While electronic invoicing (e-invoicing) is outside the scope of the European Payments Council (EPC), it is recognised that there is a strong linkage between e-invoicing and the single euro payments area (SEPA) programme. The EPC Newsletter provides regular updates on progress achieved in this area. Related developments continue to take shape and there is increasing interest by banks in finding a role in the market for e-invoicing products and services.
Setting the Scene for E-invoicing
Several initiatives designed to implement the six key recommendations spelled out in the final report of the European Commission’s (EC) Expert Group on e-invoicing are now underway. These recommendations aim at creating a legal and operational environment that will allow e-invoicing to become the predominant invoicing method in the next five to eight years. The Spanish presidency heading the Council in the first half of 2010 and the EC held a major conference on e-invoicing in Madrid during April 2010. The findings and recommendations of the Expert Group were discussed. Participants made a number of additional suggestions, but the key points appeared to find general support. The EC is now giving consideration to the various recommendations with a view to taking additional action and it is likely that further announcements will follow later in the year.
Harmonised Legal and Tax Environment
Mass adoption of e-invoicing requires a harmonised legal and tax environment. The Council of the EU adopted on 13 July 2010 the Directive 2010/45/EU, amending Directive 2006/112/EC on the common system of value added tax (VAT) as regards the rules on invoicing. This includes measures to simplify e-invoicing based on equal treatment between paper and electronic invoices. From the time of its adoption (expected by 2013), trading parties will be able to place full reliance on business controls for VAT compliance. Techniques such as electronic data interchange (EDI) and electronic signatures will be used on a voluntary basis. The new directive will be a major driver of the further take-up of e-invoicing.
Third CEN Workshop on E-invoicing
The third European Committee for Standardisation (CEN) workshop on e-invoicing started on its two-year programme of work. The Expert Group had recommended that CEN take forward many of the standards recommendations made in its final report and the workshop is rising to this challenge by forming work streams on small and medium-sized enterprise (SME) processes, compliance and interoperability, as well as promoting awareness and information sharing. CEN is also planning to play a role in preparing a set of implementation guidelines for the UN/CEFACT Cross Industry Invoice (CII).
A further development on the CII standard is the work going on to express the CII in the ISO 20022 XML syntax, which will bring value to the role of the financial industry in e-invoicing. There appears to be a growing consensus that CII is the way forward for the e-invoice content standard.
SWIFT Pilot is in the Pipeline
SWIFT is in the process of organising a pilot with an ad hoc group of banks and non-bank players to test the use of the SWIFT network carrying invoice messages. SWIFT is participating in the Euro Banking Association’s (EBA) work, in order to ensure full alignment.
Exploring Business Opportunities
The EBA has published a white paper for consultation among its membership. This white paper discusses the business rationale for e-invoicing and the role of banks, proposes a network model and reviews the result of a proof of concept carried out with industry service providers. The results of the consultation should be completed and publicly available by the autumn of 2010.
At EBAday, held in May 2010 in Luxembourg, conference delegates participated in a debate on e-invoicing and the financial supply chain. Panellists reviewed the value proposition for banks and expressed various positions on where the real value lies – not so much in the simple process of transmitting invoices but in building products around supply chain finance, payments and information services based on the transaction flow.
The EBA Working Group plans to continue its programme of work in relation to interoperability, standards and developing the value proposition, and in the process is reaching out to other industry initiatives and players.
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