The European Commission says it wants to see e-invoicing become the predominant method for businesses to invoice in Europe by 2020 in a move that could save the European Union €240bn over a six-year period.
The EU says that providing invoice data electronically could allow businesses to benefit from shorter payment delays, fewer errors, reduced printing and postage costs.
Most importantly, structured e-invoices facilitate business process integration from purchase to payment, meaning that invoices could be sent, received and processed without manual intervention.
Currently, exchanging e-invoices is often complex and costly, in particular across borders and for SMEs.
In Ireland, inaction on the part of the Government and businesses themselves to pursue electronic payments is costing the economy an estimated €1bn a year.
At present, 78pc of all transactions in the Irish economy are cheque-based, undermining the country’s ambitions of being a smart economy. The Irish public service is the worst offender, paying staff and suppliers predominantly by cheque and granting workers time off to go to the bank and lodge their old-fashioned cheques.
According to a study carried out on behalf of the Commission in 2008, replacing regular paper invoices by e-invoices across the EU could result in about €240bn in savings over a six-year period.
European multi-stakeholder forum on e-invoicing
The European Commission has decided to set-up a European multi-stakeholder forum on e-invoicing.
Michel Barnier, Commissioner for the Internal Market and Services, said: "E-invoicing has the potential to make a big difference, for businesses, consumers and European trade as a whole. The benefits in terms of saving time and money are fully in line with our Europe 2020 strategy and with the Digital Agenda for Europe in particular."
Vice-president Antonio Tajani, Commissioner for Industry and Entrepreneurship, added: "Revolutionising the way we pay bills, e-invoicing will boost the overall competitiveness of European Companies, especially SMEs."
Existing rules governing e-invoicing in Europe are not uniform. As such, the potential benefits of e-invoicing still remain to a large extent unexploited.
Digital Agenda for Europe
As part of the Digital Agenda for Europe there are four priorities:
· Ensuring a consistent legal environment for e-invoicing
· Achieving mass market adoption by getting SMEs on board
· Stimulating an environment that creates maximum reach between trading partners exchanging invoices
· Promoting a common e-invoicing standard
In 2011, the Commission will propose a revision of the e-signature directive to provide cross-border recognition of secure e-authentication systems.
The Commission will launch two new projects in the framework of the Competitiveness and Innovation Programme (CIP) to help specific sectors to agree on interoperable processes for the electronic exchange of data and documents along the different steps of the supply chain (including e-invoicing).
· The European Committee for Standardisation (CEN), a major provider of European Standards and technical specifications, will develop a Code of Practice, including consistent terminology and clearly defined roles and responsibilities for actors involved in e-invoicing.
· CEN will design implementation guidelines for a cross-industry invoice data model and collaborate with international standards organisations, such as UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business) and ISO (International Organisation for Standardisation).
To facilitate the monitoring and implementation of these actions, the Commission has invited Member States to establish national multi-stakeholder fora on e-invoicing by June 2011. The Commission will complement this by setting up a stakeholder forum on e-invoicing at EU level.
As the invoice precedes the payment in any purchasing transaction, there is also a strong link with SEPA (Single Euro Payments Area). SEPA aims at integrating and standardising electronic payments across the EU. SEPA and further standardisation of e-invoicing therefore have mutually reinforcing benefits.
The environmental benefits of e-invoicing in terms of reducing paper consumption and energy costs are also significant.