Are you Ready for the E-Invoicing Wave?

Following the global economic downturn of 2008 and the consequent negative impact on public finances, governments globally intensified efforts to identify process and back office inefficiencies. A process that has driven a wide range of national and international initiatives to mandate compulsory ‘e-Invoicing’ automation across the public sector - and one that significantly impacts private sector businesses. While some of these trends were visible prior to 2008, the regulatory momentum has gathered increasing pace over the past seven years, with governmental bodies in several major economies now leading private companies in payables automation.

Whether you are an SME providing goods or services to a local authority body, or a multi-national corporate enterprise trading across multiple territories and jurisdictions, all businesses will increasingly need to comply with a raft of e-Invoicing regulatory requirements in order to continue doing business. Within Europe, several countries now have compulsory e-Invoicing programmes (Sweden, Norway, Spain and Denmark). Likewise, several Latin American countries have government mandated e-Invoicing systems where non-compliance can lead to the legal withholding of payment together with additional sanctions, including fines and tax repayments. At an EU-level, new European ‘eProcurement Directives’ are starting to have an impact on member states’ regulatory framework.

New Powers

In the UK, Stephen McPartland MP initiated an independent Parliamentary Inquiry on e-Invoicing Adoption within the UK Public Sector. The powers to enforce vendors servicing the public sector to adopt e-Invoicing are now contained within the Small Business, Enterprise and Employment Act 2015, which received final Royal Assent and passed into law in March last year. The Act contains a regulation-making power which allows the UK Government to mandate a range of measures relating to public procurement in the future, including the use of electronic invoices. 

After several years’ trialling electronic invoicing initiatives, the United States Government has finally mandated compulsory e-Invoicing for the entire Federal Government and its many thousands of private sector suppliers. Businesses around the globe will be unable to trade with the single largest purchaser of goods and services in the United States – the Federal Government – unless they implement e-Invoicing processes by 2018. 

As global regulatory e-Invoicing standards continue to be clarified and become finalised over the coming months, your organisation should be fully prepared to work with the format specifications wherever you do business. By adopting a more flexible, efficient and secure payments infrastructure, you have the opportunity to benefit from beyond-compliance assurance, providing your business with the end-to-end cash visibility that will be key in minimising risk, driving down costs and managing business expansion.