New Electronic Invoice Standard in Europe: Current Situation

In previous articles we explained the keys to implement the electronic invoice, taking into account the current billing model, while we advance a second part to discuss the European standardization process. The time has come to address this important issue: the new electronic invoice standard in Europe.

It is a very important issue since it will affect you from a practical point of view when billing electronically. It will be a change that may take place before this summer, and that logically will raise some doubts when it comes to its implementation.

However, there is no need to worry more than necessary. Above all, it will not be problematic for companies or professionals who have automated solutions that will adapt to the new standard, such as via eInvoice.

Although we do not know final details, we anticipate that viafirma solution, will adapt without any difficulty to the imminent European standard.

The Spanish situation: eInvoice

Until now, it has been the EU member states that, unilaterally, have been regulating electronic invoice formats and procedures.

Since January 2015, the suppliers of the Spain Public Administrations must invoice electronically from a certain amount. Regardless the mandatory assumptions established, in general the regulatory framework is favorable to its use of electronic invoicing for all.

Let’s not forget the enormous advantages of issuing an invoice in electronic format for issuer and receiver, although today it is a non-mandatory option to paper format when invoicing to other companies, the consumer or user.

Among other advantages, for the time being this helps to reduce costs, as well as the control of public accounts and the improvement of payment terms, as well as advantages for suppliers when improving management. We are in a moment of great changes, among which stands out a necessary digital transformation of the companies and their processes. Among them the invoicing.

Returning to the Spanish regulatory application, according to Law 25/2013, of December 27, impulse of electronic invoicing and creation of accounting records of invoices in the Public Sector, since January 15, 2015, it is mandatory that all electronic invoices be sent to the public administrations, through the General Point of Entry of Electronic Invoices of the State General Administration (FACe)

Likewise, it should be pointed out that many of the public administrations have made use of the power to exempt from this obligation for the issuance of small invoices, specifically with a top of up to 5,000 Euros.

Except for exemption, when issuing an invoice to a public body in the Spanish territory, currently it should be done following the “invoice” format, but the scenario will change when we know the changes necessary to adapt to the European model that is to come, with view to be prepared to invoice with regard to the entry into force of the new standard.

Towards the standardization of electronic invoicing

Work on standardization is underway at the European level, which is about to be concluded. In fact, the European Committee for Standardization  (CEN) is working on a standardization of electronic invoicing. A new common model that will be effective in May 2017 and applicable in 2018.

Achieving this common model is a complex task, since there must be taken into account, the accounting and tax requirements in many different countries, although the effort is well worth it, because in return the great advantage of interoperability is obtained.

Article 3 of the Directive 2014/55/EU on Electronic Invoicing in Public Procurement, published on 16 April 2014, states that the European Commission would request CEN to draw up the European Standard on Electronic Invoicing (European Electronic Invoice Format), setting as the deadline for publication on May 27, 2017.

A legislation developed in line with the ” Europe Digital Agenda”, one of the initiatives promoted by the European Commission within the framework of the “Europe 2020” strategy, as stated in the preamble Law 25/2013.

This implies that the various countries, including ours, must make the necessary modifications to comply with the next standard of the European standard. Before, predictably, there will be a time of coexistence between the format “eInvoice” and the soon to be established as standard.

It will be for Spain to decide the details of such coexistence, as a transitional period, within the time limits. It must be applied before November 27, 2018 with regard to the State General Administration and, with a greater margin, in the case of other public administrations, i.e. regional, autonomous and local. Therefore, it will be an important issue to follow, which we should be aware.

A common standard to invoice online in the EU

According to the law, in 2018, European companies will have a common standard to be able to electronically invoice public administrations belonging to the European community environment.

What is the cost of adapting to this new environment? It’s a practical question, which you’ll probably be asking. In fact, in one way or another, to a greater or lesser extent, the entry in force of the standard will involve investments by public administrations and companies, with the aim of adopting the European model.

In fact, the systems must change. National models will no longer be implemented as the e-Invoice format and will have to start accepting the new model, counting on the aforementioned transition period.

At the company or self-employed level, the solution may be simpler. If you are working with an automated solution, you will only have to wait for your upgrade to operate according to that model and, in case you are considering starting with one, you simply have to make the best choice according to your needs, ideally from an integrative approach, i.e. that with a single procedure allows you to carry out the formalities of sending the invoice in electronic format for your client, while issuing it in a readable format so that it can be stored by the accounting department for example.

As in the case of having to invoice with public administrations as in any other case, a computer program will allow us to generate them in a simple form in paper or electronic format, fulfilling the legal requirements and also facilitating its integration with the rest of the systems for an efficient and competitive management procedure.

As we discussed at the beginning of this article, we still have to know the details of this standardization of electronic invoicing throughout Europe, however we understand that the standards will follow the lines that are being developed at this time.

Fortunately for those who already use our product, viafirma eInvoice designed from the beginning with enormous flexibility, not only adapting to the main formats in force, but with an amazing capacity to adapt to future standards. We have done our homework well 😉