08 Jan 2013 The EU and e-invoicing – top 3 priorities for 2013
The debate on these pages on e-invoicing and interoperability has been fascinating. It was inspired by the EU’s consultation designed to solicit views in order that e-invoicing in public procurement can be stimulated and encouraged. But there’s more to this than interoperability and we think that there are three things that the EU can do to get electronic invoicing really motoring in Europe – mandate, regulate and educate.
Give people an option to do something they don’t understand or that they are afraid of and the option to do nothing becomes attractive.
The business case for e-invoicing stacked up over a decade ago but despite this we see a paltry penetration of about 15%. Sure, this will grow. Other economic changes are driving change but if the EU economy is to enjoy the economic boost that could be delivered by a truly networked economy, it needs to act and it needs to act decisively and promptly.
Mexico and Brazil are seeing huge growth in adoption of e-invoicing for a single reason – they’ve mandated it. Mandating e-invoicing isn’t like mandating a new tax. That hurts business. Mandating e-invoicing is mandating common sense. That will act as a timely fillip to business if it’s done now. Mandating e-invoicing would act as major driver for the service providers to put aside their differences and make the e-invoicing eco-system work. Sure there are problems with interoperability but opening up the market by mandating its use will provide an attractive motive to find solutions.
Regulation comes at a cost. It creates red tape. Ideally we could do without regulation but the EU should leave nothing to chance. Anti-competitive, protectionist or exploitative behavior by dominant players or cartels could scupper the best laid plans and following a mandate, the EU should position itself prominently to step in at short notice when necessary. The market should be left in no doubt that the EU means what it says when it declares war on the cost of doing business.
The technical issues have been overcome. The business case is complete. All that is left is the perception that it won’t work.
There is a genuine fear from some businesses that they will fall foul of the laws relating to e-invoicing. There is uncertainty about how the rules, which were supposed to be simple, will apply – especially for cross border transactions. And there is an understandable doubt from some quarters that it will actually work. Today, even very large established businesses retain a paper process as a backup to their e-invoicing process because their tax people are afraid to make a call.
It shouldn’t be left to the buyers or suppliers to work out these issues. It shouldn’t be left to the service providers. The member states within the EU should be evangelizing e-invoicing. They should be educating the market and playing a full role in demystifying the new world.
Pete Loughlin can be found on twitter @peteloughlin