Companies must be ready as e-invoicing mandates look set to change across Europe

Billtrust, a B2B order-to-cash software market leader, today announced imminent changes to European e-invoicing mandates which can affect compliance for B2B companies.

In May 2019, the UK Government issued The Public Procurement Regulations 2019, which included new rules for e-invoicing usage and was the implementation of a European directive. Changes in other European countries will impact UK companies but so will how the UK Government determines how e-invoicing will work for those companies working with suppliers and clients within the European bloc after Brexit.

Belgium, France and Germany have already signalled that changes are planned as have Poland, Italy and Luxembourg. This is a worldwide trend. More than 100 different countries across the world are mandating e-invoicing with varying local standards and differences in scope (B2B, B2C, B2G) in a variety of digital formats and using a range of technologies.

On the rise and complexity of e-invoicing

The global e-invoicing landscape is evolving rapidly. The push from governments and tax authorities towards paperless, data-driven and data-focused administrations with the ambition to reduce tax evasion and plug the VAT gap is set to continue into 2023. An Imarc Group report showed that global e-invoicing has doubled in value within the last two years, with a CAGR of 21.5%. Leading analysts are expecting the electronic invoicing market to quadruple by 2035. Close to 50 percent of that growth is expected to come from European countries.

Countries are working to different time frames and mandates and so it is understandable that companies could find compliance confusing especially when operating internationally and having to deal with a multitude of AP channels. Keeping track of the latest developments and updates to these mandates can be difficult, with so many languages and authorities to monitor globally. There are calls for standardisation but, in the meantime, companies who work within Europe need guidance.

“As the current invoicing process lacks structured data formats and delivery channels, only global service providers can help European companies to ensure compliance by helping them with automated solutions that can generate, present, and deliver invoices in a fully compliant manner,” states Marco Eeman, General Manager of Billtrust Europe.

In 2023 and 2024, major changes are imminent in Germany, France and Belgium:

• In Germany, B2G invoicing is already mandatory. The various states (Länder) and the Federal Government each have autonomy in deciding how suppliers have to invoice them for public contracts. Some Länder – Baden-Württemberg, Hamburg and Saarland – have already implemented B2G e-invoicing. Others still have to do so. There are discussions within the German Parliament concerning a switch to a B2B e-invoicing mandate in a bid to reduce Germany’s VAT gap. But so far nothing has been decided.
• In France, B2G e-invoicing is mandatory and all economic operators must submit compliant e- invoices to central authorities, regional authorities and local authorities. France is preparing to mandate B2B e-invoicing and it is expected that e-invoicing will become mandatory, across all sectors, for large enterprises from 1st July, 2024; for medium-sized enterprises from 1st January, 2025 and for the rest of the taxpayers from 1st January, 2026. All sizes of companies in France will also be required to receive e-invoices from 1st July, 2024.
• In Belgium, B2G e-invoicing was made mandatory in April 2019. Suppliers of all government levels must now submit e-invoices. The Belgian Government has confirmed it will make B2B electronic invoicing mandatory on a countrywide basis within a broader tax reform project between July 2024- 2025. Belgium would likely use PEPPOL – the European standard – to adapt their current post-audit model to a clearance style model around the same time.

With the majority of current e-invoicing software focusing on e-mail and PDFs – and thus lacking the flexibility and adaptability that the many changes in mandates require, it is not surprising that companies are worried about their invoicing compliance. Billtrust Europe can help them understand the changes, guide them through the regional or country disparities and help them to comply.

“In anticipation of an eventual standardisation, a solution is needed for companies to cope with the major changes in the mandatory field. End-to-end cash service providers – such as the one we offer – compete on all different levels of the financial process of a company, whether it’s risk, billing, collections, controlling or reporting; and can therefore provide a helping hand,” says Marco Eeman.

More information on Billtrust and its Business Payments Network in Europe: https://www.billtrust.com

The three mandates of today’s e-invoicing landscape

The three mandates that every business should understand about today’s e-invoicing landscape are buyer mandates, government mandates, and clearance mandates.

Buyer mandates are driven by customer demand and used by large businesses to enforce their suppliers to deliver invoices in a specific digital format and through the AP provider’s bespoke delivery portal or channel.

Government mandates were designed for cost reduction, increased revenue, and greater efficiency as governments are making a push toward paperless, data-driven, and data-focused administrations. All companies trading with those governments have to implement their solutions, to continue their mutual business effectively. In Europe, we’ve seen this trend grow significantly in recent years.

The third type is taxing authority mandates and more specifically the real-time clearance mandates, first seen in Chile, Brazil, and Italy in Europe. These are types of mandates for e-invoicing enforced by government tax authorities to reduce tax evasion and plug the VAT gap (the difference between the expected amount of tax revenue and the actual amounts collected each year). With these mandates suppliers and buyers, mainly in B2B transactions and in some cases in B2C, have to send invoice data (or reports) in electronic format to the tax authorities for real-time and transparent validation and auditing.

About Billtrust

Billtrust is a leading provider of cloud-based software and integrated payment

processing solutions that simplify and automate B2B commerce. The order-to-cash process is broken and relies on conventional processes that are outdated, inefficient, manual, and largely paper based. Billtrust is at the forefront of the digital transformation of the order-to-cash process, providing mission-critical solutions that span credit decisions and monitoring, online ordering, invoice delivery, payments and remittance capture, invoicing, cash application, and collections. For more information, visit Billtrust.com.