The top 3 e-invoicing myths

The top 3 e-invoicing myths

Posted by Pete Loughlin in Compliance, e-invoicing, Electronic Invoicing 27 Mar 2012

A few e-invoicing myths got busted last week – in my brain at least. It was during the course of a fascinating conversation with Markus Hornburg and, I’m a little embarrassed to admit, I’ve been perpetuating one of these myths myself for ages. So I thought it would be useful and interesting to share what I think are the top 3 e-invoicing myths.

Purchasing Insight logoMyth 1 – e-invoicing service providers that are compliant in more than 50 countries.

It doesn’t matter whether they say 50 or 500 the reality is there’s no such thing as a compliant service provider. Only the process that you implement in your organization can be compliant. The service provider may offer a platform that supports a compliant process but they are not responsible for compliance – you are.

Myth 2 – Qualified digital signatures are the biggest obstacle to mass adoption of e-invoicing.

Germany, as well as other EU member states, requires that sellers use a qualified digital certificate. This requires production of ID and a physical signature from a “natural person”, usually a senior executive. The certificate needs to be renewed at regular intervals, typically every couple of years. That is simply too much bureaucracy for many suppliers. This isn’t a myth. It’s true – but it’s not necessary and this process need not be an obstacle.

The responsibility for the digital certification can be delegated to the service provider. It doesn’t need to be a headache and in fact, digital signatures are one of the easiest tools to implement to ensure integrity of electronic messages. The perception that they are an obstacle is founded on a misunderstanding of the technology, the legislation and best practice.

Myth number 3 –The world of e-invoicing (in Europe) will become easier in 2013.

There may be less insistence on digital signatures and pdf invoices to come and this should be  welcomed but actually, digital signatures have never been a real issue (see myth 2) and, where paper invoices are received today, in 2013, pdf invoices will almost certainly be printed out and handled manually. No process saving and no improved carbon foot print.

  • Michael Bruening March 27, 2012 at 8:54 am /

    Pete,

    you may have anticipated a comment from a Tradeshifter about digital signatures, so here is one, my personal view not speaking for Tradeshift as a company.

    I can agree that digital signatures, especially qualified signatures are not the hurdle per se. You can put all the responsibility and complexity on a service provider and just purchase it together with your e-invoicing service. But here is the problem, you need to buy it, so additional cost is involved. And this cost is the actual obstacle to e-invoicing adoption. If you burden the cost on the supplier side who anyway has little benefits from joining a customer’s e-invoicing program, his motivation will diminish. The invoice receiver on the other hand has such a big volume that the total cost will be significant and the business case then probably is not very attractive.

    I don’t want to iterate earlier discussions but since EU has removed the requirement for digital signatures to be compliant, it just makes no sense to put this extra cost in any equation of a business case. Better business cases and less (cost) hurdles for e-invoices will definitely propel the adoption to e-invoicing. Because of that I have to disagree with myth 3 as well. It may take a little longer than 2013 because we also have some hurdles in the mindsets to overcome but the EU directive to drop signatures will have an impact.

    Best regards,
    Michael

  • Pete Loughlin March 27, 2012 at 8:58 am /

    Thanks for the comment Michael. I think you make a valid point that cost is certainly one of the issues but I’d stand by my comment that the technical complexity and the hassle of a qualified signature have been wrongly percieved as a reason not to adopt e-invoicing.

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