Setting the scene for e-Invoicing
Several initiatives are now underway designed to implement the six key recommendations spelled out in the Final Report of the European Commission's Expert Group on e-Invoicing (see link included below). These recommendations aim at creating a legal and operational environment which 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 European Commission held a major conference on e-Invoicing in Madrid during April 2010. The findings and recommendations of the Expert Group on e-Invoicing were discussed. A number of additional suggestions were made by participants, but the key points appeared to find general support. The Commission 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 European Union adopted on 13 July 2010 the Directive amending Directive 2006/112/EC on the common system of value added tax, 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 compliance. Techniques such as 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 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 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 ISO20022 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
SWIFT1 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 in carrying invoice messages. SWIFT is participating in 's work, in order to ensure full alignment.
Exploring business opportunities
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 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.
Charles Bryant is Senior Adviser to the Euro Banking Association () and a Member of the Expert Group on e-Invoicing.
E-invoicing 2010 -European Market Guide jointly prepared and updated by and Innopay. It provides readers with general information about e-invoicing and the market for services and solutions. In addition, this market guide reflects issues which need to be addressed.
The Council of the European Union adopted on the 13 July the Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing. More information is available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/115789.pdf .
Related article in previous issue:
1 SWIFT's role is two-fold. It provides the proprietary communications platform, products and services that allow its customers to connect and exchange financial information securely and reliably. It also acts as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual interest. SWIFT has its headquarters in Belgium and has offices in the world's major financial centres and developing markets. SWIFT is solely a carrier of messages. It does not hold funds nor does it manage accounts on behalf of customers, nor does it store financial information on an on-going basis. As a data carrier, SWIFT transports messages between two financial institutions. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity.
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