Invoicing is central to the cash flow and liquidity of any
trading organisation. Small improvements in efficiency can improve
working capital, reduce gearing and bring better liquidity. The
report by the Commission's Informal Task Force on e-Invoicing cites
research claiming that the average processing cost of a paper
invoice across Europe is around €30. E-invoicing can cut that cost
by 80%, it says.
A legal framework for e-invoicing is in place currently, but it
does not work as it should, according to the report, which was
published in July. Consequently, private and public sector
organisations continue their reliance upon paper invoices.
The E-invoicing Directive, passed in 2001, required Member
States to recognise the validity of electronic invoices and allow
electronic storage. It set out mandatory items of information that
must be included on every invoice; but it gave each Member State
discretion to decide the details of the implementing
legislation.
This discretion has resulted in diverse national laws. Some
countries' regimes are very strict and mistakes may result in
e-invoices being classed as non-compliant for tax purposes,
triggering penalties that can include fines and even
imprisonment.
The report gives examples of the problems that exist today. In
some countries, electronic invoices are subject to rigorous
security requirements that the report describes as "overkill".
Germany, Italy, Poland, Portugal, Spain and Hungary require digital
signatures on e-invoices. These so-called qualified signatures must
be based on digital certificates issued to natural persons – i.e.
they cannot be based on a company's certificate, according to the
report.
Storage requirements for e-invoices also vary. Estonia allows
complete freedom on the storage location for electronic invoices;
Germany allows storage only in an EU Member State. The period for
which e-invoices must be stored varies too: the mandatory period is
three years in France and 10 years in Germany.
The report says the legal position is so complex for buyers and
sellers because "e-invoicing lies at the crossroads of several
areas of legislation – mainly VAT, accounting, payment,
authentication, company transparency and data retention."
The report recommends documenting all legal issues and
developing the EEI Framework as a formal Recommendation of the
European Commission. Current barriers should be addressed within a
period of 18 months, it says.
The initial focus will be the Business to Business (B2B) market,
followed by Business to Consumer (B2C) and Government to Citizen
(G2C).
