Results of the Expert Group on e-Invoicing

Bo HaraldChairEC Expert Group on e-Invoicing

Electronic invoicing in Europe – Madrid, 27-28.4.2010State Secretariat of Telecommunications and the Information Society

Expert Group on e-Invoicing - Mission

Defined in Commission Decision of 31 October 2007:

§ Identify shortcomings in current regulatory framework§ Define e-Invoicing business requirements§ Address relevant e-invoicing data elements (and linkages)§ Propose responsibilities for standardisation bodies and time

schedule§ Propose a European e-Invoicing Framework - a common

conceptual structure

Definition and componentsof the European e-Invoicing Framework

Results

1. Awareness of fundamentalimportance of e-invoicing for:- Competitiveness of EU enterprises- Cost savings in public sectors- Service innovations- Learning 2. Recommendations3. Next layer visibility - e-Invoicing is not dematerializationonly – but an enabling platform for automating administrative processes atlarge – a new paradigm

1. Value of information in structured form apparent

2. Productivity improvement potential – 250bn > business case for service providers and customers (Deutsche Bank Research report –54bn€ pa in Germany alone)

3. Demographic challenges – liberating for more productive work much needed

Reasons for fast adoption

202035

millionsmaller

25 m larger

Dilemma nbr 1: EU workforce nose-diving

Digitalization key to automation. Productivity improvement potential 250bn with e-invoicing

Automation liberates much needed resources for productive work

Automation leads to real time completion of processes

6

4. SME-opportunities - “eliminating” half of administrative cost – less

economy of scale disadvantages of being small- becoming integrated e-parts of value chains- improved cash flow, cheaper financing and real

time visibility5. Very large savings and service improvement

potential in public sector

Reasons for fast adoption

1. Massive cost savings and service improvement –income potential for service providers – business case for investments

2. Innovation platform for further layers of services3. Reasons for building the network – key to win-

win4. Reasons for taking responsibility for Society at

Large

Reasons for service ramp-up

2. Key Recommendations

1: Meet the needs of SMEs as a priority focus.

2: Harmonise and clarify the legal and VAT framework based on equal treatment of paper and electronic.

3: Maximise interoperability and reach.

4: All actors to adopt a common invoice standard and data model- the UN/CEFACT CII v.2.

5: Establish an organisational process for implementation of the EEIF.

6: Widely promote and communicate the benefits.

Progress made

Banking sector could do more

VAT-directive for equal treatment

Much work needed

Great progress in ISO

EC to establish PAN-EU Multi stakeholder Forum and recommend member states to do same

Much work needed inSME and public sector

Time for EU to address the needs of SMEs

• Small enterprises cannot afford to invest in advanced ERP systems

• Small enterprises cannot afford to communicate in x number of standards to their counterparts

• Small enterprises cannot afford to support connectivity to x number of counterparties

• Service providers should take all this in account –provide the simplest interfaces

3. Vision and next stages

• E-invoicing becomes predominant within 5-8 years, in some countries earlier.

• Harmonised and clear legal environment will exist across the EU.

• Trading parties have wide choice of convenient solutions and services- bilateral, 3-corner and 4-corner models in use.

• Standards adopted based on single data model- UN/CEFACT CII.

• Investments made in ERP and supply chain systems and in low cost and user friendly solutions. For SME’s no investment in IT solutions or IT skills needed.

• Expected dematerialisation of other processes.

More than dematerialization – cutting administrative costs in all dimensions

Very important to demonstrate full potential for SMEs:

1.Automated accounting2.Automated and real time cash flow estimates 3.Automated and real time VAT4.Automated invoice financing5.Automated and unified reporting to public sectorAll achieved by moving to e-invoicing.

Target: Cut enterprise administrative cost in half

v Build on DG Enterprise 25% target by 2012. 50% suitable next target for EC, Member state and MSH Forum. How soon? 2014?

v This would speed up migration to e-invoicing and make it voluntary (deadlines for unstructured invoicing and transparent pricing still needed)

v Corresponding cost saving and fraud elimination targets could also be set for report handling and supervision in public sector

Summary• E-invoicing is just one step – but the foundation for

wide scale automation of administrative processes• SMEs should be given more time for business – less for

administration• Cutting administrative costs in half is possible• If we start now we may be ready by the time work force

shortage sets in in earnest• The questions to ask: • Are we helping enterprises – aggressively enough?• Is the public sector acting in a model role • Should this not be the next milestone for the Single

Market?