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SME e-Invoicing Adoption in Europe – Part 3 The Role of Government

Many governments have, or are considering, mandating electronic invoicing and any company doing business with the public sector will be required to issue their invoices electronically. Governments have different objectives, within Europe the aim is to capture efficiencies and cost savings but for Latin America, where tax collection is an issue, the objective is to provide transparency and capture tax revenues.

Within the UK there is strong interest in moving central government institutions to electronic invoicing and while a mandate is not being considered yet, through our work at the UK National e-Invoicing Forum (UKNeF) we were able to ensure e-Invoicing was referenced in HM Governments recently published ‘Information Economy’ strategy.  The UK government has a stated objective of ‘being easier to do business with’ and they recognise that e-Invoicing will help them achieve this. Electronic invoicing is aligned with government initiatives across procurement, shared services, late payment and access to finance for SMES and the UKNeF are working with the Department of Business, Innovation and Skills (BIS) to help educate and promote its use across central government and the wider UK public sector.

The reason e-Invoicing is now on the UK government’s agenda is the active engagement with the private sector through interest groups such as the UKNeF, the Forum of Private Business (FPB), the British Chambers of Commerce (BCC) and the Institute of Credit Management (ICM). By providing open forums for discussion all stakeholders are able to provide their unique perspectives ensuring the best possible outcome.

In my opinion this is the best way government can promote e-Invoicing to the wider business community. By adopting their own strategy and engaging with SME Influencers with expert opinions, such as chartered accountants, financial advisors and industry bodies, all parties can help educate companies. By ensuring those who influence business, especially SMEs, the attitude of ‘we have always done it this way’ can be addressed and the needs and capabilities of SMEs can be assessed by experts and influencers.

The current European Commission’s Multi-Stakeholder e-Invoicing Forum (EMSF) is taking a similar approach, and while the viewpoints sometimes are opposed, all parties gain insight and work to achieve the best way forward. The Commission’s objective is to ensure that all transactions are electronic and is a ‘standard’ mode for public procurement. With 99% of all organisations within the European Union being SMEs, and between 45-65% of these companies doing business with government an EC public sector mandate on e-Procurement/e-Invoicing will surely propel adoption.

However, how these public sector systems are implemented varies from country to country, and typically (as in the B2B world) each country’s program brings a brand new standard to use. One project that is attempting to bring together national initiatives in e-Procurement and e-Invoicing across Europe is the Pan-European Public Procurement online project – PEPPOL.

Until recently, PEPPOL was one of the Commission’s large scale pilot (LSP) programs. These LSPs use EC money to build industry solutions that are proof of concepts designed to harmonise cross-border digital public services and aim to build a connected European Union to achieve the Digital Single Market. Your perspective on these programs will probably depend on whether you are left or right of the fence politically. Does government need to build systems and publicly promote them rather than private sector  solutions? Or should they remain neutral by promoting best practise, by legislating, or by letting the market decide? Alternatively, will all businesses benefit from government funded EU-wide initiatives outside  the reach of the private sector?

As a tax-payer this is a difficult one for me. While I see the good intentions of projects such as PEPPOL , if they encroach on the private sector marketplace it appears  that they have a distinct advantage  through their connections and  ability to promote through government. This seems to be is an ever increasingly reality in Europe,  I am content to compete as long as the marketplace remains fair and competitive, and we all follow the same rules – after all, I need to earn a living!

There is significant evidence that in countries where governments are role models that e-Invoicing adoption is significantly higher, so let’s move forward in a co-operative way that benefits SMEs and both the public and private sectors.

Countries with e-Invoicing mandates:

  • Austria
  • Kazakhstan
  • Macedonia
  • Norway
  • Greece
  • United States
  • Turkey
  • Brazil
  • Mexico
  • Norway
  • Italy
  • Spain
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