By Sami Nikula
I recently attended the PEPPOL conference in Rome and the one thing that stood out to me is that the e-invoicing revolution is well underway!
For a while now, large volume invoice issuers and receivers have been experiencing the benefits of e-invoicing but, perhaps most excitingly, this is now being realized by businesses of any sizes, and PEPPOL is playing a huge role.
PEPPOL is now moving from a project phase into production. For four years the project has been about building the foundations for EU-wide exchange of electronic invoices and business documents amongst private and public businesses.
In terms of e-invoicing adoption, small countries are leading the way. In Norway, Denmark and Austria the development and adaptation of PEPPOL and e-invoicing have been relatively rapid and national governments within these countries have already stated that e-invoicing is or will be mandatory. In Denmark a mandate was introduced in 2005; Norway will demand PEPPOL e-invoices from the beginning of July 2012; and the latest from Austria is that from 1st January 2014, e-invoices will be the only way to send invoices to the federal government.
Large economies, like Italy and France, are also preparing for PEPPOL – pilots are complete and the introduction is in the first stages. But, so far, there have been no mandates to use PEPPOL or e-invoices. This is largely because it first requires a willingness to change, and on a large scale this is more difficult to achieve – a simple mandate won’t work alone. It’s not just about converting invoices to electronic format but it is pushing, agreeing and getting everyone on-board – at a local, regional and national level.
The question therefore is should the use of PEPPOL or e-invoicing be made mandatory or not? From the government point of view, implementing a law makes it easier but it requires the availability of solutions in the market that all parties can use for sending (and receiving) e-invoices – not something governments have the time or capacity to deal with on a national scale.
And, is it necessary to implement laws to make changes? It can help but the passing of a new law takes time. It does however mean everyone knows when the switchover happens!
But coming back to my earlier point, e-invoicing adoption requires a change in mindset. There are countries where high penetration of e-invoices has been achieved without a law dictating what companies have to do. For example, in Finland, the government demands e-invoices from its suppliers – there is not a law dictating this but the purchasing power of buyers. The same is done by many businesses. Of course, this requires a certain level of maturity in the markets, but it usually means someone has considered whether the solutions are already in place for all companies to start e-invoicing from day one. E-invoicing should simplify B2B commerce, not hinder it.
This is why PEPPOL is important. It’s an EU driven project pushing for a mindset change around e-invoicing. If national standards, formats and procedures and cross-border e-invoicing have caused some grey hairs in the past, it’s going to be easier from now on. PEPPOL has worked with e-invoicing experts (including ourselves) to provide the tools to combine national infrastructure and a way into a European wide e-invoice network.
PEPPOL as a project will come to an end in August this year. But, the era of Open PEPPOL begins on the 1st of September. The EU driven project will be reborn as a non-profit, user/business driven organization with a target to enable sustainable growth of electronic transactions. Will e-invoicing be the dominant way of invoicing in 2020 as now predicted by many? We surely hope so. But work still needs to be done around how we make it as easy as possible for all parties.