The Billentis Study

Analysts at Billentis stated that multinational companies are leveraging, on average, between three and 20 service providers dealing with their inbound electronic invoices, and between 20 and 160 service providers for outbound electronic invoicing and electronic reporting.

While the potential cost savings and gains in process efficiency from digitizing and automating seem clear, resistance to adoption remains. According to survey results, the most cited challenges were technical concerns, including data security (54%), integration of internal systems (45%), cost of implementation (39%) and overall complexity of technology (39%). This confirms that e-Invoicing is an integration challenge, one that is best addressed at the “edge” of your business, where you connect your internal applications to your external partners.

The internal shifting landscape of siloed applications, combined with external pressures from different regional mandates, creates genuine concerns for businesses. It’s no surprise that research shows 84 percent of companies would find it valuable to have a single global partner to overcome e-Invoicing challenges. Companies had a long list of capabilities they expected from this partner, such as integration and onboarding expertise, delivered in a cloud-based environment which has built-in data security and offering contractual assurances of compliance.

Countless Solutions

According to Billentis, the number of vendors acting as electronic invoicing service providers is now approaching 2,000 globally. The solutions offered by these vendors fall into different high-level categories, such as enterprise software (on-premises), services/SaaS/cloud solutions, or niche applications, which are typically complementary to broader solutions but provide limited scope. ERP vendors, supply chain automation suites, selling and fulfillment (sales order management), P2P suites/e-Procurement (Sourcing/Spend), accounts payable, accounts receivable, document capture/automation (OCR), tax compliance, supply chain finance, payments/financial services, and BPO (business process outsourcing) …the list goes on.

All of these solution classes only offer a partial solution to the many and varied e-Invoicing challenges. While the focus of these solutions is different, when it comes to the electronic invoice process, they all provide similar functionality. Unfortunately, they effectively duplicate cost and add complexity in terms of technical deployment, support, compliance maintenance and archive for tax audit purposes.

Why SPS Commerce is the right choice

As the market leader in B2B integration globally, SPS Commerce is uniquely positioned to solve the e-Invoicing problem. SPS Commerce offers scalability and flexibility to clients, with a range of solutions for small businesses up to the largest enterprises. The e-Invoicing solution is delivered as a unified, cloud-based enterprise platform, SPS Commerce has active Invoices with Compliance, which embeds e-Invoicing capabilities into the B2B platform. This platform can immediately connect companies to an existing global community of customers, suppliers and other supply chain partners with tried and tested integrations. Companies can switch from unsecured and risky email/PDF-based invoice processes to fully automated e-Invoicing. This meets data security requirements while enabling closer collaboration with supply chain partners.

In addition to invoices, SPS Commerce platform enables businesses to also exchange their related business documents over the platform to meet industry standards and comply with local regulations and government mandates. The platform accommodates any document format, technology standard or communication protocol to be able to automatically deliver outbound receivables e-Invoices as well as supporting inbound accounts payable flows.

Built in analytics services can ensure that e-Invoicing plays an integrated role in the improvement of finance and supply chain processes. It reduces the costs and risks associated with manual invoice processes and siloed point solutions while enhancing cashflow through reduction of days sales outstanding. Late payment penalties are reduced, and companies gain increased access to early payment discounts, so a global electronic invoicing platform such as SPS Commerce delivers a rapid return on investment that pays for itself.

Designed with the needs of global multinationals in mind, Active Invoices with Compliance provides companies with a single, global enterprise e-Invoicing platform backed by expert services to facilitate trading with a community of partners and suppliers worldwide.

Current State of E-Invoicing in Malta

As of now, e-invoicing is not mandatory in Malta. However, the Maltese government is actively promoting the adoption of e-invoicing as part of its Digital Malta national strategy. The strategy is a result of Malta’s participation in the EU-funded “eInvoicing4Islands” project, which was implemented between June 2019 and Q3 2021.

Despite the lack of a mandatory e-invoicing platform, the Treasury Department, with the support of the Malta Information Technology Agency (MITA), is in the process of implementing a Corporate Financial Management Solution (CFMS). This solution will incorporate the processing of e-invoices across the central government.

Status on the implementation of the European Standard on e-Invoicing

The e-Invoicing committee composed of government stakeholders in Malta agreed to adopt the Peppol BIS Billing 3.0 and its Core Invoice Usage Specification (CIUS). To be able to do this Malta has become an end-user member with OpenPeppol.

Both central government and sub-central authorities will be able to receive e-Invoices via the Peppol e-Delivery network or via a suppliers’ portal. In sub-central authorities consists of various solutions in the different entities. Therefore, existing solutions can remain in use. In this context, contracting authorities and entities (as defined in the e-Invoicing Directive) will be expected to arrange access to or establish an e-Invoicing capability that supports receiving and processing of European Standard e-Invoices via the Peppol eDelivery network.

Approach for Receiving and Processing E-Invoices

Since Malta will adopt the Peppol BIS Billing 3.0, it will be able to receive e-Invoices via the Peppol e-Delivery network. Moreover, a suppliers’ portal will be made available, and suppliers could input their invoice details and send them to the relative Ministry, Department, Entity, or Local Council. This portal is warranted since most suppliers still do not have their systems ready to automatically generate an e-invoice.

The benefits of electronic invoicing are maximized when the generation, sending, transmission, reception, and processing of an invoice can be fully automated. Widespread adoption of electronic invoicing within the EU is expected to lead to significant economic benefits.

The move from paper to fully automated e-Invoices allows public entities buying goods or services to reduce business costs and contribute to the modernization of domestic payment infrastructure. This is achieved by:

• Automated validation and importation of information into payment and accounting systems, which results in faster and more cost-effective processing, eliminating the need for manual data entry.
• Efficient control over cash flow, which is essential for businesses to maintain operations.
• Reducing delivery and print costs, and removing the need for paper archives, envelopes, paper, and stamps, lowering material costs and environmental impact.
• Removing manual data entry and reducing data errors, significantly reducing the time spent on balancing accounts and searching for discrepancies.
• Increasing the transparency of the entire Procure-to-Pay (P2P) cycle, enabling businesses to have a clearer view of the entire process.
• Offering suppliers’ access to all eInvoice status information, which significantly reduces the time spent on managing supplier inquiries.

No electronic signature is required for e-Invoices, and the archiving period amounts to 6 years.

The Future of E-Invoicing in Malta

The European Commission has adopted a proposal for digital reporting requirements and e-invoicing, which is set to modernize European VAT in the coming years. This proposal highlights the European Commission’s ambitious vision for how VAT reporting should embrace digitization, with an implementation timeline set to commence at the beginning of 2028.

The proposal includes an obligation to issue structured e-invoices for all intra-EU supplies of goods and services, and to transmit data from these invoices to the relevant national VAT authorities’ electronic portal, in near real-time. This would require significant systems and process changes, and investment from all businesses engaged in cross-border trade within the EU.

Conclusion

Embrace the digital revolution and consider SPS Commerce as your leading international E-invoicing provider.

Whether you’re a business owner, an accountant, or a curious learner, staying informed by subscribing to our newsletter about e-invoicing developments and more can empower you to make better decisions and streamline your financial processes.

Questions about E-invoicing? Contact our experts!

The Global Landscape for E-invoicing Compliance

The global landscape for e-Invoicing compliance is as diverse as the countries that constitute it. Each country has its own set of regulations and standards for e-invoicing. For instance, the European Union has introduced the European Standard for e-Invoicing, while countries like Mexico and Brazil have their own specific requirements.

Moreover, this landscape is not static. It is continually evolving with new regulations being introduced and existing ones being updated. Staying abreast of these changes is not just a regulatory necessity but also a strategic advantage.

Europe/EU

The 2014 Public Procurement Directive required all EU member states to mandate that government agencies be “e-invoicing-ready,” i.e. to have the capability to receive electronic invoices from suppliers. Several EU countries took a step beyond and forced suppliers to issue e-invoices for all business to government (B2G) supplies of goods.

As a CTC approach supersedes the post-audit model, early B2G mandates are now being joined by business to business (B2B) equivalents. Turkey and Italy have mature mandates for B2B electronic invoicing and France, Germany, Spain, Belgium and Poland are implementing mandates. Little standardization has been seen around e-invoicing mandates, as few countries are implementing common standards like using Peppol. Some countries focusing on e-reporting as a means of combining e-Invoicing with other tax documentation and transactional data have adopted SAF-T (Standard Audit File for Tax).

North America

Canada has a VAT regime, but tax fraud is low. The United States has no VAT regime. In both countries therefore, regulations are minimal. Despite the lack of regulatory obstacles and the many potential benefits, voluntary take-up of e-Invoicing amongst private companies has been slow. The OMB (Office of Management and Budget) has expressed an interest in B2G e-Invoicing, and the Federal Reserve launched an initiative under the “Business Payments Coalition” to define a technical invoicing standard and interoperability framework to fit the U.S. market. The model defined is an open e-Invoicing framework based loosely on the Peppol approach without major requirements or obstacles imposed by law.

While e-invoicing mandates may not be directly relevant to many U.S. businesses, since they apply only to domestic e-Invoices, those with operations overseas in VAT regimes must still take note. Additionally, businesses in the U.S. still stand to benefit from significant cost savings and operational efficiencies by switching to fully automated electronic invoicing.

Latin America

Mexico and Brazil were the pioneers in mandatory real-time clearance e-Invoicing, and their approach has rapidly become the standard for electronic invoicing in the region. Country-wide mandates have since been implemented in Argentina, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras and Peru amongst others. For many Latin American countries, tax regimes have begun to include the likes of transportation documents, payroll and others to gain a wider view of taxation processes.

Global Invoicing Compliance: The Carrot and the Stick

While adopting electronic invoicing clearly provides efficiencies that lead to cost savings and cashflow—a juicy carrot for those adopting e-invoicing, there’s also a very large stick. Non-compliance with regulations comes with the potential of significant business and financial harm including:

• Administrative fines
While fines vary between countries, organizations can face up to €2,000 or more per invoice in some EU states. Trading partners drawn into an audit can also be penalized.

• Legal sanctions
Non-compliance can be equated with tax evasion, making organizations liable to sanctions under both tax and criminal law.

• Loss of VAT rights
Companies unable to provide evidence of purchases may have to pay back input VAT, possibly more than their initial profit margin.

• Trading partner audits
If a tax authority audits and verifies activities of trading partners, the business relationship may become strained.

• Geographical mutual assistance procedures
Auditors may cause investigations in other countries as they dig, taking up more time and increasing potential exposure.

• Protracted audits
Audits can consume expert resources for weeks or even months and possibly spawn additional investigations. Fully one quarter of the companies surveyed by IDG confessed to having experienced one or more of these impacts arising from non-compliance in the past 12 months, with government audits and tax fraud being the most common.

In 2022, the Czech government abolished the requirement effective January 2023, due to the decreasing amount of cash transactions. Thus, there is currently no mandatory digital reporting obligation in effect in Czech Republic. Taxpayers will be able to report their sales data on a voluntary basis until December 31, 2023.
Though there is no mandatory obligation in place, electronic invoices issued for B2G transactions should be accepted where they are in a format compatible with the European standard for e-invoicing. Contracting authorities should not be able to reject an e-invoice when in this format.

Legislation and Compliance

•    October 2016: Public contracting authorities in the Czech Republic are no longer allowed to reject an e-invoice issued by an economic operator if it is issued in a format compatible with the European standard.
•    April 2019: Directive 2014/55/EU was transposed into national legislation. As a result, all public entities must be able to receive and process electronic invoices in accordance with the European Standard on e-invoicing (EN-16931).

E-Invoicing Formats

The following formats are commonly used for e-invoicing in the Czech Republic:
•    ISDOC
•    EDIFACT
•    UBL 2.1

The National E-Invoicing Network

The Czech Republic operates the Národní elektronický nástroj (NEN) as its national e-invoicing network.

Tax Authority and eSignature

•    Tax Authority: The Ministry of Finance oversees e-invoicing compliance.
•    eSignature: Not required for e-invoices.

Real-Time Reporting / Fiscalization

Mandatory real-time reporting and fiscalization in the Czech Republic went into effect on December 1, 2016, as per the Electronic Registration of Sales (EET). This law applies to B2B, B2C, and B2G businesses including the hospitality, retail, and wholesale sectors. All reports must be transmitted to the Czech Financial Administration in real-time. Violation of this regulation can lead to hefty fines.

Impact

According to the draft plan, issuing and receiving structured e-invoices for B2B transactions will become mandatory. This initiative is designed to streamline the invoicing process and introduce a technical solution for the efficient circulation of e-invoices. Additionally, the system will feature the implementation of real-time reporting, aimed at enhancing the monitoring and compliance of VAT payment obligations.

Latvia is paving the way for mandatory B2B e-invoicing, with further details anticipated to be released in the coming months.

Currently local government institutions in Latvia are required to accept e-invoices in their public procurement process as per the specifications established by the European Union. However, the Latvian Finance Ministry is proposing a plan to introduce electronic invoicing as mandatory for both B2B and B2G transactions from 2025. At that stage the circulation of e-invoices will have to be made in accordance with the European Electronic Documents and e-Invoicing Network (PEPPOL) which allows both sending and receiving of e-invoices in a standard mode.

Understanding the Landscape

E-invoicing and e-procurement are pivotal aspects of 21st-century business. The Latvian government has taken significant steps to promote e-invoicing adoption.
Here are the key points:

Mandatory Implementation Timeline:

Phase 1 (May 1, 2022): Suppliers in the public sector must use e-invoices when billing the government. The government receives and stores these invoices.

Phase 2 (July 1, 2022): Public entities send e-invoices to companies, which should be able to receive and store them.

Phase 3 (January 1, 2023): E-invoicing becomes mandatory for the entire B2B sector.

• Target Completion (December 30, 2025): Full implementation of Latvia’s electronic invoicing system.

PEPPOL Standard

• Latvia’s e-invoicing will align with the European Electronic Documents and e-Invoicing Network PEPPOL (Pan-European Public Procurement Online) standard.
• The government aims to set up interoperability and connectivity between Latvia and other EU Member States through the PEPPOL network.

Latvia’s E-Invoicing Solution

Latvia has developed an e-invoicing solution based on its existing Secure Electronic Delivery Platform (e-Address).
Key features include:

• E-invoicing integration in eAddress for secure transmission.
• An interface for submission and receipt of e-invoices.
• A public e-invoicing API library for transmission between different accounting systems.
• Connection with the PEPPOL network.

Benefits for Businesses

• Efficiency: Streamlined processes save time and reduce paperwork.
• Accuracy: Digital invoices minimize errors and enhance data accuracy.
• Cost Savings: Reduced printing and postage costs.
• Compliance: Adherence to legal requirements ensures smooth operations.

Recent News

Sweden Begins E-Invoicing and Digital VAT Initiative: The Swedish Tax Agency (Skatteverket) is currently assessing three different models to comply with the requirements for electronic VAT (DRR) proposed by the European Commission (EC).

On 14 February 2025, the Swedish Customs Authority (Tullverket) announced the adoption of Peppol BIS Billing for invoicing customs, taxes and fees – starting from 1 March 2025. This announcement means that the customers who were receiving invoices via the current EDI format will have to connect to Peppol in order to receive the electronic invoices.

Legislation

The law on eInvoicing in the public sector became effective as of 1 April 2019. From 1 December 2019, all contracting entities in public sector (central government agencies, municipalities and regions) must be registered in Peppol. In Sweden, the standard which meets the new law’s requirements, is known as Peppol BIS Billing 3.0.

The Act regarding eInvoicing in public procurement:

• became effective 1 April 2019;
• it covers the complete public procurement process, above and below EU threshold and includes direct procurement;
• the law makes it mandatory for public sector suppliers to send eInvoices for all contracts signed after 1 April 2019;
• public sector must be able to receive and process eInvoices according to the European standard, EN 16931. However, there are some exceptions which includes national security, specific privacy situations, etc.;
• Digg, the Agency for Digital Government, can impose fines to suppliers that do not comply with the law;
• the law permits the use of other/older formats, which may be set out in bilateral agreements;
• Digg has issued accompanying regulation, which mandates all public entities to be registered in Peppol.

Regulations

E-invoicing in Sweden has been implemented since 2008, when the Swedish National Financial Management Authority (Ekonomistyrningsverket / ESV) made it mandatory for Swedish central government suppliers. The law on e-invoicing in the public sector became effective as of 1 April 2019. From 1 December 2019, all contracting entities in the public sector must be registered in Peppol.

Benefits

E-invoicing offers numerous benefits, including saving time, eliminating the need to print, add postage to, and post the invoices. It provides better control over invoices, and customers receive invoices faster. As a supplier, when you send an e-invoice, it goes straight into your customer’s accounting software and is automatically registered.

When Portugal adopted the EU e-invoicing Directive 2014/55/EU on April 16th, 2014, it became understood that business-to-government (B2G) e-invoicing would become mandatory throughout the country. State and public authorities have to use eSPap’s platform to receive invoices. Vendors must use UBL 2.1 CIUS-PT or CEFACT CIUS-PT to send signed e-invoices. To provide you with the most up-to-date information, below you can find the latest published deadlines, information about the national coordinating body, the Portuguese invoice standard, and more.

eSPap and the Invoice Standard Known as CIUS-PT 

eSPap (Entidade de Serviços Partilhados da Administração Pública) is the coordinating body for the implementation of electronic invoicing (e-invoicing) in Portugal. With Legislative Decree 123/2018 from December 28th, 2018, eSPap was granted the authority to do the following:

• Set technical and functional requirements to support e-invoicing implementation
• Develop support tools for involved parties
• Provide a solution for receiving and processing e-invoices

Unlike many other countries in the European Union, Portugal does not have a national Peppol authority. In situations like this, when there is no national Peppol authority in a country, OpenPeppol AISBL acts as the authority.

The accepted invoice formats for B2G e-invoicing in Portugal are UBL 2.1 ‘CIUS-PT’ and CEFACT ‘CIUS-PT’. These invoice formats comply with the European Standard EN 16931-1.

FE-AP and B2AP 

The implementation of the so-called Electronic Invoice Solution in Public Administration is based on two solutions for electronic invoicing:

• Business to AP (B2AP): This portal is for suppliers to government agencies to monitor electronic invoice delivery and status (in a pilot phase)
• Electronic Invoicing Portal for Public Administration (FE-AP): This portal is for government agencies with the purpose of invoice receipt and verification (in production)

The FE-AP solution has been piloted by three clients of the GeRFiP solution and is now gradually being distributed to public entities. The FE-AP offers the possibility of receiving invoices and correcting documents in an electronic format, ensuring control and supervision at all stages of the process. This solution is available to any public entity and offers direct integration with the GeRFiFiP solution, as well as with web services or any other accounting or document management system.

Key Deadlines and Compliance  

Portugal was one of the first countries to meet the deadline set forth by the European Union. In fact, Portuguese government agencies have been able to receive e-invoices since April 18th, 2019. However, as mentioned above, Portugal is mandating e-invoicing in phases, the next of which is to enforce government suppliers to send electronic invoices.

But that’s not all. For different types of companies (defined by the European Commission (Recommendation 2003/361/EC)), different deadlines apply:

• LARGE ENTERPRISES, those which employ more than 250 people or have an annual turnover of more than EUR 50 million or have an annual balance sheet total of more than EUR 43 million, there is an obligation to send e-invoices from January 1st, 2021 
• MID-SIZE ENTERPRISES, those which employ fewer than 250 people and their annual turnover does not exceed EUR 50 million and/or their annual balance sheet total does not exceed EUR 43 million, it is mandatory to send e-invoices from July 1st, 2021 
• SMALL ENTERPRISES, those with fewer than 50 employees with an annual turnover and/or an annual balance sheet total of no more than EUR 10 million, it is mandatory to send e-invoices from July 1st, 2021 
• MICRO-ENTERPRISES, those with fewer than 10 employees with an annual turnover and/or an annual balance sheet total of no more than EUR 2 million, it is mandatory to send e-invoices from January 1st, 2022 

E-invoice Requirements Portugal

Each e-invoice must have the following:

• Unique invoice identifier (transmission date, company information, and recipient)
• QR code as of 1st January 2022
• ATCUD as of January 1st, 2023
• An electronic signature in electronic invoices in PDF format to ensure they are valid as from 1st July 2022.

Companies should have a system that verifies the signature’s validity as of July 31, 2022. The Autoridade Tributária e Aduanera (AT) must certify a system or software solution for companies to add the ATCUD and the QR code.

ATCUD is a unique ID number in an invoice and is a fragment of the information of the QR code. The ATCUD number has the following format; ATCUD: Validation Code-Sequential number.

Taxpayers get the first part of the ATCUD (validation code) by communicating the document series to the AT. The taxpayer must also give other items such as type of document and first document number of the series. Afterward, AT delivers a validation code that is valid for at least a fiscal year for the whole document series. The sequential number (second part of the ATCUD) is the number that follows within the document series.

In an age of rapid technological progress, legislative frameworks struggle to keep up with the digital revolution. E-invoicing, once an emerging trend, has now become a global standard.

Governments and regulatory bodies are enacting laws that mandate businesses to adopt e-invoicing, aiming to streamline processes, enhance transparency, and combat tax evasion. CFOs need to take a proactive approach to compliance to navigate the constantly changing business environment.

The Complexity of Cross-Border Transactions

Cross-border businesses face additional challenges with e-invoicing legislation. Different countries have diverse regulations, formats, and requirements. Navigating this complex web requires knowledge of local regulations while keeping a global viewpoint. CFOs must ensure that their e-invoicing solutions can seamlessly adapt to the complexities of various jurisdictions.

Compliance as a Strategic Advantage

Compliance isn’t just a matter of ticking boxes; it’s a strategic advantage. Organizations that proactively adhere to e-invoicing legislation position themselves as trustworthy and transparent partners. Compliance also offers operational benefits—swift and accurate invoice processing, reduced risk of penalties, and streamlined audits. By embracing compliance, CFOs enhance their organization’s reputation and efficiency.

SPS Commerce: The Beacon of Compliance

When dealing with numerous legislative changes, it becomes vital to partner with an expert. SPS Commerce, a pioneer in e-invoicing solutions, empowers CFOs with the tools to stay ahead of e-invoicing legislation. Their solutions are designed with a deep understanding of global regulations, ensuring seamless compliance across diverse jurisdictions.

A Closer Look at Compliance Essentials

1. EESPA and Peppol Participation: Active involvement in organizations such as EESPA (European E-Invoicing Service Providers Association) and Peppol (Pan-European Public Procurement Online) signifies dedication to industry standards. The engagement of SPS Commerce with these organizations ensures that their solutions align 100% with evolving regulations.
2. Expertise in Local Regulations: E-invoicing legislation varies from country to country. The solutions of SPS Commerce are tailored to address local regulations, ensuring that CFOs can confidently navigate the complexities of cross-border transactions.
3. Compliance Monitoring: The laws regarding e-invoicing are constantly changing. SPS Commerce closely monitors regulatory changes, keeping its solutions updated to reflect the latest requirements. CFOs can be reassured that their electronic invoicing processes are fully compliant.
4. Integration with Government Platforms: In countries where governments provide e-invoicing platforms, seamless integration is crucial. SPS Commerce’s solutions facilitate direct integration with these platforms, simplifying compliance and enhancing efficiency.

Embracing Compliance as a Business Enabler

While e-invoicing legislation presents challenges, it also offers opportunities for strategic transformation. CFOs can leverage compliance initiatives to drive operational efficiency, enhance relationships with partners, and position their organization as a beacon of transparency. Compliance-driven e-invoicing also prepares businesses for the future, as governments worldwide continue to enforce e-invoicing mandates.

The Path to Move Forward: Navigating with Confidence

In conclusion, to navigate the continuously changing e-invoicing legislation, a proactive and strategic approach is required. CFOs can confidently navigate this terrain with expert partners like SPS Commerce. Adherence to compliance is essential to drive organizations toward excellence.

With a deep understanding of local regulations, active engagement in industry bodies, and solutions designed to align with evolving requirements, SPS Commerce empowers CFOs to navigate e-invoicing legislation with confidence and foresight.

The legislation surrounding e-invoicing is constantly evolving, allowing CFOs to uphold compliance and improve operational efficiency. By embracing compliance as a business enabler, CFOs position their organizations as frontrunners in the digital transformation of financial operations.

With the arrival of the EU E-Invoicing Directive 2014/55/EU, it became clear that The Netherlands—and all other countries in the EU—had to make business-to-government (B2G) e-invoicing mandatory. For The Netherlands, that deadline has well passed, and today, e-invoicing is gaining momentum—even in the B2B space!

In The Netherlands, all public and contracting government authorities must be able to receive e-invoices. The implementation of e-invoicing has been executed by the adoption of the Peppol framework for setting up an exchange infrastructure. Currently, all Dutch government agencies have direct or indirect connections to the Peppol infrastructure. This is the so-called DIGIPOORT, used for the reception of electronic invoices.

From a global point of view, it’s clear that e-invoicing is here to stay, and, especially in The Netherlands, it’s taking over as the preferred invoice exchange method – regardless of industry.

E-invoicing is here to stay in today’s B2G and B2B environment and we expect it to only continue to grow in The Netherlands. But let’s start at the beginning….

E-Invoicing History to Date

E-invoicing was introduced in The Netherlands on January 1^st, 2011. From that moment on, central government agencies were legally required to be able to receive and process e-invoices via Digipoort, the central hub where message traffic for the government is handled.

The obligation to send e-invoices was extended to central government suppliers on January 1^st, 2017. It wasn’t until August 2019, however, that this was strictly monitored or enforced; the central government wanted to give entrepreneurs time to prepare for the new way of invoicing.

On April 18^th, 2019, the e-invoicing obligation was further extended to all Dutch sub-central governments (in addition to central governments), government organizations, and other contracting authorities. This meant that these public authorities also had to be able to receive and process e-invoices from their suppliers according to the European standard format.

But this didn’t mean that all Dutch government agencies had fully switched to e-invoicing by April 2019. That’s because their suppliers were not legally required to send e-invoices—public authorities only had to be capable of receiving and processing e-invoices should any number of their suppliers choose to utilize it. Not surprisingly, the majority of suppliers opted to stick to their usual way of doing business. They were reluctant to switch to e-invoicing because they were more comfortable sending the paper invoices or scanned PDFs that they had been creating for years. In practice, this situation still occurs regularly.

All of this, combined with the fact that the Dutch central government—until August 2019—did not strictly monitor or enforce e-invoicing, meant that e-invoicing didn’t really take off in The Netherlands until almost 10 years from when it was first introduced back in 2011.

That brings us to today. The Netherlands is finally at the point in which enough public and private sector organizations have adopted e-invoicing for its benefits to be more widely addressed within the business community. Despite the lack of mandate at the state level for suppliers to send e-invoices, we’re starting to see that more and more public authorities are encouraging their suppliers to make the switch by communicating the “why” behind something that otherwise seems to be nothing more than an inconvenience. And now, with the help of onboarding services from service providers like SPS Commerce, the transition to e-invoicing can be quite simple for suppliers.

How Can I Get Started with E-Invoicing?

If you’re a supplier, there are various ways in which you can send e-invoices, so the first step is to determine which solution is right for you based on your specific needs. To figure this out, you can start by calculating the number of invoices you send each month or each year along with the number of customers you have. From there, you should also evaluate the capabilities of your ICT infrastructure. If you’re a buyer, the initial “getting started” process is virtually the same, only the other way around, of course.

If you’re getting started with B2G e-invoicing in The Netherlands, the Dutch government is connected to the secure Peppol network. That being said, it’s absolutely critical to choose a service provider that acts as a Peppol Access Point (AP), such as SPS Commerce. In doing so, you’ll be able to send e-invoices to all connected institutions in The Netherlands and abroad, including private organizations, with one simple connection. The Peppol network is also increasingly being used in the B2B space, so choosing a service provider that serves as an AP is a smart choice regardless.

You can send invoices via Peppol in the following ways:  

• A direct link to the network via your accounting software or ERP
• Convert the PDFs generated by your accounting system to the accepted format
• Manually via a portal
• Via Digipoort (only for central government suppliers)

Different governments and municipalities offer different options. SPS Commerce is a service provider to the central government, the Municipality of Amsterdam and the Municipality of Rotterdam, among others.

Standards

Several standards are used for e-invoicing in The Netherlands. In sum, standards describe the rules for the specific formatting of electronic messages (like invoices and purchase orders). By standardizing the structure of the messages, diverse systems are able to understand the data and process it accordingly.

UBL-OHNL: Used by the Dutch government for the procurement of goods and services, except for the hiring of personnel (based on the international UBL standard)

SETU (HR-XML)-OHNL: Used for the hiring of personnel.

Basis Invoice Rijk (BFR): Used for e-invoices within the central government

Peppol BIS: Ensures cross-border interoperability for those utilizing the Peppol network

NLCIUS: An additional specification to the mandatory European standard (EN 16931) that is only applicable in The Netherlands and describes how e-invoicing with the government works (can also be used in B2B instances)

The above standards are mainly, but not exclusively, used by the government. If you’re interested in learning more about the various standards in use for specific industries and regions, here’s a good overview.

Besides those listed above, it’s also important that we mention the ISO 27001 standard. It’s an internationally recognized standard on information security, and up-to-date certification is now mandatory for all service providers in The Netherlands that wish to serve as a Peppol Access Point. So, include this as an important point while evaluating service providers.

The Future of E-Invoicing & E-Procurement

As more and more Dutch public authorities begin to double down on their e-invoicing requirements, an increasing number of large organizations, like Rabobank, PostNL, and KPN, are beginning to embrace the switch. Today, it is no longer a question of if you will send e-invoices in the future, but rather a question of when.

As a matter of fact, we’re also starting to see that some countries have already begun to enforce B2B e-invoicing, like France. This hasn’t happened in The Netherlands yet, but judging from how things are moving along, we can assume it’s a highly likely possibility.

And as many organizations have already realized, the logical digitalization step that follows the implementation of e-invoicing is e-procurement. Many businesses are already on their way to a fully automated procure-to-pay process, and it’s only a matter of time before sending all documents electronically becomes the norm—it won’t stop at e-invoicing.

Conclusion

To conclude, as many organizations have already noticed, the logical digitization step that follows the implementation of e-invoicing is e-procurement. Many companies are already moving towards a fully automated purchase-to-pay process, and it is only a matter of time before sending all documents electronically becomes the standard.

Keep an eye out for changing regulations in The Netherlands!

E-invoicing, also known as electronic invoicing, means creating, sending, and receiving invoices in an electronic format. This replaces traditional paper invoices and brings greater efficiency and accuracy to financial transactions. E-invoicing brings many benefits, including faster processing times, lower costs, and fewer errors.

Peppol’s Role in E-Invoicing

Peppol (Pan-European Public Procurement Online), is a network that allows electronic document exchange between companies and government agencies. One of the main uses of Peppol is to support e-invoicing processes. The Peppol network allows companies to easily exchange electronic invoices with their partners and government agencies, regardless of the software or systems they use.

The Benefits of E-Invoicing with Peppol

Combining e-invoicing and Peppol creates benefits that can help companies improve their financial processes:

1. Efficiency and Speed: With e-invoicing through Peppol, the invoicing process is much faster. Invoices are sent and received instantly, making postal delays a thing of the past..
2. Accuracy and Fewer Errors: : E-invoicing reduces the chance of human error that often occurs with manual data entry. This ensures accurate and correct invoices.
3. Sustainability: Using electronic invoices instead of paper has a positive impact on the environment. It reduces paper use and emissions from physical mail shipment.
4. Transparency: E-invoicing through Peppol provides transparency in the billing process. All parties involved have access to the same standardized information.

The Ease of E-Invoicing with Peppol

Using Peppol for e-invoicing is actually quite simple. Companies join the Peppol network and get an identification number, the OIN number (Organization Identification Number). This allows them to easily send and receive electronic invoices through the network. Peppol’s standardized approach makes invoice exchange smooth and efficient.

E-Invoicing as Part of the Future

As financial transactions continue to change, e-invoicing with Peppol is becoming increasingly important for the future. Companies that embrace this innovation are positioning themselves as forerunners in the digital transformation of their financial processes. The combination of efficiency, convenience, and sustainability makes e-invoicing with Peppol an essential step for companies looking to grow in the modern business world.

SPS Commerce: Your Partner for E-Invoicing

When it comes to e-invoicing solutions, SPS Commerce is a leading provider. Their track record proves their ability to help companies with their e-invoicing needs. Leveraging its expertise and innovative technologies, SPS Commerce helps companies smoothly integrate e-invoicing with Peppol into their processes and take advantage of the many benefits this transformation brings.