supply chain. In the interim what businesses actually see is a short term increase in invoicing costs as they have to maintain both paper and electronic processes. The cost savings don’t materialise until a large proportion of your partners are switched to electronic. With adoption rates still so low in the EU many organisations just don’t feel confident enough to make that initial investment until they are pushed by large customers to do so.
    Sadly it seems the EU continues to pay lip-service to the e-Invoicing issue. I agree with Sid Vasili from Invapay – “we could be faffing about for years and getting nowhere”.
    Friso de Jong has a point – a mandate may be the only way. In countries that have mandated e-Invoicing the above issues do not slow uptake. In Latin America and Turkey, for example, there is no confusion as to what method to adopt, no confusion about what standard to use, and the potential penalties make it more cost-effective for everyone – from the smallest SME up to the largest enterprise – to adopt e-Invoicing rather than not so there is no doubt that the potential cost savings can be achieved.

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