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E-invoicing in public procurement
DG MARKT
11 April 2013
difi Conference on Electronic Invoicing
Oslo, Norway
Why an e-invoicing initiative?
- e-Invoicing offers significant economic benefits
- MS becoming active in this area • Several already made e-invoicing mandatory
• Others developing national e-invoincing standards and/or launching pilot projects
Result:
- Multiple standards and formats in e-invoicing & lack of interoperability
• Higher costs and additional complexity for enterprises which need to support several standards
• Disincentive for participation in cross-border public procurement
Fragmentation of the Single Market
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Political context
- European Council of June 2012 – "priority should be given to
measures aimed at further developing cross-border online trade, including by facilitating the transition to e-invoicing"
- EP resolution of April 2012 – "make e-invoicing in procurement mandatory by 2016"
- Annual Growth Survey 2013: priority on modernisation of public administration & "Ensuring the widespread, interoperable digitalisation of public administration"
- Single Market Act II: Key action 10: Make electronic invoicing the standard invoicing mode for public procurement.
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Policy context
- Digital Agenda
• Promotes the development of the digital society across the EU
• e-Government as one of the main elements
- Revision of the public procurement Directives
• Modernisation and streamlining of public procurement rules
• Introduction of mandatory e-procurement
• Negotiations on-going in the Council and the EP
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A solid basis exists…
- Communication "Reaping the benefits of electronic invoicing for Europe – COM(2010)712
• Expert Group on e-invoicing
• EU Multi-Stakeholder Forum on e-invoicing
- Council Directive on the common system of value added tax (2010/45/EU)
- Communication "A strategy for e-procurement" – COM(2012)179
- Commission co-funded projects:
• PEPPOL
• e-SENS
• e-PRIOR
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Objective of the initiative
Improve the functioning of the Single Market by introducing mechanisms
to diminish market access barriers in cross-border public procurement
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The different options
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Interoperable
technical solution
proposed to the
market?
Invoices in line with
the chosen technical
solution must be
accepted?
Electronic submission
required?
Only the chosen
technical solution
allowed?
Option (1): No new EU
action
NO NO NO NO
Option (2): Free-choice
approach
YES NO NO NO
Option (3): Selective
conversion to e-
invoicing
YES NO/YES
(YES - only if a Member
State or contracting
authority mandates the
use of e-invoicing/
electronic submission)
NO/YES
(YES - only if a Member
State or contracting
authority mandates the
use of e-invoicing/
electronic submission)
NO
Option (4): Obligatory
acceptance
YES YES NO NO
Option (5): Full
conversion to e-
invoicing
YES YES YES NO
Option (6): Full
harmonisation
YES YES YES YES
Scope (I)
- Linked to some aspects of the public procurement directives…
• Focus is on above-threshold public procurement
- … but with a more holistic approach
• Public procurement as "publish-to-pay" process
- Should nevertheless aim to maximise potential benefits
• all Contracting Authorities (central as well as regional/local) and Contracting Entities
• all types of invoices covered by the directives
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Scope (II)
- Opportunities for spillovers into areas not covered by the initiative
• vertical – to below-threshold procurement
• horizontal - into B2B sector
• to other processes (e-ordering, e-payments, e-archiving…)
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Where are we now? (I)
- Impact Assessment on-going
• Public consultation concluded
• Internal consultations underway
• Scope, options, timeline…
- Adoption by College currently planned for Q2 2013
• … as announced in the SMA II and Roadmap
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Where are we now? (II)
- Public consultation (22 October 2012 – 14 January 2013)
• More than 700 replies received
• Good sectoral and geographic breakdown
• Results generally supportive of EU action
- Questionnaire to national e-invoicing fora (via EMSF) circulated in October 2013
• Replies received from 19 Member States and one institution
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Public consultation
- Very good sectoral representation
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Number of replies
Good geographic representation…
…but some countries under-represented in relative terms
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Use of e-invoicing
- 59% of companies / institutions already use e-invoicing
- Principal reasons given for not using it:
• "never considered it" (29%)
• laws / regulations not clear (25%)
• too many different standards (24%)
- Main reason for microenterprises - insufficient number of invoices (40%)
•
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Very strong support for EU action in e-invoicing in public procurement
- 89% in favour of "steps to promote the use of e-invoicing in
public procurement"
- 86% in favour of "steps to promote interoperability in e-invoicing in public procurement"
- Greater support for mandatory instruments to stimulate uptake and for voluntary to improve interoperability
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Most would like to see action soon
"If mandatory use of e-invoices was introduced in public procurement, what would be a realistic timescale for introducing such an obligation?"
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Support for a very broad scope of intervention
- 99% support including the entire public sector
- 84% support for applying it to all types of invoices
- Of those preferring limiting the application of e-invoicing:
• 67% want to limit use to invoices above a certain monetary value
• 41% want to use it only for invoices stemming from above-threshold public procurement
• 41% prefer to limit its use only to certain sectors
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Reasons for supporting – expected benefits
- Stakeholders see a wide range of benefits…
(of 88% of respondents supporting EU action to promote uptake of e-invoicing in public procurement)
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Reasons for opposing EU action
- No single reason for opposing EU action in e-invocing dominates (of 12% of respondents opposing EU action to promote uptake of e-invoicing in public procurement)
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Preconditions for success
- Availability of "common standard"
• Whatever approach is chosen, it would set a general framework & high-level requirements
• Details left to be worked out by standardisation bodies
• MS will still be able to use their national e-invoicing systems
- Need to leverage existing experiences from existing national B2G and relevant B2B e-invoicing schemes (best practices) and EU-level projects
• e.g. CEN BII, PEPPOL (inter-operability)
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Timeline of transition
- 2010 Communication aimed to make e-invoicing to
become "the predominant form of invoicing by 2020"
- EP has called to make e-invoicing mandatory in public procurement by 2016
- Replies to our public consultation shows strong support for rapid transition (2016-2018)
- Possibility to align timeline with that of e-procurement
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