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Document 52013SC0222
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement
/* SWD/2013/0222 final */
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement /* SWD/2013/0222 final */
Table of Contents Introduction. 6 1........... Procedural Issues and
Consultation of Interested Parties. 7 1.1........ Procedural issues. 7 1.2........ External expertise and
consultation of interested parties. 8 1.2.1..... Summary of the public
consultation. 8 2........... Policy context,
Problem definition and Subsidiarity. 9 2.1........ Background and context 9 2.1.1..... Key concepts. 9 2.1.2..... Benefits of e-invoicing. 12 2.1.3..... Policy context 13 2.1.4..... Nature and size of the
public procurement market 15 2.1.5..... Main stakeholders concerned. 17 2.2........ Problem definition. 18 2.2.1..... Problem driver (D0) 20 2.2.2..... Problem (P1) – excessive
complexity and legal uncertainty for firms. 22 2.2.3..... Problem (P2) – higher costs
for firms. 24 2.2.4..... Consequences (C1, C2) 25 2.3........ Developing a baseline
scenario. 27 2.4........ The EU's right to act and
justification. 29 2.4.1..... Legal basis. 29 2.4.2..... Subsidiarity and proportionality. 30 2.4.3..... Justification for EU action
on e-invoicing in public procurement 31 3........... Objectives. 32 3.1........ General objective. 32 3.2........ Specific objectives. 32 3.3........ Operational objective. 32 4........... Policy Options. 32 4.1........ The choice of coercive or
non-coercive instruments. 35 5........... Analysis of Impacts. 35 5.1........ The expected common
impacts. 36 5.2........ Primary impacts. 36 5.2.1..... Impacts on firms. 36 5.2.2..... Impacts on contracting
authorities. 38 5.3........ Secondary impacts. 40 5.3.1..... Economic, social, and
environmental impacts. 40 5.3.2..... Reduction of administrative
burden. 41 5.3.3..... The scale of secondary
impacts. 41 5.4........ Impacts of defined
options. 41 5.4.1..... Option (1): No new EU
action. 42 5.4.2..... Option (2): Free-choice
approach. 42 5.4.3..... Option (3): Selective
conversion to e-invoicing. 43 5.4.4..... Option (4): Obligatory
acceptance. 44 5.4.5..... Option (5): Full
harmonisation. 45 6........... Comparing the Options. 46 6.1........ Comparing the options
against the operational objective. 46 6.2........ Comparison of options
across all stakeholder groups. 50 6.2.1..... Member States / contracting
authorities. 51 6.2.2..... Firms (including SMEs) 52 6.2.3..... Service providers. 53 6.3........ The preferred option. 53 6.3.1..... Timeframe. 54 6.3.2..... Participation of
microenterprises. 55 6.3.3..... Regulatory form.. 56 6.3.4..... Development of the new
standard. 56 7........... Overall impacts of the
chosen option. 57 7.1........ Primary impacts. 57 7.2........ Secondary impacts. 57 8........... Monitoring and
Evaluation. 57 1........... Annexes. 60 1.1........ Modifications following
the IAB opinion of 22 March 2013. 60 1.1.1..... Strengthen
the problem definition. 60 1.1.2..... Strengthen the subsidiarity
and proportionality analysis. 60 1.1.3..... Improve
analysis of the impacts. 60 1.1.4..... Better present stakeholder
views. 60 1.1.5..... Procedure and presentation. 60 1.2........ Modifications following
the IAB opinion of 8 May 2013. 61 1.3........ Benefits and costs of
e-invoicing in public procurement 61 1.3.1..... Benefits. 62 1.3.2..... Costs. 65 1.4........ Why start with
e-invoicing?. 66 1.5........ Structured e-invoicing -
efficiencies of higher levels of automation. 67 1.6........ Overview of e-invoicing
uptake in EU Member States. 68 1.7........ Projects to facilitate
the roll-out of e-invoicing in the EU.. 73 1.8........ E-invoicing data exchange
models. 73 1.9........ Choice of technical
solution to ensure interoperability. 75 1.10...... CEN standardisation process. 76 1.10.1... Developing a European Standard. 76 1.11...... Summary of stakeholder
views. 77 1.11.1... Conclusions from bilateral
meetings with stakeholders. 77 1.11.2... Replies from IPM survey. 78 2........... Glossary. 95 3........... References. 96 COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal
for a Directive of the European Parliament and of the Council on electronic
invoicing in public procurement Introduction A shift towards
paperless public administration is an important objective for the European
Union and the Member States. The Digital Agenda for Europe[1] includes a call to increase the use of e-Government by EU citizens and businesses. The Annual Growth Survey for 2013[2] also calls on Member States to
give priority to ensuring
that exchanges between administrations and enterprises can be done digitally,
with a view to increasing administrative efficiency. In order to stimulate the
transition to e-government, the European Union has undertaken a variety of
initiatives, one of which aims to make the use of electronic procurement
mandatory across the EU. Another particularly
promising area to help achieve these objectives is e-invoicing, which the
Commission has called for to become the predominant invoicing mode in the EU by
2020[3]. In addition to its potential
contribution to the digitisation of public administration across the EU,
e-invoicing holds the promise of significant economic and environmental
benefits. Increased use of e-invoicing by Member State governments would make the
broadly understood public procurement process more efficient, cheaper, and more
transparent for the parties involved as well as for the taxpayer. A preliminary
estimate indicates that savings of approximately EUR 1.5 to 2.3 billion per
year could potentially be achieved if all public procurement invoices were submitted
in electronic format. E-invoicing is also expected to reduce the administrative
burden for firms, as well as the use of paper, waste, and CO2 emissions from
transport. The
widely-acknowledged benefits of e-invoicing have incited several EU Member
States (Denmark, Austria, Sweden, and Finland) to require the submission of
e-invoices in public procurement in all or part of the public sector. However,
these bottom-up initiatives are for the most part based on national standards,
most of which are not interoperable. As such, they lead to an increase in complexity
and costs for firms wishing to participate in cross-border procurement, and
thereby generate market access barriers. The overall result is that the adoption
of e-invoicing in Europe is still very limited, accounting for 4 to 15%[4] of all invoices exchanged. A
possible initiative in the area of e-invoicing in public procurement would prevent
the further fragmentation of the Internal Market and facilitate the uptake of
e-invoicing. Considering the fact that public procurement covered by the
Directives represents roughly 3.7% of EU GDP[5],
the implementation of an initiative which would eliminate market access
barriers in e-invoicing in public procurement would make the public sector a
'lead market' in this area and spearhead its wider use in the economy. Over the last couple of years, a
significant number of actors have called for action at the European level to
stimulate the e-invoicing market across the EU, especially with regards to
invoices submitted to public bodies. The occasion therefore seems ripe to
undertake the proposed initiative on e-invoicing in public procurement and
effectively remove the market access barriers caused by insufficient
e-invoicing interoperability. As such, action on promoting the uptake of e-invoicing
in public procurement is now seen by the Commission as a priority. This is
reflected in the inclusion of an initiative on e-invoicing in public
procurement in the “Single Market Act II” as one of its Key Actions[6]. A potential proposal in this area would
also complement the on-going modernisation of EU public procurement rules[7], a key action under the “Single
Market Act I”[8],
in particular with regards to the proposal on a full transition to
e-procurement. The current impact assessment therefore looks
at the effects of a possible EU initiative which would enhance e-invoicing
interoperability in public procurement[9]
across the European Union, in order to eliminate the fragmentation of the
Internal Market and remove existing obstacles to the broader use of e-invoicing. 1. Procedural Issues and Consultation of
Interested Parties 1.1. Procedural issues The project is led by Directorate C of the
Directorate General Internal Market and Services. Action on promoting the uptake of
e-invoicing in public procurement is seen by the Commission as a priority for
the near future. This is reflected in the inclusion of an initiative on
e-invoicing in public procurement in the recently-published “Single Market
Act II” as one of its Key Actions. The initiative has therefore also been
included in the “Commission Work Programme for 2013”, which was
announced on 23 October 2012[10].
This Impact Assessment was preceded by the publication
of a Roadmap, which was published as part of the Commission Work Programme for
2013. The Steering Group for this Impact
Assessment was formed by representatives of a number of services of the
European Commission, namely the Directorate General Internal Market and
Services, the Secretariat General, the Directorate-General for Economic and
Financial Affairs, the Directorate General Regional Policy, the Directorate
General for Communications Networks, Content and Technology, the Directorate
General Environment, the Directorate General for Employment, Social Affairs and
Inclusion the Directorate General for Informatics, the Directorate General for
Justice, the Legal Service, the Directorate General for Taxation and Customs
Union and the Directorate General Enterprise and Industry. This Group met four times: on 14 September 2012,
19 December 2012, 6 February 2013 and 18 February 2013. The first meeting of the Impact Assessment
Board (IAB) took place on 20 March 2013. During this meeting, the IAB raised a
number of issues which in the board’s opinion would need to be addressed
further, and requested a resubmission of the Impact Assessment. The second –
positive – opinion on the revised Impact Assessment was issued on 8 May 2013.
The main modifications in response to the first and second opinions of the IAB
are presented in Annexes 1.1 and 1.2. 1.2. External expertise and
consultation of interested parties This Impact Assessment builds on the
analysis of external research and consultations with stakeholders. Two meetings of the European Multi
Stakeholder Forum on e-invoicing (EMSF)[11]
were held in Brussels (on 26 September 2012 and 7 March 2013) and provided an
important forum for discussing the building blocks of the potential EU
initiative on e-invoicing in public procurement. The discussion papers of four
Activity Groups of the EMSF[12]
provided practical feedback from the representatives of national
multi-stakeholder forums and practitioners, such as service providers and
firms. Additionally, a questionnaire was circulated among the members of the
EMSF which attempted to gather data on existing e-invoicing systems, and their
effectiveness, costs and benefits. The 20 replies which were received (19 from
national fora and one from a standard-setting body) were also extensively used
in this Impact Assessment. The content of the initiative was presented
and discussed with the Advisory Committee for Public Contracts (ACPC),
comprising of Member State representatives, during a meeting on 19 September
2012. More informal bilateral meetings also took place with representatives of
various industry associations, including the European E-invoicing Service
Providers Association (EESPA), Business Europe and the European
Association of Craft, Small and Medium-sized Enterprises (UEAPME). Finally, an on-line consultation via the Interactive
Policy Making tool (IPM) was held between 22 October 2012 and 14 January 2013
to gather information on current usage of e-invoicing and opinions concerning a
potential EU initiative in this area. The public response to the consultation
was very positive, with more than 700 replies submitted. The various consultations with stakeholders
provided the Commission with a good cross-section of the views held by the
different stakeholders. 1.2.1. Summary of the public
consultation 707 replies to the public consultation were
received, with a very good geographical and sectoral spread of participants:
every Member State and every group of stakeholders was represented[13]. The questionnaire asked
participants about their experience with using electronic invoicing and their
opinions concerning a possible EU initiative to promote the uptake of
e-invoicing and enhance interoperability between existing systems. The
responses reveal broad support for EU action in e-invoicing in public
procurement; no single category of stakeholder or nationality was outright opposed
to EU action in this field. Support for an EU initiative to promote the uptake
of e-invoicing in the EU by making governments act as the front-runners is
overwhelming – almost 9 in 10 respondents are in favour. There is also strong
support for increasing the interoperability of e-invoicing systems, with more
than 4 out of every 5 stakeholders supporting EU action to achieve this
objective. Finally, the vast majority of respondents wish to see a rapid EU
intervention in the area of e-invoicing in public procurement: 90% of
stakeholders call for making it mandatory before the end of 2017. When looking individually at the different
groups of stakeholders, the greatest supporters of EU action in e-invoicing in
public procurement are the e-invoicing service providers, followed by Member States, contracting authorities, and finally, enterprises. Yet even for enterprises,
support hovers around 80%. The full synthesis report of the responses
can be found in Annex 1.11. 2. Policy context, Problem definition and
Subsidiarity 2.1. Background and context 2.1.1. Key concepts This Impact Assessment refers to a possible
initiative that lies at the intersection of two policy areas: the public
procurement policy and the use of electronic means of communication for invoicing.
These two concepts are presented below. 2.1.1.1. Public procurement Public procurement refers to the
acquisition of goods, works or services by government institutions and public
sector organisations. The EU procurement legislation applies common principles
of transparency, open competition and sound procedural management to public
contract award procedures which are likely to be of interest to suppliers
across the Internal Market. Open and well regulated procurement markets are
expected to contribute to a better use of public resources[14]. The procedures to be applied for the award
of contracts by contracting authorities[15]
are provided in Directive 2004/18/EC. Firms which are active in the utilities
markets (contracting entities) are subject to the provisions of Directive
2004/17/EC. Procurement in the field of security and defence is regulated by the
Defence and security procurement Directive 2009/81/EC. The three above mentioned legal acts
(hereinafter referred to as “the Directives”) regulate the organisation of
tender procedures for high value contracts (i.e. contracts falling above
certain monetary thresholds[16]).
The Directives also contain a number of exclusions (e.g. Directive 2004/18/EC
does not apply to inter alia contracts requiring
special security measures, secret contracts or to service
concessions)[17]. In line with the general principles of the
Directives, contracts of values falling below the monetary thresholds set out
in the Directives (i.e. national procurement not covered by the Directives) and
contracts excluded from the scope of the Directives will be out of the scope of
this initiative. In December 2011, the European Commission
adopted proposals to modernise Directives 2004/18/EC and 2004/17/EC, containing
provisions that relate to the transition towards electronic procurement
(e-procurement)[18].
If the Commission's proposals are accepted during the
legislative process, the vast majority of procurement procedures covered by the
proposals will be carried out using electronic means of communication by
mid-2016. While the rules of the Directives do not go
beyond the award stage, the public procurement process or cycle[19] is a broader concept. It consists
of a number of steps which take place before and after a successful bidder has
been selected: tendering, award, ordering, invoicing, payment and archiving of
the procurement documentation. The key elements of public procurement process
are presented below (Figure
1). Figure 1): The scope of the Directives and public procurement
process Source: DG Internal Market and Services This initiative takes into account the
complete public procurement process and analyses the interactions between its
components. Such a broad approach addresses the recently observed integration
of procurement process which has been driven by IT developments. It is also in
line with the scope of various other initiatives concerning electronic
procurement, which acknowledge that all elements of the procurement cycle have
become much more integrated. For example, the PEPPOL project defines
e-procurement as a process encompassing all steps from e-sourcing to e-payment[20]. The Commission’s 2004 “Action
Plan on e-procurement”[21]
also referred to the entire procurement chain, including the pre-award and
post-award phases. The Commission Communication “A strategy for
e-procurement”[22]
from 2012 recognises that: "[t]he ultimate goal is 'straight through
e-procurement' with all phases of the procedure from notification
(e-notification) to payment (e-payment) being conducted electronically."
Finally, the on-going revision of the public procurement Directives addresses,
among other elements, e-catalogues, which is also an important element of the
post-award procurement process. 2.1.1.2. E-invoicing An invoice is a document certifying the
delivery of a product or the provision of a service, showing the date of
accrual and the amount payable in consideration for the product or service
provided. It is the central element of a procurement process once a contract
has been awarded, and its creation is a prerequisite for the supplier to
receive payment for supplied goods or services.[23] In Europe, invoicing rules are
governed by Directive 2006/112/CE, as amended by Directive 2010/45/EU[24], which establishes equal
treatment between paper and electronic invoices. E-invoicing is the electronic transfer of
invoicing information between business partners (supplier and buyer). It is an
essential part of an efficient financial supply chain and it links the internal
processes of enterprises to their payment systems[25]. Several competing definitions of electronic
invoicing coexist. In its broadest sense, e-invoicing is understood as any
method of invoice submission which does not include the physical presence of paper.
This implies that any form of invoice sent by electronic means (e.g. email with
a scanned invoice as an attachment) constitutes e-invoicing[26]. However, in recent years a
more restrictive definition appears to be gaining broad support. According to
this view, e-invoicing can only truly be referred to as such if the message
containing the invoice is structured in such a way that its receipt and
processing does not require any human intervention[27]. The view that only structured
invoices can be seen as full e-invoices is shared by many stakeholders (e.g.
the results of the EMSF consultation confirm that neither PDFs nor unstructured
invoices are seen as full e-invoices[28]).
Structured e-invoicing offers greater opportunities for the full automation of
invoicing procedures and allows other elements of the post-award supply chain
process to be automated[29]
(e-ordering, e-payment, and e-archiving, etc.). Although the existence of
non-structured invoice documents cannot be ignored, their role (and that of
various hybrid solutions[30])
is generally perceived as temporary[31],
or as a step towards full automation. In summary, the definition which sees
e-invoicing as fully-structured electronic invoicing messages seems by far the
most appropriate and this Impact Assessment will only consider structured
invoices as e-invoices. In terms of the stakeholders involved,
e-invoicing can take place between two businesses (B2B), between business and
government (B2G), between business and the consumer (B2C), and finally between
government and the consumer (G2C). By its very nature, public procurement
transactions concern invoices submitted by businesses (suppliers) to public
authorities (buyers), i.e. B2G invoicing. The other sectors (B2B, B2C and
G2C) therefore fall outside the direct scope of this Impact Assessment, except
insofar as the introduction of e-invoicing in the B2G sector may generate
spill-over effects to these sectors. 2.1.2. Benefits of e-invoicing The benefits of e-invoicing when compared
with paper-based invoicing are numerous and widely acknowledged. Electronic
processing of invoices generates operational savings due to less complex
processes and shorter processing times; it increases transparency, improves the
security and auditability of data; and it can reduce administrative burden for
enterprises. It is also better for the environment. These benefits are among the main drivers
for the adoption of e-invoicing. For example, the Austrian government, in
announcing its plans to mandate e-invoicing in the public sector transactions,
argued that paperless invoicing offers numerous advantages such as time and
cost savings, transparency, traceability, error reduction, as well as positive environmental
impacts[32].
In launching their pilot projects, both Belgium and Ireland stressed the
savings opportunities presented by e-invoicing.[33] In Greece, it was estimated
that both the state and enterprises were losing more than EUR 4 billion annually
from illegal invoicing practices; electronic invoicing is expected to
effectively combat such practices[34].
Finally, savings and transparency motives were also referred to as reasons for
the adoption of mandatory e-invoicing by the federal administration in the
United States[35]
The principal operational gains of
e-invoicing come from less complex procedures and therefore shorter
processing times. The invoice-to-pay cycle time in
paper-based invoicing may take between 30 and 100 days[36]. By automating some of the
processes and eliminating the need for human intervention, it is estimated that
this period can be shortened to around 10 days when invoices are processed
electronically[37].
The shortened invoice-to-pay cycle also means that payment delays would be less
frequent, and that contracting authorities could save on late payment
interests. E-invoicing could therefore contribute to attaining the objectives
of the late payments Directive 2011/7/EU[38]. The simpler and shorter processes result in
savings. For example, the Finnish State Treasury and some Finnish
companies have estimated that an incoming paper invoice incurs costs amounting
to EUR 30-50 to the receiving company. By moving to electronic invoicing, these
costs can be lowered to EUR 10 by semi-automating the invoice process, and to
EUR 1 by fully automating the process[39].
Some service providers estimate that processing of paper invoices is around 60%
to 80% more expensive than electronic invoices[40].
The European Association of Corporate Treasurers has reached similar results,
estimating that companies could save up to 80% of their current costs by
processing invoice data automatically, i.e. removing paper and manual efforts[41]. The electronic processing of invoices positively
influences the transparency of the procurement process. When a tax
audit occurs, e-invoices can be more easily made available to tax authorities
than paper invoices, allowing them to check for compliance more easily.
Industry publications underline that e-invoicing significantly reduces
operational risk of fraudulent invoices and duplicate payments[42]. If e-invoicing is integrated
with tax reporting, it can reduce administrative burden, as tax declarations
can be generated automatically. Finally, e-invoicing is more environmental
friendly, as it reduces the use of paper and the amount of waste generated
by public buyers and firms, as well as the CO2 footprint caused by
transportation. More detailed information about the
benefits of e-invoicing is provided in Annex 1.3. 2.1.3. Policy
context The potential benefits from the use of
e-invoicing are perceived as an opportunity by a wide range of actors, chief
among them: · Member States, who have called for measures to promote e-invoicing
at the Informal Competitiveness Council of February 2012 and in the European
Council Conclusions of June 2012[43]. · The European Parliament, which called for making e-invoicing
compulsory in public procurement by 2016 in a resolution adopted in April 2012[44]. · Stakeholders (chiefly economic actors and NGOs), which in various
fora (conferences, studies, and reports) have highlighted the benefits which
e-invoicing could bring with respect to cost savings, increased efficiency, simpler
and faster payment processes, or a reduced environmental impact. An initiative facilitating the use of
e-invoicing in public procurement would contribute to achieving the objectives
of several existing Commission initiatives, both legislative
and non-legislative. These are discussed below. 2.1.3.1. Legislative
initiatives While at present, no EU legislation
specific to e-invoicing in public procurement exists, some related legislative
acts do address e-invoicing directly or indirectly. Council Directive
2010/45/EU[45], on the common system of value added tax revises and simplifies the
rules for the submission of electronic invoices vis-à-vis traditional invoices,
setting both methods on an equal footing with a view to promoting its usage in
the context of tax rules. E-invoicing is also
indirectly related to objectives of the late payments Directive 2011/7/EU[46], as it could contribute to shortening the payment processing times.
The present initiative would be fully in line with the objectives of both of
these Directives. Additionally, the Commission has
recently proposed to modernise Directives 2004/17/EC and 2004/18/EC, one
element of which is the introduction of mandatory e-procurement. The initiative
on e-invoicing would build on these efforts in order to achieve the objective
of “straight through e-procurement” as defined in the recent communication “A
strategy for e-procurement” (see: section 2.1.3.2 below). Finally, e-invoicing is embedded in a patchwork
of legal requirements, which cover rules on accounting, auditing, protection of
personal data[47], archiving and customs issues. The proposed initiative would fully
respect all of these requirements. 2.1.3.2. Non-legislative
initiatives A number of non-legislative initiatives
dealing specifically with e-invoicing have been adopted, in particular: · The Communication from the Commission "Reaping the benefits
of electronic invoicing for Europe", COM(2010)71, which outlines the
benefits which e-invoicing can bring the Single Market and sets out a plan for
increasing its uptake across the EU. It has set as an objective that "e-invoicing
becomes the predominant method of invoicing by 2020 in Europe". · The Communication from the Commission “A strategy for e-procurement”,
COM(2012) 179 final, which states that the ultimate goal is “straight
through e-procurement” with all phases of the procedure from notification
(e-notification) to payment (e-payment) being conducted electronically. · The European Commission's initiative "A Digital Agenda for
Europe", COM(2010) 245, which gives a prominent role to achieving a
single digital market and calls for removing the regulatory and technical
barriers which prevent mass adoption of e-invoicing; and · The Commission proposal for a Connecting Europe Facility (CEF),
which foresees support to digital services infrastructures (which will also
enable e-invoices). As mentioned previously, the European
Commission has also established the EMSF on e-invoicing, composed of delegates
from national e-invoicing fora and key stakeholders from the user side of the
market, which could be leveraged in the context of a possible initiative on
e-invoicing in public procurement[48]. Finally, the Commission has supported and implemented a number of
projects to facilitate the roll-out of e-invoicing in the EU, namely: PEPPOL,
e-SENS, and e-PRIOR (more information about the scope and objectives of these
projects is provided in Annex 1.7). 2.1.4. Nature
and size of the public procurement market Public buyers are traditionally the largest
consumer in the economy. In 2010, the public sector spent over EUR 2 406 billion
on goods, services and works – amounting to around 19.7% of EU GDP. As
mentioned in Section 2.1.1.1, the majority of public expenditure on goods, works
and services is not covered by the Directives – this includes various
exemptions, below threshold procurement or large amounts of public expenditure
on goods and services to provide health, education and social services. In
fact, only 1/5 of total public expenditure on goods and services is covered by
the Directives. In 2010, over 160 000 invitations to tender were published in
conformity with the Directives in the OJ/TED[49]
website. The estimated value for these contracts was EUR 447 billion (see:
Figure 2), representing approximately 3.7 % of the EU GDP. Figure 2): The size of public procurement market above EU
threshold Source: DG Internal Market and Services, based on
OJ/TED data Within the procurement covered by the Directives,
only a relatively small proportion of contracts are awarded to firms from
another Member State. Direct cross-border procurement accounted for 1.6% of
awards or roughly 3.5% of the total value of contract awards published in
OJ/TED during 2006-2009. In addition to direct cross-border procurement, there
is a considerable volume of indirect cross-border procurement. For example
firms can bid for contracts through their foreign affiliates or subsidiaries.
This channel accounted for 11.4% of awards published in OJ/TED and 13.4% by
value during 2006-2009[50]. 2.1.4.1. Nature
and size of e-invoicing in public procurement Governments are among the principal
recipients of invoices. The public sector is listed as one of top three
industries with the highest inbound invoice volumes, estimated at 9-15% of the
share of all invoices (other industries mentioned are: retail 10%, healthcare
5-13%)[51].
The above data refers to all invoices. As
far as e-invoices are concerned, there are some limitations in the available data,
but a rough outline of the usage of e-invoicing by governments in the EU is
beginning to emerge. For example, Eurostat provides detailed data on the
percentage of enterprises sending/receiving e-invoices in a standard structure
suitable for automatic processing and electronic data to/from public
authorities, which may be used as a good proxy of structured e-invoicing in
public procurement. Figure 3): Enterprises sending / receiving e-invoices in a
standard structure suitable for automatic processing and electronic data
to/from public authorities in 2011 [%] Source: Eurostat, E_INV2_ADEGOV The EU average of 12% confirms that, for
enterprises, exchanging e-invoices with public authorities in Europe is still
more an exception rather than a rule. Looking at the data from a different
perspective, namely the share of e-invoices in all invoices received (i.e.
e-invoicing market penetration), a similar picture emerges. According to a
number of recent studies, e-invoicing makes up approximately 4 - 15% of
invoicing procedures in the EU[52].
This is in line with the Eurostat data, and there is therefore no reason to
assume that the percentage of e-invoicing penetration would be significantly
higher in public procurement. 2.1.5. Main stakeholders concerned The main groups of stakeholders that may be
affected by the EU initiative on e-invoicing in public procurement are: · Member States (understood as policymakers at all levels), who would
implement the new initiative (including possibly the transposition of
legislation). · Contracting authorities, as purchasers of goods, works and services,
who apply the provisions of the Directives; · Firms, including SMEs[53]
(i.e. suppliers), who sell works, goods and services to contracting authorities
(i.e. are active on public procurement markets); · Enterprises providing e-invoicing services (e-invoicing service
providers). 2.2. Problem definition Based upon research of the e-invoicing
market and the results of the public consultation, the existence of multiple non-interoperable
(national and proprietary) e-invoicing standards across the EU has been identified
as the main problem driver with regards to the exchange of invoices in public
procurement. This driver results in an excessive level of complexity, legal uncertainty
and additional operating costs for firms when issuing invoices across the EU. As
a consequence, firms encounter market access barriers that deter them from
bidding on public procurement in other Member States, which in turn translates
into inefficiencies in the functioning of the Internal Market. However, the identified problems must also
be placed in a broader context, where despite efforts to stimulate and promote
the use of e-invoicing across the EU, and despite the broad acknowledgment of
the economic, environmental, and other benefits of its use, the public sector
across the EU has been quite unresponsive. As mentioned earlier in this Impact
Assessment, the use of e-invoicing in the EU remains limited, particularly in
public procurement. This appears to be to some extent a case of market failure,
where market forces have not been sufficient to drive forward changes in public
procurement processes which offer significant potential benefits to all
stakeholders. The reasons for this can only be guessed at, but most likely
include a mixture of bureaucratic inertia, the difficulties of process change,
and the effects of the short-term nature of the political cycle. The above situation results in the
continued predominance of inefficient paper-based invoicing processes in EU
public procurement, with all the negative side-effects which this implies. The
scale of these inefficiencies corresponds to the potential benefits which are foregone
due to the fact that e-invoicing is not being used[54]. The problem tree which summarises the above
finding is presented in Figure 4), where problem drivers, problems, and their
consequences are presented together with the context of the low uptake of
e-invoicing in public procurement. Figure 4): Problem tree 2.2.1. Problem
driver (D0) The e-invoicing market in Europe is
characterised by the existence of many (national and proprietary) standards.
Examples of e-invoicing standards used in the EU are provided in Table 1)
below. Table 1): Examples of e-invoicing standards Common global and regional standards || Industry specific standards || National standards UN/CEFACT Cross Industry Invoice (CII) version 2 UN/EDIFACT ANSI X12 eCOM (includes GS1 EANCOM and GS1 XML) ebXML UBL RosettaNet || ODETTE PIDX CIDX || Facturae (Spain) ebInterface (Austria) OIOUBL (Denmark) Svefaktura (Sweden) ZUGFeRD (Germany) Source: "European e-invoicing guide for SMEs"
European e-business lab, pages 54-56 and DG Internal Market and Services research. These and probably quite a few more global,
regional, and industry-specific standards coexist in the EU. Most of these
standards are not interoperable and none of them appear to be dominant. Paradoxically, the multiplicity of
standards and lack of a dominant technical solution creates a “vicious circle”
situation, where even more new standards appear on the market. As one of the
e-invoicing service providers has pointed out, “lack of information about
existing standards has resulted in the re-invention of dozens of niche
standards (domestic or industry focus)”[55]. Despite the co-existence of many
non-interoperable standards on the market, a number of Member States, who have recognised
the economic benefits of e-invoicing, have decided to make it mandatory (de
facto or de jure) in public procurement within their national
administrations[56].
However, in a situation where no clear indication exists on which standard to
use, when making the decision to facilitate or mandate the use of e-invoicing, governments
(both national and local) frequently decide to come up with their own technical
solutions, based on a separate national standard. For example, e-invoicing is currently
mandatory in Denmark and Sweden, and it will become mandatory in Austria as of
2014. In these three countries only, three different technical solutions have
been chosen: Denmark requires the use of OIOUBL (based on UBL 2.0), Sweden
recommends the use of the Svefaktura, while Austria has opted for PEPPOL
solutions. This process of fragmentation is
continuing, as even more standards are appearing or will soon appear on the
market driven by government initiatives: ·
Spain currently makes it possible for the
central government to accept electronic invoices on a voluntary basis, and has
established a national standard to facilitate the exercise (known as Facturae).
·
Italy has passed basic laws on mandatory
e-invoicing, and is planning to introduce mandatory e-invoicing “in the near
future” on the basis of an XML-based national standard. ·
The Czech Republic allows their governmental
departments to mandate e-invoicing if they so choose and a non-mandatory
national standard exists (ISDOC based on UBL 2.0). ·
The German national e-invoicing forum (Forum
elektronische Rechnung Deutschland or FeRD), supported by the German
Ministry of Economy and Technology, has recently unveiled a German national
standard, known as ZUGFeRD. ·
Belgium is preparing a pilot project, allowing
the submission of e-invoices to certain departments and/or regions. A UBL-based
standard will be mandatory. ·
The Netherlands has established an e-invoicing
portal (Digipoort) and obliges central government bodies to accept
e-invoices if they are submitted via this portal. One of two specific standards
(UBL and a Dutch version of an XML-based standard) must be used to do so. Additionally, e-invoicing is being used by
some government departments, public sector organisations, and localities across
the EU, although no specific laws regulating the practice currently exist. The above clearly highlights the problem:
if at some point in the future all Member States decide to switch to
e-invoicing and each of them choses its own e-invoicing standard, a huge number
of combinations of standards would be possible when sending and receiving
e-invoices (e.g. even if only the 15 e-invoicing standards mentioned in Table 1
are considered, this results in more than 100 different combinations). To
combat the problem of these multiple matches, translation between the standards
is necessary – a process known as ‘mapping’. In theory, the mapping can be
carried out by any market operator, but in practice, most of this work has been
delegated to service providers. The multiplicity of e-invoicing standards
and the need to map them has resulted in a number of models which are applied
to the exchange e-invoices. These are usually categorised as: bilateral
exchange, 3-corner models, and 4-corner models[57].
Due to the fact that it allows each of the parties to an e-invoicing
transaction to work through its own service provider, the 4-corner model is
generally considered to be the most efficient and flexible system for
exchanging e-invoices. However, such a system is still based on a bilateral
exchange (in this case between two service providers) and it therefore still
requires a large number of bilateral agreements on the method of communication to
be used between them. A report by EBA/Innopay summarises the
difficulties of the current organisation of the e-invoicing market based on the
above data exchange models, stating that “these market developments have
resulted in a tendency towards separation and segmentation, often described as
“silos”[58].
A similar diagnosis of the current situation can be found in a Deutsche Bank
Research document, which stresses that “e-invoicing providers who offer
their services as external contractors have not established a market standard
to date. Also the high number of more than 400 e-invoicing providers in Europe
has contributed to the existing siloed solutions. […] sending invoices
electronically between clients of different providers is frequently impossible
because of technical disparities.”[59] The proliferation of e-invoicing standards
therefore requires significant investments from service providers to be able to
support them and elevated operating costs in order to perform the mappings. The
degree of difficulty – and therefore of the associated costs – to a significant
extent depends on the service providers’ ability to sign interoperability
agreements. Several attempts have recently been made to simplify this process;
however, due to the fact that all of these efforts have focused on a bilateral
approach, none of them have resolved the problem of the multiplicity of potential
combinations of standards. Even where interoperability can be ensured by means
of a bilateral agreement, considering the number of such players on the market
(in excess of 400) and the number of different standards, several thousand
different agreements would be required in order to ensure full general
interoperability. This is, for obvious reasons, very resource-intensive and,
until now, has not been feasible. Concluding, the multiplicity of
non-interoperable standards (D0) dominates the EU e-invoicing landscape. Member
States are co-responsible for the observed spur of e-invoicing solutions, as several
of them have required that invoices submitted to the public sector must comply
with specific – frequently national and non-interoperable – standards. 2.2.2. Problem (P1) – excessive
complexity and legal uncertainty for firms The existence of many different e-invoicing
requirements and standards across the EU results in an excessive
level of complexity and legal uncertainty (P1) for firms when
issuing invoices to another Member State. This situation is not only burdensome
for suppliers, but presents a risk that their e-invoices might not be accepted
by buyers in other Member States. The fact that cross-border e-invoicing is
problematic is confirmed in various publications. For example, the Euro Banking
Association underlines the fact that barriers to adoption of e-invoicing
persist, especially in the area of legal/tax rules and a lack of EU-wide
harmonisation and clarity, which complicates intra EU–invoicing[60]. Similar views have been collected within
the PEPPOL project, where a representative of an enterprise currently using
e-invoicing in public procurement has stated the following: “We currently
support many different standards, versions of standards and formats and this is
not sustainable anymore. If you look at the cost benefits of automation,
supporting 4 different standards represents a break-even point for us […].
Every new format or standard requires training, learning the codes, developing
and testing new code, and then maintaining it. It is a serious investment and
maintenance cost.”[61] In the public consultation concerning this
initiative, the multiplicity of standards/requirements in e-invoicing was identified
as one of the main barriers to the adoption of e-invoicing by firms. Figure 5): Reasons for not using e-invoicing – public
consultation results Source: DG Internal Market and Services The results of the above-mentioned
consultation also show that a lack of clarity concerning applicable laws and
regulations is the third most frequently mentioned reason which discourages
firms from e-invoicing (see: Figure 5). Complexity and legal uncertainty concerning
the acceptance of an invoice in different Member States was also mentioned by SMEs
in a survey on the use of e-invoicing in Europe[62]. For example, the fear of lack
of acceptance of invoices abroad was mentioned by as many as 47% of firms from
Austria and 21% from Italy. In Spain and Finland this concern was mentioned
less frequently, but around one in ten firms still perceived it as a problem
(see: Table 2). Table 2): Survey of SMEs – problems of e-invoicing What do you regard as potential problems of electronic invoicing? [in %] || AU || FI || IT || ES Complexity || 27,0 || 18,9 || 23,9 || 21,4 Expensive/high investment required || 12,3 || 17,5 || 15,6 || 11,1 Concerns over return on investment || 14,2 || 9,2 || 13,9 || 14,8 Readiness/compatibility of internal systems || 30,4 || 34,6 || 36,0 || 20,0 Customer compatibility/readiness || 36,0 || 51,8 || 23,9 || 20,7 Legal uncertainty concerning the acceptance of the invoice in different Member States || 46,8 || 9,4 || 21,4 || 12,0 There are no barriers || 10,3 || 11,6 || 20,8 || 15,0 Other || 23,7 || 10,3 || 0,0 || 15,4 Source: "European e-invoicing guide for SMEs"
In practice, the risk of non-acceptance abroad
is typically driven by the existence of different technical standards. This is
also confirmed by the fact that a lack of “customer compatibility” scores high
on the list of problematic issues for SMEs (e.g. mentioned by 51% firms in
Finland). Uniform technical requirements would undoubtedly simplify the
e-invoicing processes as compatibility between buyers and sellers would be
ensured. 2.2.3. Problem (P2) – higher costs for firms As mentioned above, the existence of multiple
requirements, standards, solutions, and networks/platforms across the EU results
in a very complex situation. Since these standards and systems are not
interoperable, and as no common standard is available on the market, firms
which want to carry out cross-border procurement activities are often required
to support, in one way or another, a new invoicing standard each time they
access a new market. This in turn generates additional costs, irrespective of whether
the invoices are submitted directly (which requires additional expenditure on
creating new mapping possibilities) or through service providers (which will
charge higher fees). Whether done via service providers or directly, the need
to introduce new interoperability requirements increases operating costs for
economic operators (P2), i.e. the costs of doing business cross-border. The problems of these excessive costs are
also recognised by firms participating in public procurement: “There are
several fee structures that service providers typically use for e-Invoicing:
from free for suppliers, a fixed subscription fee, a fixed fee per invoice to a
percentage fee on the amount of the invoice. So, in addition to the technical
complexities we also have to evaluate the fee structure when deciding to
support a customer’s request for e-Invoicing or not. Some service providers
have acceptable fee structures but there are others that for example charge a
percentage of the amount of the invoice, so the exchange of a large invoice
could cost us 1.500 Euro or more, even though it is exactly the same process
whether you exchange a 100 Euro or a 1 million Euro invoice. This simply does
not make sense economically. In such case we will contact the customer and
revert back to a 100% manual process for a large invoice. This obviously
defeats the whole purpose of automation for both customer and supplier but it
allows us to save a significant amount of money.”[63] The exact amount of additional costs for
firms generated by the need to adapt to multiple standards is difficult to
quantify, since as mentioned above, service providers use various business
models and pricing schemes, which typically depend on the volume of invoices
generated by the supplier. It is evident, however, that the need to support
each additional e-invoicing standard leads to additional operating costs for
firms. In passing, it should be noted that these higher operating costs may be
especially burdensome for SMEs, and in particular for microenterprises. Finally, it is important to note that it is
not only suppliers that are faced with the problems stemming from the
multiplicity of e-invoicing standards across the EU. The higher operating costs
for these firms, which result from the need to support several different
standards, indirectly also have a negative effect on the buyers. In order for
the firms to make the same level of profit, higher prices need to be charged for
their products or services, and these higher prices are ultimately paid by the
contracting authorities. This aspect links the problems with the contextual
aspects, such as the suboptimal use of resources in public procurement. 2.2.4. Consequences (C1, C2) The need to adapt to multiple
interoperability requirements generates excessive complexity and legal
uncertainty (P1) and increases the operating costs (P2) for firms doing
business cross-border. The divergent legal or technical
requirements, which are either “non-standardised” or adopted in the form of
national standards, can constitute market access barriers in cross-border
public procurement (C1) - in the same way as any other unknown legal or
administrative requirements. These divergent requirements could be perceived as
technical barriers to trade[64]
and generate investment risk. In the worst-case scenario, the two above-mentioned
problems might deter firms from bidding in public procurement in other Member
States, meaning that enterprises would pass up on potential business
opportunities due to specific e-invoicing requirements which they cannot
support (or which they judge too expensive to support)[65]. According to a survey held in 2011 by Rambøll
Management[66],
for 71.5% of firms, legal requirements leading to market entry barriers in the
awarding country are perceived as relevant or highly relevant obstacles to
cross-border bidding in public procurement (i.e. high relevance for 47.6% and
medium relevance for 23.9% respondents). “Unfamiliar formal requirements
demanded” were important or very important for 63.1% of firms. The detailed
results of the survey are provided in Figure 6. Figure 6): Businesses' views on several possible obstacles to
cross-border bidding Source: "Cross- border procurement above EU
thresholds”, Ramboll Management, May 2011 If the above examined legal uncertainty
(P1) and higher costs (P2) resulting from different e-invoicing requirements
were to be classified respectively under the headings “legal requirements”
and “unfamiliar formal requirements” in the above survey, its findings would
then show that the persistence of these obstacles discourages firms from
participating in cross-border public procurement. Similarly, the connection between
e-invoicing and cross-border public procurement is confirmed by the results of
the public consultation, where 72% of 661 respondents either agreed or strongly
agreed with the statement: "If the EU established a common standard for
e-invoicing in public procurement, cross-border procurement transactions would
be facilitated". Only 10% disagreed or strongly disagreed. The
proportion was almost identical for enterprises, i.e. the stakeholders most
directly concerned: 71% either agreed or strongly agreed with the statement
while a mere 8% disagreed or strongly disagreed (out of 122 firms which
replied). Figure 7): Impact of EU common standard for
e-invoicing on cross-border procurement Source: DG Internal Market and Services – results of
the IPM public consultation, Dec 2012 – Jan 2013 Finally, the risk of emergence of market
entry barriers in cross-border public procurement due to functional as well as
technical IT characteristics was identified as early as 2004 in the Commission
Communication “The Action plan for the implementation of the legal framework
for e-procurement”. This Communication recognises that “barriers for businesses
may emerge in cross-border tendering, if design of IT standards is
incompatible. Diversity and incompatibility of technical solutions can render
suppliers’ access to e-procurement systems impossible or discourage their
participation because of additional difficulties or increased costs”[67]. To summarise, both the higher operating
costs for enterprises and the excessive complexity/legal uncertainty generated
by the need to acquire and maintain interoperability between various invoicing
systems are a potential source of market access barriers in cross-border
procurement (C1), which ultimately leads to a situation where e-invoicing
regimes are still delineated along national borders. Where it does take place
in the EU, e-invoicing is for the most part limited to separate – often
national – networks, creating 'islands of e-invoicing' in the Internal Market.
The domination of national e-invoicing regimes and national technical solutions/standards
means lower cross-border bidding, fewer participating companies, and therefore lower
competition, which in turn translates into an inefficient functioning of the
Internal Market (C2). 2.3. Developing a baseline
scenario The baseline scenario consists of the EU undertaking
no additional measures with regards to e-invoicing in public procurement beyond
those which have already been implemented. The EU's policy towards e-invoicing is
currently set-out in the 2010 e-invoicing Communication[68], in
which the use of e-invoicing was recommended and self-regulation on the basis
of a number of guidelines was urged. This Communication recognises that if the
full benefits of e-invoicing are to be realised, public
sector initiatives in the Member States are critical to accelerate its uptake
and market penetration. In order to achieve this, the Commission recommends that Member States should develop
national strategies "to promote e-invoicing at national level,
including by setting targets for the adoption level of e-invoicing". The Communication also recognises the
drawbacks of the multiplicity of standards for e-invoicing. In particular, it
points out that "the diversity of data and usage requirements, and very
different approaches to their implementation, have led to market fragmentation"
and that "as a consequence, market players, such as enterprises,
software companies and financial service providers nowadays need to support
multiple formats, necessitating the need for substantial mapping and conversion
exercises to cope with data expressed in different syntaxes." In order to overcome this fragmentation,
the 2010 e-invoicing Communication asked international and European standard-setting
bodies to undertake efforts to facilitate convergence on and implementation of
the chosen data model. However, the Communication stated that it should be left
to the market to define how this data model is subsequently adapted to suit
specific business needs. In line with this approach, the Commission has also
implemented or funded projects of its own to promote the use and
interoperability of e-invoicing at European level, with a particular focus on
the B2G/public procurement domain (e.g. the e-PRIOR and PEPPOL projects; see
Annex 1.7 for details). Three years on
from the publication of the 2010 e-invoicing Communication, the situation is
less than optimal. Although a small number of Member States have taken some steps
towards implementing e-invoicing in public procurement and a few others are
considering action in this direction, these initiatives are uncoordinated and
inconsistent. As mentioned previously,
Denmark, Finland, and Sweden had already required the submission of e-invoices
before the 2010 e-invoicing Communication was adopted, and a number of other
Member States have recently launched projects (e.g. Austria, Ireland, Belgium,
the Czech Republic, Germany) to introduce e-invoicing in the public sector,
which could be considered as their response to the recommendations published in
2010. However, this gradual and uncoordinated
progress in the adoption of e-invoicing by Member States (including via a
mandatory approach) only aggravates the interoperability problem described in
Section 2.2, as ever more technical standards and requirements need to be
supported by suppliers in order to be able to send e-invoices to Member States’
public administrations across the EU. These initiatives are therefore bringing
further complexity and fragmentation to the Internal Market. So far, only three
EU Member States have opted to implement inter-operable solutions based on EU
co-funded projects: PEPPOL in Austria and foreseen in Ireland, and e-PRIOR,
currently being implemented by the Belgian Federal administration. In undertaking no
new EU action, it can be expected that in the foreseeable future, the adoption
of e-invoicing in public procurement in the EU would continue at a slow and
steady pace, with more and more national standards appearing on the market. Even
if some Member States opt for interoperable solutions, there is no guarantee
that this will be the case everywhere. Indeed, recent experience suggests otherwise.
As a consequence,
achieving EU-wide interoperability of e-invoicing systems in public procurement
risks becoming increasingly complex and costly, despite the Commission's
on-going support for this objective. Service providers (or buyers and suppliers
that choose to communicate directly) would have to cater for a growing number
of national requirements and standards. The associated costs would ultimately
be borne by suppliers – either directly in peer-to-peer transactions or in the
way of fees, if service providers handle the format conversions. In other
words, market access barriers would not only continue to exist but could in
fact increase, preventing the Internal Market from functioning correctly. 2.4. The EU's right to act and
justification 2.4.1. Legal basis The EU’s right to take action to ensure the
functioning of the Internal Market stems from Article 114 of the Treaty on the
Functioning of the European Union (TFEU), which provides the tools for achieving
the objectives set out in Article 26 TFEU. Article 114 TFEU would therefore constitute
the legal basis for a potential EU initiative on e-invoicing in public
procurement. As mentioned in Section 2.1.3, no specific
legislation at EU level has until now dealt with the post-award part of
procurement. The current approach to address the post award stage is clearly
driven by IT developments in the area of public procurement. For a long time
and until recently, invoicing could easily be thought of simply as one of the
consequences/outcomes of public procurement rather than an integral part
thereof, with very little impact on the actual procurement itself. As such, it
was simply not relevant enough to figure significantly in public procurement
policy. However, the recently observed adoption of electronic procurement
methods and tools has significantly changed the procurement processes, which
have become much more integrated and the digitalisation of all elements of the
procurement cycle is nowadays a reality[69].
The above IT-driven changes in the public procurement process have necessitated
a reassessment of the pre-award / post award division. The fact that a number of Member States
have introduced electronic tools and processes into invoicing and that several of
them have made it mandatory, means that these practices are the source of new market
access barriers in cross-border public procurement. As has been shown in
Section 2.2.1, the existing or planned national rules are based on different
national standards which are not interoperable. There is now a real risk of an
enterprise not participating in cross-border public procurement due to the
inability to meet e-invoicing requirements of a particular Member State[70]; hence the introduction of
electronic invoicing has recently started to have a direct impact on public
procurement. As has been argued in Section 2.2.4, these new technological
market access barriers (unknown e-invoicing standards, non-interoperable
functional requirements, etc.) hinder the efficient functioning of the Internal
Market. There is therefore an urgent need to
address the emerging problem of market access barriers before additional Member
States enact their own unique national standards for e-invoicing in public
procurement. Article 114 TFEU provides the most appropriate legal basis for a
legislative act harmonising the de facto and de jure actions
undertaken by Member States in the area of e-invoicing. 2.4.2. Subsidiarity and proportionality
EU action in the area of e-invoicing in
public procurement is justified on grounds of subsidiarity and proportionality.
(1)
Necessity Test As described in Section 2.2, the number of existing
standards, requirements, and solutions remains very large and e-invoicing
networks appear to be growing more, not less, entrenched along national boundaries.
The bottom-up initiatives from Member States have aggravated the
interoperability problem, as more e-invoicing standards have emerged on the
market, further increasing the costs and complexity of ensuring
interoperability. The fact that uncoordinated standardisation activities at
Member State level can lead to conflicting national standards and impediments
to the functioning of the Internal Market has already been recognised in the acquis[71]. European
standards therefore play a very important role within the internal market[72], and such standardisation by nature
requires coordination at the EU level. In the particular context of public
procurement, actions undertaken by Members States, which frequently involve the
introduction of national standards, are not sufficient to ensure e-invoicing
interoperability in cross-border procurement. (2)
EU added value The rationale for an EU action stems from
the transnational nature of the problem of insufficient interoperability
between national (and proprietary) e-invoicing systems. Given the cross-border
nature of public procurement transactions covered by the Directives and the
lack of any meaningful efforts on the part of the Member States to resolve the
interoperability issues, an EU action on e-invoicing in public procurement
seems to be the only solution available to co-ordinate their actions and to
prevent further fragmentation of the Internal Market. Furthermore, only the EU
can act as an unbiased arbiter in the discussion on interoperability and
objectively recommend the best approach to eliminating market barriers. There is little indication that, without EU
action, the current situation concerning e-invoicing in public procurement will
change or improve in the foreseeable future. (3)
Proportionality Under the principle of proportionality
(Article 5(4) TEU), the content and the form of EU action shall not exceed what
is necessary to achieve the objectives of the Treaties. The potential EU
initiative considered in this Impact Assessment will be limited only to those
aspects of e-invoicing in public procurement that Member States cannot achieve
satisfactorily on their own, with the aim of respecting the heterogeneity of
requirements and invoicing traditions among industries, geographies and
jurisdictions, as well as the existence of legacy IT systems currently used by
some Member States. The proportionality of the different policy options has
been assessed and the result of this assessment is described in the relevant
part of this Impact Assessment (see, in particular, Sections 5 and 6.1). 2.4.3. Justification for EU action on
e-invoicing in public procurement The existence of the problems and
consequences described in sections 2.2.1 to 2.2.4 is widely recognised by
stakeholders, as has been shown in these sections by quoting their views or
citing the results of various surveys. The majority of the stakeholders share
the view that action at EU level should be undertaken to facilitate
interoperability in e-invoicing (e.g. 85% of respondents to the IPM
consultation support a possible EU initiative to enhance interoperability in
e-invoicing)[73].
For many – especially firms which consider using e-invoicing – “government
policy emerges as the most important determinant of progress in e-invoicing
adoption”[74].
The latter statement also links the problem definition with the context of the
low uptake of e-invoicing in the public sector, as stakeholders would very much
appreciate seeing governments as front-runners in this area. EU intervention concerning e-invoicing in
public procurement is also justified despite the relatively low level of cross-border
procurement in the EU[75],
as market access barriers driven by insufficient e-invoicing interoperability
can influence firms’ propensity to bid on public procurement in other Member States.
As a result, it can be argued that this low level is actually a result of the
existing barriers. Such an assessment is also in line with WTO practice[76]: where differences in
technical regulation and standards may be recognised as potential unnecessary
obstacles to trade, the volume of the cross-border procurement is incidental,
since any potential barrier to trade may have an impact on the market. Therefore
theoretically, if barriers to cross-border e-invoicing were removed, the volume
of cross-border procurement could rise significantly. 3. Objectives 3.1. General objective The primary objective of this initiative
would be to improve the functioning of the Internal Market by introducing
mechanisms that would diminish market access barriers in cross-border public
procurement, generated by insufficient interoperability of e-invoicing technical
requirements or standards. 3.2. Specific objectives The specific objectives contributing to the
achievement of the general objective would be the following: –
Reduce complexity and improve clarity and
legal certainty for economic operators (to combat
problem P1), by enabling firms to send invoices in standards with which they
are familiar and which will be widely accepted; –
Lower operating costs for economic operators participating
in cross-border public procurement (to combat
problem P2), such as cost of supporting multiple e-invoicing standards and
systems. 3.3. Operational objective Considering the main problem driver
highlighted in Section 2.2, as well as the general and specific objectives
described above, the following operational objective has been identified: –
Create conditions for the emergence of (a)
technical solution(s) for e-invoicing in public procurement which would ensure
cross-border interoperability – in other words, create
conditions in which communication and mapping between e-invoicing systems will
be less resource-intensive, allowing buyers and sellers to exchange invoices in
public procurement at the lowest cost and with minimal complexity. It is proposed to implement this initiative
within as short a period of time as possible for all contracting authorities which
award public procurement contracts covered by the Directives. Taking into
consideration the necessity of developing a common standard and the time which
this requires, the most realistic deadline for the introduction of a technical
solution that would ensure cross-border interoperability appears to be between 2017
and 2018. Such a deadline would be coherent with the 2010 e-invoicing Communication[77], which called for e-invoicing to
become the predominant method of invoicing in Europe by 2020. 4. Policy
Options With a view to achieving the above-stated
objectives in the most effective and efficient manner, the following policy
options are proposed: –
Option (1) - No new EU action (“no change”): no new action would be undertaken at the EU level;
the Commission would continue to monitor the implementation of the 2010
e-invoicing Communication, expecting self-regulation among stakeholders or the
conclusion of multilateral agreements between e-invoicing service providers; –
Option (2) - Free-choice approach: the EU would propose a European e-invoicing standard to the
market, but its use would not be obligatory (i.e. the EU would recommend it,
but the final decision would be left to the stakeholders); –
Option (3) – Selective conversion to
e-invoicing: the EU would propose a European
e-invoicing standard to the market; the Member States or contracting
authorities which have already made or which subsequently make e-invoicing
mandatory would be obliged to accept invoices submitted in this standard;
exchanging e-invoices in other standards would still be allowed if both parties
of the transaction so agree; –
Option (4) - Obligatory acceptance: the EU would propose a European e-invoicing standard to the market;
the acceptance of invoices submitted in this standard would be obligatory for
all contacting authorities; exchanging e-invoices in other standards would
still be allowed if both parties of the transaction so agree; –
Option (5) - Full harmonisation: the EU would propose a European e-invoicing standard to the market,
which would become the only means of exchanging invoices in public procurement;
exchanging e-invoices in other standards would no longer be allowed. As explained in Section 2.1.1, the above
proposals would apply to public procurement covered by the Directives. In all
Options, firms would be allowed to send paper invoices unless the Member State
or the contracting authority decides to ban paper invoicing; the introduction
of mandatory sending of e-invoices is not considered in the Options analysed in
this Impact Assessment. An overview of key differences between the
above proposed Options is presented in Table 3). Table 3): Key differences between Options || A new European standard is proposed to the market || Member States must accept invoices compliant with the new European standard || Only the new European standard is allowed Option (1): No new EU action || NO || NO || NO Option (2): Free-choice approach || YES || NO || NO Option (3): Selective conversion to e-invoicing || YES || NO/YES (YES - only if a Member State or a contracting authority mandates the use of e-invoicing) || NO Option (4): Obligatory acceptance || YES || YES || NO Option (5): Full harmonisation || YES || YES || YES With the exception of the baseline scenario
(i.e. Option (1) “No new EU action”) which follows the recommendations of the
2010 e-invoicing Communication[78],
the remaining Options foresee that a specific instrument (a European
e-invoicing standard) would be proposed to the market to facilitate
interoperability. The above raises a key question, namely
which technical solution should be chosen as the backbone of the new
interoperability framework. Theoretically, the operational objective defined in
this Impact Assessment could be achieved in one of two ways: (a)
choosing one of the existing standards and
proposing it to the market, or (b)
developing a new standard and proposing it to
the market, e.g. a European standard (EN). These alternatives could constitute
sub-options of each of the four above-mentioned main Options (i.e. the five
Options less the baseline scenario). However, for a number of technical and
practical reasons, such an approach has not been used. The principal reason is
that there is currently no adequate solution available on the market which
could ensure cross-border interoperability at the EU level. As such, the
development of a European standard remains the only viable solution. The
justification for the above decision is presented in more detail in Annex 1.9. Finally, the proposed new European standard
should cover only the elements that are necessary to ensure cross-border
interoperability in e-invoicing. The exact scope of the EN should be left to
the relevant European Standardisation organisation and follow the
standardisation process as defined in Regulation (EU) No 1025/2012. However, at
this stage of analysis it seems that the new European standard should above all
focus on the semantic alignment[79]
of various national standards / technological solutions used in e-invoicing
across the EU. 4.1. The choice of coercive or
non-coercive instruments The proposed menu of options ranges from
options which would be implemented using soft law measures, to options where
legal instruments would be necessary. A question arises if coercive instruments
should be at all considered in this Impact Assessment, knowing that in the
public consultation the majority of respondents (52%) preferred voluntary
instruments to be used in order to enhance interoperability, while 42% chose mandatory
and 6% voted for both. Firstly, the majority in favour of
voluntary instruments only slightly outweighs the number of supporters of
mandatory actions at the EU level. Secondly, the options proposed in this
Impact Assessment that envisage some mandatory enforcement of common rules to
facilitate e-invoicing interoperability in public procurement are actually a
mixture of coercive and non-coercive measures. For example Option (3) foresees coercive
measures only with regards to the Member States or contracting authorities
which have mandated or will mandate the use of e-invoicing. For the remaining
stakeholders, the use of e-invoicing would be voluntary. Similarly, Option (4)
would contain certain mandatory elements (i.e. an obligation to accept invoices
if compliant with the new European standard), but the uptake of e-invoicing
would depend on the decisions made by firms participating in public
procurement, and therefore it would have a partially non-coercive character. Taking into account the fact that the
results of the public consultation do not show a clear or overwhelming
opposition to mandatory action at the EU level and that the proposed
initiatives to facilitate e-invoicing interoperability in public procurement
contain in practice a mixture of voluntary and mandatory elements, the proposed
menu of options is fully justified and should be maintained. 5. Analysis of Impacts A specificity of a potential initiative on e-invoicing
in public procurement is that most, if not all, of its impacts would be observed
irrespective of the Option chosen, the only difference being their size and the
speed with which they would materialise. For this reason, before the impacts of
each Option are analysed, an overview of the common impacts is presented below.
5.1. The expected common impacts The removal of market access barriers is
expected to generate impacts that are mainly economic in nature, both in terms
of the costs and the benefits. The economic costs for both firms and public
bodies will be limited to the expenditures necessary for the introduction of
e-invoicing systems (e.g. acquisition of relevant software and/or hardware).
The economic benefits, on the other hand, will primarily consist of (i) lower operating
costs, as well as more clarity and legal certainty for firms active in public
procurement; and (ii) lower processing costs and lower prices for contracting
authorities due to more intense competition (i.e. more bids submitted in part
due to increased participation of firms from other Member States). Any social
and environmental costs would be limited. These impacts will be referred to in
this Impact Assessment as ‘primary impacts’. The above primary impacts will be
supplemented by additional ‘secondary’ or ’side effect’ impacts, as improved
interoperability would most probably translate into increased uptake of
e-invoicing by both contracting authorities and firms. The secondary impacts of
the initiative will be economic, social, and environmental. In some Options,
these secondary impacts are highly probable, since the availability of an
interoperable European standard in e-invoicing could encourage many market
players – which until now have been hesitant – to switch to e-invoicing. Although
the wider adoption of e-invoicing is not an objective of this initiative, the
secondary impacts will nevertheless be analysed for each Option, as they may be
significant. The division into primary and secondary
impacts to a significant extent reflects the split between the key problems and
the context identified in section 2.2 (i.e. primary impacts relate to the key
problems, while the secondary ones to the context of the low e-invoicing uptake
by the public sector). An overview of these common impacts is provided below. The
extent to which they would materialise will depend on the Option chosen (as
analysed in section 5.4). 5.2. Primary impacts As mentioned in the previous section, the
removal of market access barriers to cross-border e-invoicing would have mainly
economic impacts. The main stakeholders concerned would be firms active in
public procurement and contracting authorities. The scale of these impacts
would depend on the Option chosen - the more users align to a single solution,
the fewer market access barriers would remain. 5.2.1. Impacts on firms The establishment of a common standard would solve the
interoperability problem for firms dealing with contracting authorities which
adhere to the new rules (voluntarily or due to the mandatory nature of the new
provisions). Specifically, the availability of one interoperable and commonly
acceptable standard would attenuate the
complexity of doing business abroad and provide more legal certainty for
enterprises. It would also reduce costs for firms
which result from the need to support many different e-invoicing standards. The availability of a single standard would
be beneficial for both large enterprises and SMEs. These expected benefits are
also recognised by the firms themselves – according to one supplier active in
public procurement, “dealing with 2 or 3 standards would put us in a very
good position, but having to support one single standard would result in huge
savings, as we would realise the real benefits of business automation with minimal
setup and maintenance costs”[80].
Similar views were shared by the contributors to the European Committee for
Standardisation (CEN) workshop agreement (CWA 16461)[81], who
pointed out that” since a large number of different formats are in use, a
reduction to a small number of common format specifications (if not one), i.e.
standards, could make it much easier for an SME to get started with structured
data exchange and to address the majority of their customers (especially the
large enterprises) with one common format.” SMEs also confirm that they would
appreciate the resolution of the interoperability problem by the emergence of a
common standard. Their opinions were collected in a survey conducted within the
third Working Group of the EMSF[82] and
are provided below. Table 4): SME adoption drivers (1=least helpful; 5 = most
helpful) Models || Mean || Median Integration with SMEs’ accounting software || 4.01 || 4.00 Affordability || 3.99 || 4.00 A common national standard for invoice content || 3.93 || 4.00 Peace of mind on VAT compliance || 3.75 || 4.00 A common EU standard for invoice content || 3.67 || 4.00 Source: “Good practices in the adoption and promotion
of e-invoicing in Europe”
ACCA Discussion Paper As presented in Table 4), the availability
of a common e-invoicing standard is mentioned among the most helpful drivers
for the adoption of e-invoicing in SMEs. The introduction of a new European standard
could potentially be the source of some costs of adoption. These could include
the cost of purchase of new software and IT equipment, business disruption due
to process change, the costs of retraining staff, or potential service provider
fees for suppliers.[83] However, considering recent developments in information technology
and the nature of the software required, heavy investments should not be
necessary. The availability of cloud-based and ‘software-as-a-service’
solutions mean that in many cases, no installation of software would even be
necessary, and users could be charged on a per-use basis. Furthermore, it is important to note that
any such costs would be borne only once, as only one new standard would need to
be introduced. The risk of suppliers having to bear such costs a number of
times due to the need to support numerous other e-invoicing standards would be
eliminated. The ‘avoided costs’ can effectively be considered as an overall
cost reduction or as potential savings. The scale of the potential savings can
vary greatly depending on, among other factors, the type of solution chosen,
the business model and pricing schemes of service providers, and the volume of
invoices generated by the supplier. The huge variety of e-invoicing business
models[84] and cost structures[85] that
exists on the market makes any attempt to provide a precise aggregate figure
difficult. Finally, further potential savings for
firms may come from some adaptations of the pricing schemes and market
structures for e-invoicing transmission, since the e-invoicing service
providers would have to modify their business models to support the new
interoperable standard. The availability of a common solution may for example
reduce the roaming (i.e. e-invoice transfer) fees. This observation is shared
by stakeholders: during discussions in the EMSF, the
opinion was voiced that a common standard would simplify communications between
service providers by removing the need for them to constantly agree on which
standard is to be used. Similarly, according to Deutsche Bank Research, “Interoperability would […]
further expand and promote the existing competition between providers with its
positive impact on innovation activity and the value for money offered”. This should help to reduce the operating costs for suppliers even
further. Summarising, the introduction of a single
interoperable solution would be beneficial for enterprises, both large and
SMEs: they would need to invest only once in the adaptation to the common EU
e-invoicing standard, whereby their costs would be proportionately reduced. 5.2.2. Impacts on contracting
authorities Any measure requiring the use of a new
European e-invoicing standard would impact the way contracting authorities
carry out procurement, and would therefore generate operational costs for
contacting authorities and/or Member States. Depending on whether Member States
and/or contracting authorities react positively, a recommendation to take up
the new standard could have a similar effect. As mentioned in section 5.2.1
above, however, it seems that that these costs would not be excessive and would
in any case be outweighed by the expected benefits (i.e. operational savings
from e-invoicing and lower prices in public procurement due to enhanced
competition). Several examples of estimated costs to
public administrations – based on existing projects to introduce e-invoicing in
the public sector – are provided below. Although the available data do not
allow to distinguish between the savings from operational enhancements and
savings due to increased competition in all cases, the figures for estimated
savings are provided as an indication of the possible economic benefits
resulting from the take up of e-invoicing[86].
They all show a positive cost-benefit ratio. · Estimates made in 2004 by officials in the Scottish Executive showed
that the introduction of e-invoicing would reduce administrative costs by
around £5.4 million during the first four years of implementation. The total
cost of implementing such a project were estimated at around £600 000 during
the first two years[87]. · Belgium estimates that the costs of implementation of its
e-invoicing pilot project in the federal government will amount to
approximately 370 000 EUR for basic infrastructure and support services, while
yearly savings in excess of 3 million EUR will be generated (not including the
judicial sector)[88].
· In Spain the costs and benefits of an introduction of e-invoicing in
the central government administration and related bodies (excluding the social
security agency) are estimated to be about 100 000 EUR per annum, based on
the creation of a central management model/platform to receive all e-invoices
submitted to the central government administration. Savings to the central
government from the move towards e-invoicing are estimated to be about 2.5
million EUR per annum[89]. · Norwegian municipalities estimated that a requirement to switch to
structured e-invoicing based on a common standard for all incoming invoices
would generate costs for suppliers peaking at some NOK 400 million (about 54
million EUR at current exchange rate) per annum 3 years after the introduction of
the scheme. Then costs would steadily decrease and savings accruing to
suppliers would exceed their costs by the 4th year. The total NPV of the
benefits accruing to suppliers were estimated to be NOK 2077 million over a 10
year period (about 280 million EUR). A similar assessment of the introduction
of mandatory e-invoicing in the Norwegian central government administration
made in 2008 also concluded that there would be a net present value for
suppliers, estimated at 178 million NOK (about 24 million EUR at current
exchange rates)[90]. The available data thus indicates that the
cost-benefit balance of the adoption of e-invoicing by public administrations
is generally positive. In other words, the costs generated by any measure where
the contracting authorities or Member States would be asked either to align to
a new European standard or to adapt to e-invoicing more broadly would be
outweighed by its expected benefits. Additionally, the removal of market access
barriers should also result in more cross-border bids
submitted by firms and therefore lead to increased competition (or at
least increased competitive pressure) in public procurement. As explained in section 2.2.4, currently
some potential suppliers wishing to bid on a public procurement contract in another
Member State might decide not to do so if the contract requires the subsequent
submission of e-invoices in a standard which they do not support. However, if
such barriers were removed, these suppliers may decide to participate. This
would result in more bids (more competition) and should
in principle lower the prices paid by contracting authorities for goods, works
and services that they purchase. As presented in Figure 8) below, based on
aggregated data available for 2011, a positive relationship can be observed
between the number of tenders received and the extent of savings: the higher
the number of bids received on a given public procurement tender, the greater
the savings realised. For example, if a contracting authority receives two bids
instead of one, the typical saving per contract raises from 3% to 8%. Figure 8): Relationship between the number of
tenders received and savings over expected expenditure Source: 2011 average saving (as % of
estimated price) on public procurement contracts in the EU compared with the
number of bids received, estimates by DG Internal Market and Services based on
OJ/TED data. The above example shows that increased
competition induced by the removal of market access barriers in public procurement
is likely to translate into tangible savings for contracting authorities. 5.3. Secondary impacts As mentioned in the introduction to the
impacts chapter, the adoption of a new EU e-invoicing standard may generate
secondary impacts through the increased uptake of e-invoicing in public
procurement. This increase in the use of e-invoicing (which is highly probable
in some Options) would be the source of certain economic, social, and
environmental impacts. 5.3.1. Economic, social, and environmental
impacts The economic impacts of an increased uptake
of e-invoicing would be basically linked to savings to the economy generated by
the expected savings in the public procurement cycle, i.e. reduction of
operating costs for buyers and sellers, increased transparency, faster payment
processing times. However, as far as secondary impacts on firms are concerned,
it is assumed that these impacts are more positive if firms are allowed to
switch to e-invoicing at their own speed.[91]
The social impacts are expected to be
neutral – they may involve some reassignments or redundancies in selected
sectors (e.g. public administration, postal services, paper production) but
these should be marginal and would most likely be counterbalanced by job
creation due to the identified savings. The environmental impacts are expected
to be positive – they would above all translate into a reduced use of paper and
lower CO2 emissions. A more detailed analysis of economic, social and
environmental impacts of increased uptake of e-invoicing is provided in Annex
1.3. 5.3.2. Reduction of administrative
burden The broader uptake of e-invoicing would
also contribute to the reduction of administrative burden through the
automation of invoicing procedures, including validation and processing of invoice
data. By definition, this will reduce the burden of dealing with invoices on
both the sender’s and the recipient’s side. Additionally, the availability of
invoice data electronically would simplify auditing and tax collection by the
Member States’ tax authorities, as well as the preparation of any reports which
need to be provided by the company. This would in turn reduce the
administrative burden on enterprises. Importantly, due to the fact that such
administrative requirements usually weigh more heavily on smaller enterprises,
the reduction of administrative burden resulting from the introduction of
electronic invoicing would be particularly beneficial to SMEs. Due to the high potential of e-invoicing in
public procurement to reduce administrative burdens, the initiative has been
included on the list of actions with a potentially significant positive impact
on administrative burden reduction, contained in Annex II of the Commission
Work Programme for 2013[92].
The recent Communication “Entrepreneurship 2020 Action Plan – Reigniting the
entrepreneurial spirit in Europe”[93]
also mentions this initiative. 5.3.3. The scale of secondary impacts The overall
secondary impacts of each Option would to a large extent depend on the expected
scope of e-invoicing adoption – the extent to which the appearance of an
interoperable e-invoicing solution influences a wider adoption of e-invoicing
across the EU will have the greatest impact on the macro scale. Clearly, the
wider the adoption, the greater the economic and environmental benefits from e-invoicing
(the more significant the impacts). Similarly, the faster the adoption, the
sooner the secondary impacts of wider e-invoicing uptake would emerge. The expected scale
of secondary impacts will be analysed separately for each Option. 5.4. Impacts of defined options As mentioned in the introduction to Section
5, the common impacts are expected to materialise in all Options, but to a varying
degree depending on the case. In order to discuss these differences, the impacts of each Option will be compared using the following
grid: · Primary impacts – generated by the removal of market access barriers
in cross-border public procurement / enhanced interoperability (economic); · Secondary impacts – generated by potential ‘side effects’ of the
availability of an interoperable technical solution in e-invoicing, which may
lead to an increase in the uptake of e-invoicing (economic, social, and
environmental). 5.4.1. Option (1): No new EU action The baseline scenario was described in
section 2.3. The current situation confirms that the objectives of this
initiative would not be fully met if Option (1) were retained. Table 5): Impacts of Option (1) Primary impacts (related to improved interoperability) || Interoperability would not be ensured – market access barriers would most probably remain and/or worsen. Secondary impacts (related to increased uptake of e-invoicing) || Some secondary impacts may appear, but because of the voluntary nature of this Option, the scale of these impacts is uncertain. 5.4.2. Option (2): Free-choice
approach The second Option would be similar to the
“no EU action” approach, as market users would retain their freedom to choose
any technical solution that they find best suited to their needs. However, a
new (interoperable) European e-invoicing standard would be developed and made
available to the market, with a recommendation (but without any obligation) to
use it in public procurement. With the introduction of the new e-invoicing
standard merely recommended and not required, several significant risks remain
which may prevent the objective of interoperability from being achieved. The
acceptance of e-invoices in the European standard would remain at the
discretion of each Member State and/or contracting authority, who may decide
not to accept it. This could lead to the continued co-existence of several e-invoicing
standards across the EU, or even within an individual Member State. There is therefore
a high likelihood that the cost burden on enterprises would not decrease, as
they would be forced to maintain numerous e-invoicing standards at the same
time in order to be able to meet various technical requirements of other Member
States (especially if mandatory e-invoicing is required by the public buyer). Should
they choose not to do so, potential business opportunities would be foregone. As far as the objective of this initiative
is concerned, it would not be achieved, as interoperability would remain
problematic. An impediment to the effective operation of the Internal Market
would remain. Due to the very large number of agreements
required between invoicing parties in order to ensure a satisfactory level of
interoperability, the self-regulation process is practically certain to be much
more time consuming and more costly than standardisation by CEN. Secondary impacts would be observed only to
the extent to which a switchover to e-invoicing occurs. It can be expected that
the availability of a common standard might encourage some market players to
make this decision (presumably more than would be the case if no common
standard were available), but due to the voluntary nature of this Option, the
scale of this process is difficult to predict. Table 6): Impacts of Option (2) Primary impacts (related to improved interoperability) || Interoperability would be only partially facilitated (depending on the scale of uptake of the new European standard); numerous e-invoicing standards would still co-exist on the market, so the cost burden on enterprises would remain. The self-regulation approach is more costly that the CEN process and its results are uncertain. Secondary impacts (related to increased uptake of e-invoicing) || Some secondary impacts may appear, but because of the voluntary nature of this Option, the scale of these impacts is uncertain. 5.4.3. Option (3): Selective
conversion to e-invoicing In this Option, contracting authorities
and/or Member States which on their own initiative mandate the submission of
e-invoicing in public procurement, would be required to accept electronic
invoices in the agreed European standard as of that point in time. While not imposing
the use of a new European e-invoicing standard in public procurement on all
contracting authorities, this Option would nevertheless have some positive
impacts: among those Member States / contracting authorities which have made
(or will make) e-invoicing mandatory, the interoperability issues would
effectively be resolved. Nevertheless, the possibility of different legal interpretations
of the future e-invoicing provisions may become a source of complexity and
legal uncertainty, which undermines the achievement of one of the two specific
objectives. On the other hand, for Member States / contracting authorities
which do not make e-invoicing mandatory, the effects of this Option would be
identical to those of Option (2) – i.e. there is no guarantee that the
objective of the initiative would be achieved. Overall, the main benefit of this Option
would be that interoperability would be facilitated: its implementation would
lower the costs and complexity of e-invoicing for enterprises, which could now expect
to be able to send electronic invoices in a single standard to any contracting authority
which mandates e-invoicing. However, two risks would remain that it would not
be ensured entirely: firstly, if some Member States delay the introduction of
mandatory e-invoicing (perhaps as a result of the implementation of this
Option); secondly, when e-invoicing is required de facto, but not
mandated in the legal sense (de jure). The implementation of this Option
may therefore involve legal uncertainty for firms. As far as the broader policy context is
concerned, this Option might have some negative side-effects. On the one hand, Member
States / contracting authorities which have already required the transition
towards e-invoicing in public procurement would be negatively affected because
the obligation to adapt to the new standard would at first only concern them.
On the other hand, Member States / contracting authorities which have no plan
to switch to e-invoicing would not face any specific new obligations. This ‘asymmetric’
treatment of Member States (obligation put only on the front-runners vs.
lenient treatment of laggards) might act as a disincentive: since any such move
would require the (additional) introduction of the new European standard, it
could discourage those Member States which have not yet adopted e-invoicing
from doing so quickly. . Moreover, leaving the option to "do nothing"
to Member States that currently do not use e-invoicing in public procurement
also calls into question whether this option constitutes a real harmonisation
measure. The scale of the secondary impacts of this
Option is difficult to predict. Even if all Member States do eventually decide
to opt for e-invoicing the process might take a very long time. As a result,
the potential benefits of greater cost efficiency in public procurement would
not materialise or would do so only very slowly. Nonetheless, even if only some
Member States introduce mandatory e-invoicing and therefore take up the EU
standard, this would generate net savings for all stakeholders. Table 7): Impacts of Option (3) – summary Primary impacts (related to improved interoperability) || Interoperability would be facilitated as invoices sent in the European standard would have to be accepted by all public buyers which mandate e-invoicing, but the implementation of this Option may involve some legal uncertainty. The costs of the process would be proportionate as existing e-invoicing systems would not be replaced by the new solution. Secondary impacts (related to increased uptake of e-invoicing) || The asymmetric treatment of contracting authorities / Member States may deter some potential ‘candidates’ from switching to e-invoicing. As the overall balance of indirect/secondary impacts is positive, these benefits will materialise, but probably at lower speed than with the two following Options. 5.4.4. Option (4): Obligatory
acceptance In Option (4), a new, European standard
would be developed and made available for use by all market operators. In this
scenario, acceptance by all contracting authorities of e-invoices compliant
with this standard would be required in public procurement, without however
replacing other existing technical solutions (i.e. the invoice could still be
sent in another standard if both parties so choose). This Option would ensure that the
operational objective of the initiative would be met rapidly: the requirement
to accept e-invoices compliant with the European standard would effectively ensure
interoperability and hence remove market access barriers as of the day when the
provisions enter into force. The actual uptake of the
proposed measures would depend on firms’ decisions to use e-invoicing and
adhere to the new European standard. It is however expected that their response
would be satisfactory, as the new standard would be the only one that involves
the additional incentive of technical acceptance in public procurement across
the EU. Additionally, the availability of a single technical solution /
standard was frequently mentioned by firms as a prerequisite for the adoption
of e-invoicing[94],
therefore the appearance of the European standard on the market is expected to
prompt the hesitant economic operators to switch to e-invoicing. Option (4) may provide a ready-made
solution and guidance for those Member States which have not yet implemented
e-invoicing but are considering doing so. This Option could act as a stimulus
for Member States to prepare the necessary systems early on. The fact that they
could also keep using their own national systems should minimise any potential
transitional costs in Member States which have already developed national e-invoicing
systems (for example, firms which never enter into cross-border contracts could
continue to use existing, familiar solutions for all their business with the
public sector). Other Member States could use the common standard as a basis
for developing their national e-invoicing systems, taking a significant
proportion of the risk and cost out of developing national solutions. For enterprises, this option would create
the certainty that any necessary efforts and initial expenditures will not go
to waste and will be amortised within a fairly short period of time. Finally,
the knowledge that an investment into one single solution will allow the
sending of e-invoices to any contracting authority in any Member State should
prove to be a convincing factor for enterprises – including SMEs – to launch
the process of switching over to e-invoicing. Furthermore, the fact that i) only one
(additional) standard would need to be supported both by firms and by
contracting authorities/contracting entities, and ii) the existing e-invoicing
systems/standards would not be replaced by the new European standard, but could
continue to be used if the parties agree, means that the costs of implementing
this option would not be excessive, especially considering the expected
benefits. Social and environmental impacts would be
observed only to the extent to which a switchover to e-invoicing occurs.
Nevertheless, it can be expected that the availability of a European standard
would encourage more market players to make this decision than if no common
standard were available. Although the scale of this process is difficult to
predict, it would be most probably be more significant that in the previous
Option. The secondary impacts would therefore very likely materialise to a large
extent. Table 8): Impacts of Option (4) – summary Primary impacts (related to improved interoperability) || Interoperability would be ensured as invoices sent in the European standard would have to be accepted by all public buyers. For firms, the costs and complexity of interoperability would decrease. The costs of the process would be proportionate as existing e-invoicing systems would not be replaced by the new solution. Secondary impacts (related to increased uptake of e-invoicing) || The availability of an interoperable European standard and obligation to accept invoices sent in such a standard if a successful firm opts for it, may significantly increase the uptake of e-invoicing. As the overall balance of secondary impacts is positive, the implementation of this Option would allow these benefits to materialise. The speed of adoption of e-invoicing would be at the discretion of firms, so no excessive costs are expected. 5.4.5. Option (5): Full harmonisation This last option differs from the previous
one in the sense that invoices in currently existing formats/standards would no
longer be permitted. In practice, this would mean that the standardisation
efforts would need to go beyond the semantic level and would address also the syntax
level. This approach would therefore result in a full harmonisation of
e-invoicing within above-threshold procurement in the EU, and would therefore reduce
the associated complexity and costs as of the day when the provisions enter
into force. All of the primary impacts would therefore be certain to
materialise. As the uptake of e-invoicing would almost
certainly increase due to the great simplification and reduced cost of its use,
the secondary impacts can be expected to materialise to an important extent.
However, this approach would also mean significant additional effort and
expenditure to implement the new standard in those Member States which have already
made large investments to develop functioning e-invoicing systems, as existing
systems would need to be replaced. Any such previous investments in these
Member States would effectively have been wasted. Such an approach would to a
large extent negate the economic benefits of greater uptake and meet strong
political opposition from Member States which already have e-invoicing systems
in place. For economic reasons, this approach would also
be highly disruptive and costly for the service providers, as they would have
to entirely redesign their systems. Considering that in implementing this
option a significant amount of resources will have been wasted, such an approach would not be in agreement with the principle of proportionality,
as the same goals could clearly be achieved by less intrusive means. Table 9): Impacts of Option (5) – summary Primary impacts (related to improved interoperability) || Interoperability would be ensured as invoices sent in the European standard would have to be accepted by all public buyers. Interoperability costs and complexity for firms would decrease, but the implementation costs for Member States and contracting authorities who currently use other e-invoicing systems/standards would be disproportionately high. This Option raises concerns with regards to the proportionality principle. Secondary impacts (related to increased uptake of e-invoicing) || The obligation to exclusively accept e-invoices sent in the European standard would most probably increase the uptake of e-invoicing, but the benefits of broader use of e-invoicing would be counterbalanced by the expected cost of this option. 6. Comparing the Options An analysis of the options identified in
Section 4 is presented below in terms of achieving the stated objective and in
terms of their impacts on the different groups of stakeholders. 6.1. Comparing the options against
the operational objective In order to select the most appropriate approach,
the different Options will be compared using the criteria of effectiveness, efficiency
and coherence. The evaluation
of the effectiveness of the Options will be analysed taking into account the
extent to which they solve the interoperability problem (i.e. whether or not
market access barriers to cross-border procurement are effectively removed), as
this is the main objective of this initiative. Within the comparison of the efficiency
aspects of the analysed Options, the cost-benefit ratio of the proposed
implementation methods will be analysed. As explained in section 5.4.4, it is
proposed to develop a new European e-invoicing standard to facilitate interoperability.
In order to ensure the technological neutrality of this new standard and the
transparency of the standardisation process[95], the
European Standards Organisations appear to be the most appropriate bodies to
implement this task at the EU-level. Considering the content of the future
European standard (and the work which has already been undertaken within its
working groups to facilitate e-invoicing interoperability[96]), the issuing of a mandate to CEN to draw up a new European
standard on e-invoicing is proposed as the optimal way to proceed. As mentioned
in Annex 1.9, it seems that the only alternative approach that might possibly
be considered is self-regulation by stakeholders. Self-regulation is the
essence of Option (1) and it constitutes one of two parallel processes in
Option (2) – the other being standardisation by CEN with the voluntary adoption
of the results by stakeholders. As far as the third criterion is concerned,
coherence will be evaluated above all with regards to the expected secondary
impacts of the increased uptake of e-invoicing, which are in line with the
objectives of the "Digital Agenda for Europe"[97] and the 2010 e-invoicing Communication[98] from
the Commission. Additionally, it is assumed that the broader adoption of
e-invoicing would also be coherent with the Commission policies concerning
e-procurement, especially the Commission proposal on the revision of public
procurement rules from 2011[99] and the objectives of the late payment Directive (2011/7/EU)[100]. Table 10): Comparing the options against the
operational objective || Objective - improve/facilitate e-invoicing interoperability in public procurement Policy options || EFFECTIVENESS || EFFICIENCY || COHERENCE[101] Option (1): No new EU action || 0 || 0 || 0 Option (2): Free-choice approach || (+ / ?) Interoperability would be facilitated only partially (depending on the scale and timing of the adoption of the new European standard). || (≈) The self-regulation approach is more costly that the CEN process and its results are uncertain. Timely achievement of the objective cannot be ensured. || (?) Some secondary impacts may appear, but their scale and timing is uncertain because of the voluntary nature of this approach. Option (3): Selective conversion to e-invoicing || (+) Interoperability would be facilitated, as invoices sent in the European standard would have to be accepted by all public buyers which mandated e-invoicing, but the implementation of this Option may involve some legal uncertainty. || (+) The CEN process to establish a standard is the optimal way to achieve the objective (the costs of the introduction of the new standard are proportionate). Timely achievement of the objective can be expected. || (- / ?) The asymmetric treatment of contracting authorities / Member States may deter “candidates” from switching to e-invoicing (hence some potential benefits could be lost). Some secondary impacts may appear, but their scale is uncertain. It is not clear whether or not this Option constitutes a harmonisation measure. Option (4): Obligatory acceptance || (+ +) Interoperability would be ensured as invoices sent in the European standard would have to be accepted by all public buyers. || (+) The CEN process to establish a standard is the optimal way to achieve the objective (the costs of the introduction of the new standard are proportionate). Timely achievement of the objective can be expected. || (+ / ?) Positive secondary impacts of e-invoicing would materialize to the extent to which the switchover occurs. The adoption of e-invoicing would be at firms’ own speed, so no excessive costs expected. Option (5): Full harmonisation || (+ +) Interoperability would be ensured as invoices sent in the European standard would have to be accepted by all public buyers. || (- -) The CEN process to establish a standard is the optimal way to achieve the objective (the costs of the introduction of the new standard are proportionate). Disproportionately high implementation costs for Member States and contracting authorities who use other e-invoicing systems which would have to be abandoned. Timely achievement of the objective can be expected. || (≈) Positive secondary impacts of e-invoicing would materialise to the extent to which the switchover occurs. The above benefits would be counter-balanced by concerns with regards to the proportionality principles. Magnitude of
impact as compared with the baseline scenario (the baseline is indicated as 0):
++ strongly positive; + positive; – – strongly negative; – negative; ≈
marginal/neutral; ? uncertain; n.a. not applicable From the table above, it becomes evident
that, when compared with the baseline scenario, Option (4) appears to be the
most effective and efficient in achieving the operational objective of this
initiative. It is also coherent with other objectives of EU policy and its
overall cost-benefit balance is the most favourable. The effects of Option (3) would be slightly
less effective and efficient in terms of achieving the operational objective of
this initiative (facilitating interoperability). However, its coherence remains
negative to uncertain (-/?), since the proposed provisions could be contrary to
the objectives of other EU policies, as they might discourage Member States
from switching to e-invoicing in the future. Finally, this Option may be too
selective to be classified as a harmonisation measure. The net balance of scores allotted to the
remaining Options for all elements under the analysis is less favourable than
the baseline scenario. 6.2. Comparison of options across
all stakeholder groups The different options presented above will
have different impacts on the different groups of stakeholders. With the
exception of the baseline scenario, which implies the continuation of current
policy, these are summarised in Table 11) and analysed below. Table 11): Comparison of options across stakeholder groups Stakeholders Policy options || Member States and / or contracting authorities WITHOUT mandatory e-invoicing || Member States and / or contracting authorities WITH mandatory e-invoicing || Firms(including SMEs) || Service providers Option (1): No new EU action || 0 || 0 || 0 || 0 Option (2): Free-choice approach || (?) || (?) || (-) || (? / +) Option (3): Selective conversion to e-invoicing || (?) || (≈ / -) || (+) || (» / +) Option (4): Obligatory acceptance || (+) || (≈ / -) || (+ +) || (» / +) Option (5): Full harmonisation || (+) || (- -) || (- -) || (- -) Magnitude of
impact as compared with the baseline scenario (the baseline is indicated as 0):
++ strongly positive; + positive; – – strongly negative; – negative; ≈
marginal/neutral; ? uncertain; n.a. not applicable 6.2.1. Member States / contracting authorities The impacts of the different Options on
Member States (understood here as the policymakers) are analysed together with
contracting authorities directly involved in public procurement, as the initial
analysis has shown that the emerging patterns for these two groups of
stakeholders are very similar. Instead, a different distinction has been made,
namely between those Member States / contracting authorities which have already
introduced mandatory e-invoicing and those which have not (yet) done so. 6.2.1.1. Member
States / contracting authorities WITHOUT mandatory e-invoicing For those Member States / contracting authorities
which have not yet mandated e-invoicing, all the Options where the introduction
of a common standard is expected to broaden the uptake of e-invoicing receive a
positive score. The implementation of e-invoicing systems would imply some costs,
but it would also mean that savings could be generated through operational
efficiencies in the procurement cycle, simplification of tax collection and
auditing, and reduced environmental impacts. The voluntary nature of Option (2) would
not guarantee that an invoice in the European standard is accepted by the
recipient. This means that the impacts for Member States or contracting
authorities are uncertain, as the decision to support the new standard would be
at their discretion. As Option (3) leaves room for manoeuvre for
Member States / contracting authorities which do not yet have mandatory
e-invoicing, the effect of this Option is difficult to assess due to the
uncertainty of the progress of implementation of the new standard (they will
not be obliged to implement it, but may do so on a voluntary basis). Overall,
the impacts of Option (3) for those Member States are marked as uncertain. Options (4) would be efficient for the Member
States / contracting authorities which have not yet mandated e-invoicing, as
they would not require investments in parallel e-invoicing standards – they
would be only obliged to ensure that invoices compliant with one standard (i.e.
the European standard) are accepted / read by their IT systems. Options (4) and (5) score better than
Option (3) due to a greater certainty that the benefits would be realised, and
a significant possibility that they would be larger due to the additional
efficiency and savings resulting from the adoption of e-invoicing (secondary
impacts). 6.2.1.2. Member
States / contracting authorities WITH mandatory e-invoicing Option (2) would leave the decision on
whether or not to support the new standard to the Member States / contracting
authorities. The ultimate uptake of the standard by stakeholders who have their
own e-invoicing systems in place is difficult to predict – if they adopt the
new standard, there is no way of knowing whether they would abandon their own
technical solution entirely or expand the functionalities of their IT systems
to read both standards in parallel. Therefore the impacts of this Option for
Member States or contracting authorities are marked as uncertain. For Member States / contracting authorities
which currently have mandatory e-invoicing in place, Options where the
introduction of a common standard could broaden the uptake of e-invoicing would
effectively have no impact, since they already have a functioning e-invoicing
system in place. In other words, the benefits of e-invoicing are not considered
in case of Member States with mandatory e-invoicing, as the benefits which
would be generated are already present in these countries (i.e. Options (3),
(4) and (5)). The need to implement technical solutions to enable the
acceptance of the new European standard in parallel to its own national
standard (e.g. Options (3) and (4)) would generate some implementation costs.
However, as demonstrated in section 5.5.2., it is expected that the benefits
from increased competition in public procurement would outweigh the additional
costs of the introduction of the new European standard. Strongly negative impacts appear only when
these Member States would be forced to entirely switch to the new European
standard (Option (5)) for all above-threshold procurement. This Option would
imply significant additional expenditures in order to replace the current
e-invoicing systems with the new European standard. Any legislative efforts and
expenditures already undertaken will effectively have been wasted. 6.2.2. Firms (including SMEs) The selection of Option (2) would be negative
for firms, as it would mean that there would be no assurance that an
interoperability framework would allow them to use – and therefore to invest in
– a single standard for all of their invoicing activities. While the
recommendation of a common standard could convince Member States take it up,
there would be no guarantee that this would be the case. This implies a high
risk that enterprises would in one way or another need to support the many
different standards used by their customers, which means that the complexity
and higher costs of taking part in cross-border public procurement would
continue. The impacts of Options (3) and (4) on
enterprises would overall be positive, as they would no longer need to support
several e-invoicing standards while remaining free to make the decision at
their convenience on whether or when to introduce e-invoicing capabilities.
Firms would also be certain that the introduction of the ability to invoice
electronically using the common standard would mean that they could seamlessly
send invoices to any contracting authority throughout the EU – in Member States
which made e-invoicing mandatory for Option (3) and all contracting authorities
in Option (4). This could potentially open a number of new business
opportunities which they would not have considered before. In addition, the
mandatory acceptance of e-invoices across the EU would mean that any initial
investments would be more quickly amortised by the potential savings, meaning
that Option (4) would be slightly more positive. Finally, Option (5) would bring certain
benefits to enterprises, since even though they would need to bear the
investment costs associated with the introduction of the new standard,
potential costs of using multiple e-invoicing standards would have been
avoided. However, those enterprises which have already introduced e-invoicing
on the basis of existing national and or proprietary standards would need to
replace these with the new, common standard. This would mean that any
investments undertaken previously would have been wasted. Although the uncertainties
of insufficient interoperability would be remedied, the coercive nature of
Option (5) in terms of the exclusive use of one only solution may result in
excessive burden, especially for SMEs and microenterprises, who may not be
technologically ready to adapt to “across the board” solutions. As a result,
this Option generates significant additional costs without creating any new
benefits and is scored as a strongly negative choice. 6.2.3. Service providers The impact of Option (2) on service
providers is expected to be uncertain to positive. On the one hand, a
recommendation to use the new European standard might over time lead to a
greater uptake of e-invoicing across the EU, and therefore to increased
business opportunities for service providers. If the recommendation of a common
standard results in at least some Member States taking it up, this would mean that
a lower number of standards would need to be supported and mapped to, and that
the need to constantly agree on a common standard to use in exchanging invoices
would be eliminated. The result would be lower operating and investment costs
on the one hand, but potentially also lower income due to a reduced need for
mapping on the other. On the contrary, if the voluntary uptake of a common
standard ends up having a limited impact on the market and a proliferation of
national standards, this would potentially be a source of more investments for
service providers, but equally a potential source of additional income. Since
the aspect of potential use of the new standard and a consequent increase in
e-invoicing uptake is very difficult to assess in advance, the impacts of this
Option cannot be easily predicted, hence the (? / +) score. Theoretically, any Option that increases
the probability of a wider uptake of e-invoicing in public procurement would
potentially be positive for service providers as it would increase their
business. Following this approach, the impact on service providers of Options
(3) and (4) should be judged as positive. However, while on the one hand
business can be expected to increase due to increased uptake of e-invoicing
which these Options may trigger, there is a potential that some market
operators will stop using the services offered by the service providers as they
could opt for bilateral models based on the common standard. Additionally,
while the availability of one common standard would reduce the investments
which would need to be undertaken by the service providers, the threat of
enterprises sending their invoices either directly to contracting authorities
or through other service providers (of which the great majority would certainly
wish to support the new standard) would drive down the fees which would be
charged for the mapping. As a result, Options (3) to (4) would most probably be
only slightly beneficial to the service providers. Finally, the full harmonisation proposed in
Option (5) would have a significantly negative effect on service providers. As
all standards with the exception of the new, common one would disappear, so
would the need for mapping between different standards. This implies that the
service providers would lose a significant portion of their business. Although
there would still be some demand for their services by those market operators
which prefer not process invoices directly, there is a risk that a significant
proportion of the currently over 400 - 500 service providers might go out of
business altogether. 6.3. The preferred option From Table 10 in section 6.1, it is
possible to see that Options (4) and (5) ensure that the objective of the
initiative will be met (i.e. they are fully and equally effective). All Options
would require some cost and effort to develop the new standard, but Option (5)
has the additional significant drawback of requiring that all work already
undertaken at a national level would need to be abandoned. The score of Option
(2) is relatively low, even on the effectiveness criterion. Option (3) could
constitute a viable solution, as its score is positive for the effectiveness
and efficiency criteria, but its coherence remains problematic. As far as the impacts on stakeholders are
concerned, Option (4) is the most advantageous for enterprises, and
consistently rates as one of the two most favourable Options for all remaining
stakeholders. Therefore, overall the most appropriate
solution appears to be Option (4): · firstly, it would require that all contracting authorities must
accept electronic invoices if they are sent in a new, common EU invoicing
standard as of a particular date, thus overcoming the fragmentation inherent in
the current patchwork of national e-invoicing systems and guaranteeing the
integrity of the Single Market; · secondly, the transition to e-invoicing would occur on a firm’s
initiative, thus not generating unnecessary costs, especially for SMEs; the
non-intrusive (‘at market speed’) nature of such provisions would also respect
the subsidiarity and proportionality principles; it is expected that actual
uptake of the proposed measures would be satisfactory, as the new European standard
would be the only one that involves the additional incentive of technical
acceptance in public procurement across the EU; · thirdly, there is a high probability that this Option would induce a
broader transition to e-invoicing for contracts covered by the Directives, thus
capturing the full efficiency gains and economic savings offered by
e-invoicing; · finally, it would allow both firms and contracting authorities to
continue using existing national invoicing systems, thus reducing the cost and
disruption of the transition for both groups. The chosen approach would combine the
strong stimulus of an obligation to ensure interoperability in e-invoicing in
public procurement with a more flexible approach as to the most appropriate
means of ensuring the use of e-invoicing as such. The recipients of invoices
would have full flexibility as to how they would ensure their acceptance –
directly, or using a three-corner or a four-corner model. The introduction of
the new standard and the requirement to accept all invoices which use it would
reduce the compliance costs, thereby greatly improving the chances for a broad
take-up and spill-overs into other sectors (B2B, below-threshold procurement,
etc.). 6.3.1. Timeframe In line with the calls by the Member States
and by the European Parliament (Section 2.1.3) as well as by stakeholders
(results of public consultation presented in section 1.2.1 and Annex 1.11), it
is proposed to implement this initiative for all contracting authorities within
as short a deadline as possible. Taking into consideration the necessity of
developing a common standard and the time which this requires (see: Section
6.3.3 below), the most realistic deadline for the introduction of an obligation
to accept the new European e-invoicing standard appears to be between 2017 and
2018. This timeframe is also consistent with the 2010 e-invoicing
Communication, which called for e-invoicing to become the predominant method of
invoicing by 2020 in Europe, and with the expected date of the launch of
mandatory electronic public procurement, which is contained in the draft
revised public procurement directives currently under discussion in the
European Parliament and the Council. Linking the implementation timelines of
these two closely related initiatives would multiply the benefits identified in
both by further streamlining the entire public procurement process and
increasing the level of digitalisation of Member States’ public authorities. The approach presented above would be
closely aligned with the views of stakeholders presented during the public
consultation. The obligation for contracting authorities to accept e-invoices
reflects the wish of stakeholders to see mandatory steps undertaken to increase
the use of e-invoicing in public procurement. While the provision of a common
European standard would lower the costs and complexity for suppliers and
contracting authorities (the main expected benefits identified in the
consultation), the ability to continue to submit paper invoices and e-invoices
in existing formats as long as this is permitted by the Member States reflects
the wish of stakeholders for voluntary instruments to enhance interoperability.
The goal of implementation within the 2017-2018 timeframe reflects the wish of
stakeholders to move forward quickly, while taking into consideration the
restrictions imposed by the need to develop a new standard. Finally, the
application of the initiative to contracting authorities at all levels and the
inclusion of invoices in all relevant sectors but stemming only from
above-threshold public procurement are once again reflective of the opinion of
the majority of the stakeholders. 6.3.2. Participation of
microenterprises The Impact Assessment has brought to light
a couple of elements related to the use of e-invoicing by microenterprises.
Microenterprises represent only a small fraction of firms which participate
successfully in public procurement[102].
In light of the above, the question arises whether the initiative on
e-invoicing in public procurement should also cover microenterprises. After an analysis of the potential costs
and benefits to microenterprises of the current initiative, it is proposed to
include them in its scope. This decision is based primarily on the
consideration of the impact of the chosen Option on those microenterprises which
do wish to take up e-invoicing. In a case where they would be excluded,
microenterprises would be the only firms (contrary to all larger firms) without
guarantee that contracting authorities would have to accept their e-invoices.
Additionally, by including microenterprises in the scope of this initiative,
they would gain access to new business opportunities by ensuring that they
would not be excluded from participating in cross-border public procurement
only due to different e-invoicing requirements. On the other hand, there would be no
negative impacts on microenterprises which do not wish to use e-invoicing. If
Option (4) is implemented, the decision whether or not to send e-would be up to
each firm. As such, those microenterprises which wish to remain with paper
would not be negatively impacted in any way. An exclusion of microenterprises from this
initiative would also place additional burden on contracting authorities, which
would need to monitor the size of enterprises with which they are dealing. This
would not only increase costs and complexity, but might lead to errors and a
risk of legal challenges. These risks are even more significant considering
that the size of a company can change through time – sometimes quite rapidly.
Finally, there do not appear to be any clear benefits for contracting
authorities from the exclusion of microenterprises from the current initiative. 6.3.3. Regulatory form As to the form of a possible legislative
act which would implement the chosen option, a directive appears to be the most
appropriate choice. The proposal envisaged under Option
(4) only imposes on the Member States an obligation to achieve certain results,
while leaving them the choice of how to do so (e.g. regarding the governance
arrangements or technical infrastructures that will be used to implement the
new e-invoicing standard in public procurement). These choices may need to be
developed in national legislation transposing the legislative proposal (draft directive)
envisaged under the preferred Option. The choice of legal form for the
Commission's legislative proposal is determined both by the chosen legal basis
and by the content of the proposal. As mentioned previously, Article 114 TFEU
is the appropriate legal basis for this proposal. In principle, this article
leaves open the choice of either a directive or a regulation as the legal form
of a proposal. However, since the scope of the proposal envisaged under the
preferred Option would match that of the Directives, it may also be necessary
to use the other legal bases of the Directives (i.e. Articles 54.1 and 62
TFEU). This would imply that the only possible legal form would be a directive.
This point will be explored further during the preparation of the proposal. 6.3.4. Development of the new
standard As far as the development of the new
technical standard is concerned, substantial work has already been done to
develop specifications and a multilateral inter-operability framework, within
the context of CEN BII[103]
and UN/CEFACT (the latter at an international level).The PEPPOL project has
also contributed by developing a number of specifications (based on CEN BII)
and open-source software components for cross-border e-invoicing. Moreover, the
EMSF on e-invoicing is also making progress in developing an architecture that
supports the adoption of e-invoicing in 'communities' (whether in the public or
private sectors) and the underlying business requirements, while allowing for
the electronic exchange of invoice information between communities where
relevant. The EMSF is also expected to provide recommendations about the
elements of this architecture which should be developed into formal European
standards (ENs) in order to allow for optimal adoption and implementation.
Discussions with stakeholders (i.e. in the EMSF and in the CEN Workshop BII)
show that there is a growing consensus and that this is both necessary and
feasible in the short-term. Moreover, the possible Commission proposal would
build on the recommendations of the EMSF and the future mandate would list a
number of minimum requirements which the new standard would need to fulfil. The
proposal would also set dates by which the EN would need to be developed. Thus
a clear framework would be provided, and Member States would be given
sufficient time to introduce the new standard into their e-invoicing systems
once it is published. 7. Overall impacts of the chosen option The expected impacts of the proposed Option
have already been touched upon in several parts of this Impact Assessment. In
order to provide a conclusion, the scenario is once again presented below. 7.1. Primary impacts In the preferred Option (4), a new European
standard for e-invoicing would be introduced and, by a certain date, all
contracting authorities which award public procurement contracts according to
the provisions of the Directives would have to accept e-invoices complying with
this common standard. Several results can then be expected. Firstly, for
enterprises the introduction of a common standard would lower the costs and
complexity generated by the need to support several different e-invoicing systems.
Market access barriers inhibiting the proper functioning of the Internal Market
would effectively be removed as firms active in public procurement would be
able to send electronic invoices in a single standard to any contracting authority
in any Member State. This would be particularly beneficial to SMEs, for whom
the initial investment to support many e-invoicing standards is relatively
speaking more significant. In time, if sufficient numbers of enterprises and
Member States take up the new standard, it may become the preferred one across
the EU, potentially also in the B2B sector. 7.2. Secondary impacts As the availability of a common
interoperable standard may provide a potential solution and guidance for those
Member States which have not yet implemented e-invoicing but are considering
doing so, the e-invoicing uptake is expected to increase across the EU. The gradual uptake of e-invoicing by ever
greater number of market actors, induced by the emergence of the new standard,
might generate some secondary impacts. As explained in previous sections,
Option (4) may ultimately lead to the hoped-for situation, where e-invoicing
interoperability in public procurement would be achieved in parallel with a broader
uptake of e-invoicing. The latter is in turn expected to be a source of
multiple benefits, such as operational savings, faster payments, environmental
gains, improved transparency, the reduction of administrative burden, etc. However,
it should be mentioned that the level of potential benefits depends to a
significant extent on the level of e-invoicing uptake, an increase of which is
highly probable but not certain under the preferred Option. 8. Monitoring and Evaluation The Commission should review the
implementation of any (legislative or non-legislative) proposal on e-invoicing
in public procurement with regards to the achievement of policy objectives
identified in this Impact Assessment. It shall evaluate in particular whether,
and to what extent, the above objectives have contributed to the improvement of
the functioning of the Internal Market. A commitment to evaluating the impacts
of a legislative act, if proposed, should be included in the draft text. The indicators proposed to monitor the
achievement of policy objectives identified in this Impact Assessment are
presented below. Table 12): Monitoring of specific objectives SPECIFIC OBJECTIVES || MONITORING INDICATORS || SOURCES OF DATA AND/OR DATA COLLECTION METHODS || DATA COLLECTED ALREADY? || ACTORS RESPONSIBLE FOR DATA COLLECTION Lower costs for firms || Procurement operating costs borne by contracting authorities and enterprises || A study needs to be launched (a follow up of a survey implemented within “Cost-effectiveness” study in 2011[104]; data from the survey will be used as a benchmark ) || NO but benchmark exists || The Commission Reduce complexity for firms || Perceptions of complexity and willingness to bid cross-border among firms active in public procurement above EU thresholds || A study needs to be launched on perceptions of complexity in cross-border procurement due to invoicing requirements || NO || The Commission Table 13): Monitoring of operational objectives OPERATIONAL OBJECTIVES || MONITORING INDICATORS || SOURCES OF DATA AND/OR DATA COLLECTION METHODS || DATA COLLECTED ALREADY? || ACTORS RESPONSIBLE FOR DATA COLLECTION Enhance interoperability in e-invoicing || The number and value of invoices exchanged cross border in public procurement || A study needs to be launched (e.g. to access data processed in invoicing systems) || NO || The Commission The number and value of cross-border awards in public procurement || OJ/TED database (data collected already, developments to be monitored) || YES || The Commission To avoid putting any additional
administrative burden on contracting authorities, firms or Member States due to
the collection of information used for monitoring, the proposed indicators
mainly rely on the existing data sources (e.g. OJ/TED, Eurostat) or data
already collected by stakeholders (e.g. e-invoicing service providers) in their
business activities. However, there are some data gaps which
will require additional research. This should be done by conducting a targeted
study[105].
The costs of such a study should be borne by the Directorate General for
Internal Market and Services within its operational expenditure (e.g. as
support expenditure for operations of the Internal Market policy area). As a
result, the proposed monitoring arrangements would not generate additional
administrative burden (reporting obligations) for firms, including SMEs. 1. Annexes 1.1. Modifications following the
IAB opinion of 22 March 2013 Further to the
negative opinion of the IAB following the meeting 20 March 2013, a number of
modifications were introduced into the Impact Assessment report. The changes
corresponding to the main recommendations for improvement are presented below: 1.1.1. Strengthen the problem
definition Significant modifications have been made to
the problem definition. The problem tree has been revised in order to focus the
assessment more on the principal problem of market access barriers. As a
result, the problem drivers, problems, and consequences have been reworked.
The reasons why current non-legislative efforts have failed and why existing
technical solutions are insufficient to resolve the problem have been presented
more clearly. The link between the proposed initiative and existing initiative
in related fields has been strengthened. It is important to note that the new
approach has rendered irrelevant a number of the Board’s initial concerns
(impact on employment, impact on microenterprises, proportionality, some
elements of the cost analysis, etc). 1.1.2. Strengthen the subsidiarity
and proportionality analysis The arguments supporting the necessity for
EU action have been reinforced, and the reasons why Member State’s current
efforts have not resolved the problem have been presented more clearly. The
revised approach has made irrelevant the comment concerning the limited impact
of the initiative due to the small size of cross-border public procurement –
the initiative now focuses much more on the legal aspects of eliminating market
access barriers. 1.1.3. Improve analysis of the
impacts An important part of
the comments in this section are no longer relevant due to the revised
structure of the Impact Assessment. However, additional information has been
included concerning the process and timing of the introduction of a new
standard, the data on potential costs for contracting authorities has been
highlighted, and the assessment of the potential impacts has been broken down
into two parts: one concerning Member States which already have a mandatory
e-invoicing system in place and those which do not. A justification for the
inclusion of microenterprises has been added. 1.1.4. Better present stakeholder
views The sections presenting
the views of the different stakeholders on the problem definition and the
different options have been revised and improved. 1.1.5. Procedure and presentation The report has been shortened, and a
significant amount of information has been moved to the annex. The presentation
of the options was revised and strengthened, and an annex with key definitions
has been added. 1.2. Modifications following the
IAB opinion of 8 May 2013 The following changes have been introduced
to the Impact Assessment report to address the comments included in the second
opinion of the IAB: · the need for an EU action has been analysed in the context of the
relatively small scale of cross-border procurement and the stakeholders’ views
expressed in the public consultation; · the proportionality of the proposed EU intervention has been further
elaborated; · the choice between a mandatory or voluntary instrument and the
nature of the proposed menu of Options have been explained in more detail; · the potential risk of higher cost to contacting authorities arising
from the need to accept e-invoices in different formats has been discussed; · the likelihood of a low uptake of e-invoicing due to the voluntary
nature of the proposed measures has been analysed. 1.3. Benefits and costs of
e-invoicing in public procurement Multiple sources have identified a broad
range of drivers for the adoption of e-invoicing. The most frequently mentioned
are time-gains, cuts in operating costs, environmental impacts, as well as
improved transparency, security, and auditability of data. The broader use of
e-invoicing across the EU would therefore have positive economic impacts
resulting mainly from savings to the economy. Finally, an initiative in this
area would also help to reduce the administrative burden on enterprises. In a recent survey, respondents (CFOs and
other financial professionals, 13% of which came from the public sector) were
asked to evaluate current practices surrounding e-invoicing processes. In a
question about the extent to which e-invoicing can be associated with achieving
overall business goals, the following aspects of e-invoicing were mentioned as
the most efficient: improvements of operational efficiency (67%), improvement
of environmental practices (e.g. paperless office, 58%) and improved
auditing/compliance (34%)[106]. In paper-based environment all these potential benefits are lost
and turn into persisting inefficiencies of purchasing processes. Inevitably, the switch to e-invoicing would
also generate some costs. Contrary to the benefits, these would be almost
exclusively economic (monetary) in nature, but some limited social and
environmental costs are nonetheless hypothetically possible. However, a
comparison of the costs with the potential benefits of e-invoicing clearly
shows that the former are significantly exceeded by the latter. All of these aspects are discussed below in
detail. Due to the specificity of the available data on the economic impacts of
e-invoicing, the information on economic benefits is presented for the most
part in terms of net benefits (i.e. including implementation and operational
costs). An effort is then made to present the economic costs of implementation
based on the available data. The data concerning the social, transparency, and
environmental impacts can more easily be separated into gross costs and
benefits, and is therefore presented as such. 1.3.1. Benefits The benefits of e-invoicing can be broken
down into the (net) economic impacts, as well as the environmental, social, and
transparency improvement impacts. The economic benefits would in practice be
the result of operational efficiencies at both micro and macro level. 1.3.1.1. Operational efficiencies –
micro level The use of e-invoicing in public
procurement could lead to improved operational performance through more
efficient sending, reception, and processing of incoming invoices, and could
also affect various directly related processes, such as the preparation of
payments or storage/archiving. When fully automated, all of these require
significantly fewer resources and are therefore less costly than in the case of
traditional paper-based processes. The principal evidence for the observed
operational savings comes from the comparison of costs between automated and
paper based invoicing. For example, the Finnish State Treasury and some Finnish
companies have estimated that an incoming paper invoice incurs costs accounting
to EUR 30-50 to the receiver company. By moving to electronic invoicing, these
costs can be lowered to EUR 10 by semi-automating the invoice process and to 1
EUR by fully automating the process. Some service providers estimate that
processing of paper invoices is around 60% to 80% more expensive than
electronic invoices. According to Politecnico di Milano the switch from paper
based to automated invoicing may generate benefits of up to EUR 65 per invoice
in the case of full integration of the trade process. The European Associations
of Corporate Treasurers has reached similar results, estimating that companies
could save up to 80% of their current costs by processing invoice data
automatically, removing paper and manual efforts. It should be noted that the additional
costs of manual processing of invoices are shared asymmetrically between
senders and recipients of invoices, with the latter being more affected by the
excessive costs. As a consequence, public authorities’ losses due to higher
transaction costs are more significant than those of firms participating in
public procurement. However, the operational inefficiencies
generated by paper-based invoicing do not concern only the cost associated with
this process but also the amount of time which it requires. The most
time-consuming parts of the manual processes are invoice processing and query
handling. As a result, the invoice-to-pay cycle time in paper-based invoicing
may take between 30 and 100 days (in the best-case/worst-case scenario
respectively). According to another source, it is estimated that payment
processing times can be shortened from 4 weeks’ time to around 10 days when
invoices are processed electronically. If the assumptions from the two above
data sources were combined, then the net gain from the switchover to e-invoicing
would be between 20 to 90 days (i.e. paper invoice processing time of 30 to 100
days, less 10 days in case of e-invoicing). The shortened invoice-to-pay cycle
also means that payment delays would be less frequent and contracting
authorities could save on late payment interests. E-invoicing could therefore
contribute to attaining the objectives of the late payments Directive
2011/7/EU. 1.3.1.2. Operational
efficiencies – macro level The overall economic impacts of a broader
introduction of e-invoicing in the public sector would be positive. Examples of
the scale of potential savings come from the countries that have introduced or
consider introducing e-invoicing in their administrations. The U.S. Department
of the Treasury estimates that e-invoicing would save taxpayers as much as 450
million USD annually, if it was adopted government-wide. The Danish government
estimates benefits of the conversion to e-invoicing in the public sector at
about EUR 30 million a year, while the Swedish estimates oscillate around 57
million of yearly net savings. The overall net benefits of the
introduction of e-invoicing in public procurement are estimated at around 1.5
to 2.3 billion EUR annually. This calculation was carried out using two
different approaches: (i) comparison with Member States’ estimates and (ii)
top-down approach. Using the top-down approach, the overall
savings resulting from the adoption of e-invoicing in public procurement can be
estimated on the basis of the figures from the B2B sector mentioned in the 2010
e-invoicing Communication. According to the Communication, the mass adoption
of e-invoicing within the EU would lead to significant economic benefits and it
is estimated that moving from paper to electronic invoices would generate
savings of around EUR 240 billion over a six-year period. As mentioned in
section 2.1.4, public procurement above EU threshold constitutes approximately
3.7% of GDP. Public procurement below the thresholds is estimated at another 2%
of GDP If the 5.7% share of public procurement in GDP were used as a proxy of
the expected benefits, then the global savings generated by the introduction of
e-invoicing could be around 2.3 billion EUR per year . To complete the picture of the top-down
calculation, savings that could be achieved can also be extrapolated from data
provided by the Member States that either have already introduced e-invoicing
or plan to do so. As mentioned above, Sweden estimates that the adoption of
e-invoicing can generate savings of 400 million EUR in 7 years for government
as a whole. Denmark estimates savings of around 30 million EUR per year. If
these national estimates were again extrapolated for the EU on basis of the
GDP, the global savings for the EU would be between 1.57 and 1.86 billion EUR. As indicated above, the two above mentioned
calculation methods give a range of annual savings between 1.5 to 2.3 billion
EUR per year. It is however important to note, that the actual impact of a
Commission initiative in this area might differ from this estimate. It is also
important to note, that the maximum level of potential savings will only be
achieved if invoicing becomes fully electronic, i.e. if the entire post-award
supply chain process is automated. It is important to note that the
distribution of the potential economic benefits would not be evenly spread
among the different users. In particular, the costs and efforts of processing
invoices are much more significant on the receiving side than on the sending
side – whereas the sender only needs to print out the invoice, put in in an
envelope and send it off, the recipient must register it, verify it, transfer
it to the Accounts Payable, which must match the invoice against an existing
purchase order, input the data into the ERP or accounting system, archive it,
etc. By eliminating the need for these processes, the potential savings are by
default greater for the recipient than for the sender. In addition, savings are
obviously greater for large companies and public bodies who deal with a
significant volume of invoices than for small companies and localities which
process only a few invoices a month or even a year. 1.3.1.3. Environmental gains The predominance of paper based invoicing
results in environmental inefficiencies, such as excessive use of paper by
public buyers and firms. The obvious environmental benefits of the broad
introduction of e-invoicing are therefore: a significant reduction in the
number of trees cut down for the production of paper, a reduction in the amount
of solid waste generated, reduced CO2 emissions due to a lower need for road
and air transport, and a reduction of other emissions resulting from the
production of paper. Multiple examples and case studies are
available to confirm this finding. One invoice service provider provides
information about one of its clients, whose transition from paper to electronic
invoices has saved 6 million sheets of paper – the equivalent of 700 trees, 85
barrels of oil, 173 000 kilowatts of energy, and more than 2 500 pounds of air
pollution[107]. According to the Euro Banking Association, 1 000 000 paper
invoices require approximately 400 trees[108].
The Euro Banking Association estimates that a 1% increased adoption of
e-invoicing in Europe (across all industries) could lead to an annual reduction
of tree usage of approximately 800 000 trees and towards reduction of CO2
emissions. According to yet another source, sending out around 150 000
e-invoices annually would save 14.4 tonnes of carbon, 57.6 trees, 180 000
litres of water or 1872 kg of solid waste[109] (to
put this number in a context, the Norwegian Public Roads Administration
receives about 170 000 invoices per year[110]).
Finally, Deutsche Bank estimates that a complete conversion to e-invoicing
across Europe would save 12 million trees a year[111].
The latter figure refers to a complete switchover in all market segments (B2B,
B2C, etc.), but even if the environmental gains were lower in the B2G sector,
they would still be significant and show the scale of inefficiencies of the
current paper-based system. 1.3.1.4. Improved transparency The electronic processing of invoices
positively influences the transparency of the procurement process. If
e-invoicing were widely adopted, governments would realise additional savings
due to lower auditing costs for trading parties and tax authorities.
Transparency motives are frequently referred to when mentioning reasons for the
adoption of mandatory e-invoicing by governments (e.g. Austria, the US). It is
estimated that in Greece both the state and enterprises were losing more than 4
billion EUR annually from illegal invoicing practices - electronic invoicing is
expected to effectively combat such practices. Transparency aspects were also
among the major drivers for the adoption of e-invoicing in Latin America. For
example, in Argentina the introduction of mandatory invoicing is reported to
have contributed to a significant reduction in the incidence of VAT fraud. The
potential for improved transparency of the process also concerns broadly
understood business fraud. Industry publications underline that e-invoicing
reduces operational risk through automated matching and approval processes that
include controls on the invoice data. Such processes dramatically reduce the
risk of fraudulent invoices and duplicate payments. The combination of
e-invoicing adoption with a well thought out matching process and strict
controls on bank account entries are key to eliminating business fraud. In
practical terms, when a tax audit occurs, e-invoices can be more easily made
available to tax authorities than paper invoices, allowing them to check for
compliancy more easily. All of the above observations are equally
valid when invoices are exchanged in public procurement. 1.3.1.5. Social benefits The main social benefits at
enterprise/public authority level will be the potential for employees currently
engaged in low value-added, repetitive tasks to be redirected into more
productive and more rewarding work. In a broader sense (i.e. in terms of the
secondary impacts), society as a whole will benefit from a reduced potential
tax evasion by market operators, through better control of invoices (less
possibility of data tampering) and improved auditability. This will result in
an improved financial situation of the Member States. Additionally, as e-invoicing
is expected to induce the digitalisation of public seller’s back office, it
could also influence the wider digitalisation of government services in general
(e-Government), hence creating conditions for the provision of more efficient
and citizen-friendly public services. 1.3.2. Costs The costs of the broader use of e-invoicing
are primarily economic, but also to some extent social and environmental in
nature. Contrary to the data on net benefits, the data on costs is less easily
available. Nevertheless, a general outline of the possible costs of e-invoicing
is presented below. 1.3.2.1. Economic (implementation)
costs The introduction of e-invoicing in an
enterprise or a public body inevitably has some implementation costs, such as
those linked to the purchase of software or hardware, training costs, costs
resulting from process change, or fees paid to service providers. However, it
is important to keep in mind two considerations. Firstly, the increased
availability of software-as-a-service and cloud-based solutions means that
important new IT-related investment are no longer necessary, greatly limiting
the up-front costs. This is particularly important for SMEs, for whom simple,
web-based solutions should be fully sufficient. Secondly, there is on-going
innovation in the e-invoicing sector, including through the development of new
business models. Some service providers now offer basic e-invoicing services
sufficient to meet the needs of smaller companies, in particular
micro-enterprises, free of charge, while others with a more traditional
business model that charge fees to suppliers tend to provide a free quota of
invoices before fees are applied. Thirdly, some Member States have also
implemented systems or portals through which suppliers can submit electronic
invoices free of charge to contracting authorities, e.g. Denmark, Spain, the
Netherlands. Finally, even with the use of structured e-invoicing, solutions
exist which make it possible for low-volume users (or those with limited IT
capabilities) to participate in e-invoicing – the most obvious one is a
web-based platform where suppliers can log on and type in their invoice data
directly. Although this would limit some of the benefits for the sender, it is
a perfectly viable option if the primary wish is to keep costs to a minimum.
The receiver would still be able to profit from all the benefits of automation,
as the final invoice would nonetheless be sent in a structured data format. It should be noted that limited data is
available concerning the implementation costs of e-invoicing systems. Only a
few Member States have made an attempt to estimate the costs, such as Belgium (cost
of €300,000 for the country’s pilot project), Spain (€100,000 per year), or
Scotland (£500,000 during the first two years of implementation). As previously
mentioned, these estimates are significantly smaller than the expected
benefits. In summary, although some there are
inevitably some start-up costs associated with the use of e-invoicing, methods
exist to keep these to a minimum, while the benefits of e-invoicing remain
important (and, as explained in section 1.6, are greater the more fully the
invoicing process is automated). As a result, even for smaller market operators
the benefits of e-invoicing clearly outweigh the costs (the latter would even
be negligible for companies that only submit a small number of invoices using
free services already available on the market or provided by Member States,
e.g. web forms or free software). 1.3.2.2. Social costs There is a potential for some redundancies
due to the introduction of e-invoicing, as some of the tasks currently carried
out by humans will be fully automated. Such redundancies should be minimal in
the public sector, where internal reassignment is much more common than lay-offs;
they are more probable in enterprises, where such decision depend also on a
number of other factors, e.g. labour market regulation and market conditions.
However, in light of the fact that the current initiative would apply to
invoices sent by enterprises to contracting authorities, and considering that,
as mentioned in previous sections, e-invoicing has a greater impact on the
recipient than on the sender (in terms of the resources necessary), the number
of redundancies in enterprises should not be excessive. 1.3.2.3. Environmental costs There do not appear to be any significant
environmental costs of the initiative. The only potential impacts worth
mentioning are a potential rise in electricity usage due to the need for more
electronic processing power and data storage space (e.g. server parks) and an
increase in the long term of electronic waste products. However, it is
currently impossible to verify the validity of these hypothetic impacts, and it
is possible that the effects resulting from e-invoicing might be on the order
of statistical error considering the general trend of greatly increasing use –
and hence disposal – of energy and electronic equipment. In any case, it
appears safe to assume that any such costs would be greatly exceeded by the environmental
benefits referred to above. 1.4. Why start with e-invoicing? Invoicing is only one of a number of
post-award processes stemming from public procurement. Others include ordering,
payment, archiving, to name the most important ones (see: Figure 1 in section
2.1.1.1). The benefits of automating the post-award public procurement process
are greater, the greater the number of procurement steps which are automated
(allowing the elimination of a greater number of inefficient manual processes).
The question then arises as to whether it is sufficient to attempt to address
only one of these processes (e-invoicing) in a potential initiative at EU
level. There are two principal reasons why this question can be answered in the
affirmative. Firstly – and most importantly – a number of Member States have
also begun efforts to automate their national post-award public procurement
processes with action on e-invoicing. As has been explained in the Impact
Assessment, these actions have led to the creation of market access barriers.
As such, it is these activities which need to be addressed initially. Secondly, most if not all of the remaining
processes have in one way or another already been the object of action at EU
level. Specifically: · the element of e-payments has, to a large degree, been addressed in
the recent SEPA legislation, and electronic payments are already a fairly
standard way of doing business in the EU; · electronic archiving of invoices requires the existence of
electronic invoices in the first place in order to generate many of the
benefits[112]; · e-ordering is closely related – and dependent on – the existence of
electronic catalogues (ordering goods and services electronically requires
these goods and services to be listed online, with their relevant codes, parts
numbers, descriptions, etc.), which are handled by the current reform proposal[113]. Action on e-invoicing is therefore the
logical next step: it is necessary in order to remove existing and avoid future
market access barriers, and it is also the area most likely to generate the
expected spill-over effects into the remaining elements of the post-award
public procurement process. 1.5. Structured e-invoicing - efficiencies of higher levels
of automation One of the most important factors
influencing the level of overall benefits which the introduction of e-invoicing
could generate is the level of automation of the invoicing process itself, as
well as of any related post-award procurement processes. The key to maximising
the returns on an investment in e-invoicing is the complete elimination of the
need for human intervention during the entire invoicing process, from
preparation to processing and archiving. Currently, very often a traditional
paper invoice is printed from its electronic version on the supplier side,
placed in an envelope and sent by post to the recipient. On the receiving side,
the invoice is then registered, verified, approved, and sent for archiving, all
of which is done manually by accounts receivable staff. Frequently, the invoice
data is scanned or manually entered into the buyer’s electronic data storage
system. Each of these tasks costs the two parties a significant amount of time
and money, and opens up the possibility for errors. If all of them are
eliminated, allowing a direct sending of an electronic invoice from the
supplier’s to the buyer’s computer system, huge savings could be realised.
Additionally, if an electronic invoice verification system is used, the
probability of errors would be virtually eliminated. As mentioned in Annex 1.4
above, the extension of digitisation to other parts of the purchase-to-pay
process (e.g. e-ordering, e-payment, e-archiving, etc.) would further increase
the potential benefits. 1.6. Overview of e-invoicing
uptake in EU Member States As part of the broad consultations, the Commission undertook a
survey of the national e-invoicing fora represented in the EMSF concerning the
current usage of e-invoicing in the various Member States. 19 replies were
received from Member States and Croatia - the following Member States did not
provide a response: Bulgaria, Estonia, Finland, Greece, Hungary, Ireland,
Latvia, Malta, and Slovenia. Table 14): Summary of a survey of the national
e-invoicing fora (via EMSF) MS || mandatory / recommended? || for whom? || standard || set-up || fees Austria || Yes, as of 1/01/2014 || initially only for central bodies, but regional and local are invited to participate || four options: - PEPPOL - use of online form - upload of XML-files - web service || invoices to federal government must be submitted through a central platform; businesses need to be registered on it || free if using PEPPOL; standard service provider fees otherwise Belgium || N || n/a || UBL-based standard will be mandatory; e-Prior will be used || three options: - direct connection to web-services - via service providers - web portal || free if using web portal or web services; otherwise standard service provider fees Bulgaria || || || || || Croatia || N || n/a || n/a || n/a || n/a Cyprus || N || n/a || n/a || n/a || n/a Czech Republic || law allows government agencies to make it obligatory at their discretion; no obligation exists || any public body || - national standard exists, but it is not mandated: ISDOC, based on UBL 2.0 with electronic signatures - EDIFACT used in B2B (ODETTE or EANSCOM) - Min of Finance preparing mandatory national standard || primarily based on 'databoxes' || in B2G, free for public bodies if using databoxes; costs borne by the supplier Denmark || mandatory for all suppliers to the public sector to send e-invoices || all public sector (central, regional, local) || - OIOUBL, based on UBL 2.0 is the mandated national standard in p.p. - in private sector, UBL and EDIFACT used || - NemHandel, an open source and open standards - used both in four-corner models and in peer-to-peer exchanges; - longer term, closer integration with PEPPOL is foreseen || - no charge when using NemHandel - when using four-corner models, cost is often borne by the buyer - no roaming fees between service providers when using NemHandel - increasing number of free-of-charge solutions/portals aimed at SMEs Estonia || || || || || Finland || || || || || France || N || n/a || none - guidelines only concern security of data etc. || no data || no clear data, but it seems large organisations shift costs to suppliers Germany || N || || national, open-source standard (ZUGFeRD), based on PDF/A-3 (ISO 15005-3) including structured data according to UN/CEFACT XML Core CII as defined in the CEN MUG CWAs || any transmission means possible || use of standard will be free; transmission costs depend on service provider fees Greece || || || || || Hungary || || || || || Ireland || || || || || Italy || N || n/a || - none for the moment - XML-based national standard is planned, which will be closely linked to the MUG (CEN BII profiles) || - currently wide variety of systems in place - in future, e-invoices to government will be submitted via central hub; connections can be direct or via service provider || no fees will be charged when using the central hub; no regulation of service provider fee structures is foreseen Latvia || || || || || Lithuania || N || n/a || n/a || n/a || n/a Luxembourg || N || n/a || n/a || n/a || n/a Malta || || || || || Netherlands || Mandatory to receive if sent vie Digipoort || central government || - Dutch version of UBL 2.0 - "SETU", Dutch version of SIDES, on basis of hr-XML || buyer's own-platform (VAN) || - free for suppliers if using Digipoort - government agencies charged €0,59 / invoice Poland || N || n/a || n/a || n/a || n/a Portugal || N || n/a || n/a || several private platforms exist (large enterprises) || n/a Romania || N || n/a || n/a || n/a || n/a Slovakia || N || n/a || n/a || n/a || n/a Slovenia || || || || || Spain || N || n/a || - Facturae is mandatory common standard for central government (linked to CEN BII profiles) - several versions of EDIFACT also used in specific sectors || - two main approaches: own-platforms and outsourcing of invoice reception to service providers || - no fees charged to the senders; government bears the costs Sweden || Y || mandatory for central government to receive and send, but not mandatory for suppliers to send; voluntary for local and regional authorities || - Svefaktura (UBL 1.0-based) - EDIFACT also heavily used, especially in localities and regions - SFTI currently recommending standards for e-proc in public sector || - various: - four-corner model for central government platforms - EDIFACT for VANs - supplier portals for SMEs without EDI capability - etc. || - pure four-corner model - every side pays their service provider for services - government departments pay for implementation, a monthly fee, and fees to on-board suppliers - government striving to eliminate roaming fees between service providers United Kingdom || N || n/a || no mandatory standards; pdf quite common || VANS, 3-corner model || vary 1.7. Projects
to facilitate the roll-out of e-invoicing in the EU As mentioned in section 2.1.3 the
Commission supports and implements a number of projects to facilitate the
roll-out of e-invoicing in the EU, including the following: · PEPPOL: the Pan European Public Procurement On-Line project is a
Large Scale Pilot project funded by the EU’s Competitiveness and Innovation
Framework Programme. It was launched in 2008 and concluded in mid-2012.
PEPPOL’s aim was to promote the EU-wide inter-operability of electronic
procurement. The project developed a number of specifications, infrastructure
and technical solutions covering both the pre-award and post-award phases of
public procurement, including e-invoicing. PEPPOL’s e-invoicing component has
been trialled in a dozen Member States. Several platforms enabled for
e-invoices refer to e-Procurement systems support the use of PEPPOL invoice
specification. The PEPPOL project has been completed in 2012 and turned into a
stand-alone initiative, operating without the Commission support as “Open
PEPPOL” AISBL. · e-SENS: a Large-Scale Pilot project (LSP) to be launched in 2013. It
will consolidate and expand on the work done by the other LSPs with the aim of
industrialising the solutions and extending their potential to more domains.
e-SENS will contribute to building a sustainable infrastructure for use by
Member or Associated States when delivering cross-border public services in any
sector. Its objectives include supporting the implementation of the proposed
public procurement directive and the continued standardisation of public
procurement processes. As such, it will develop specifications and services for
the pre-award part of the procurement process and continue efforts to
streamline the processes for ordering and invoicing (post-award procurement).
It will support the introduction of e-invoicing as a standard practice in
public procurement and thus make the public sector a 'lead market' for
e-invoicing and spearhead its wider use in the economy. · e-PRIOR: a service-oriented platform developed by DG Informatics of
the European Commission under the ISA programme. It allows the exchange of
e-procurement documents by using web services, or via a portal, or over the PEPPOL
network through its built-in gateway. It is an open-source software which
implements the emerging European standards of e-procurement. It is fully
functional at the European Commission, and is being adopted by other
institutions, agencies and Member States administrations. 1.8. E-invoicing
data exchange models According to EBA/Innopay, the following
definitions of e-invoicing data exchange models recognised on the market can be
proposed: · Bilateral exchange model: A model for
the exchange of information directly between a buyer and a seller in a
one-to-one relation. These can be seller-driven or buyer-driven. · 3-Corner model (3-party exchange model):
An exchange model where senders and receivers of invoices are connected to a
single hub for the dispatch and receipt of messages. · 4-Corner model (4-party exchange model):
An exchange model where senders and receivers of messages are supported by
their own consolidator service provider (for the sender) and aggregator service
provider (for the receiver), which are interconnected. These three models are presented in Figure 9) below. Figure 9):
E-invoicing data exchange models Source: DG Internal Market and Services
based on EBA/Innopay The specificity of the bilateral model is
that it requires that both parties use the same standard, either by common
agreement or by one of the parties effectively forcing its standard onto the
other. In such cases, if a supplier deals with several contracting authorities
in different Member States, it is obliged to support several different
standards. The 3-corner model theoretically allows
this difficulty to be resolved, in that the service provider is most likely
able to map the invoice from the supplier’s standard to that of the buyer.
However, in a 3-corner model the service provider has by definition been
contracted by one of the parties to either send or receive e-invoices in that
party’s standard. As a result, the risk remains that a supplier will need to
work with several different (Member State) service providers if he wishes to
participate in public procurement across the EU. The most effective way to
eliminate this difficulty is therefore through use of the 4-corner model, where
each party has its own service provider, and these exchange e-invoices between
themselves, after previously agreeing on the standard in which they will
communicate. 1.9. Choice of technical solution to ensure interoperability As mentioned in section 2.2 of the Impact
Assessment, awareness clearly exists that the multiplicity of e-invoicing
standards causes problems with cross-border e-invoicing. While several national
and a significant number of proprietary e-invoicing standards have been
developed and are used throughout the EU, these are almost always designed with
the particular needs of a specific Member State or sector in mind. As such,
they are very rarely “transferrable” to other Member States and sectors. No appropriate European standards have been
adopted to date nor have any ICT technical specifications been recognised by
the Commission within the meaning of Regulation (EU) 1025/2012 on European
standardisation. Despite some initial works which have been carried out at the
global level to try to develop an international standard (UN/CEFACT CII, which
is thus far not operational), no other efforts to harmonise standards have
taken place. For these reasons, at present no single national or international
e-invoicing standard is robust and flexible enough to cover all the needs of
cross-border and cross-sector e-invoicing, and therefore none of the existing
standards can satisfactorily resolve the interoperability challenge. Several attempts to improve
interoperability have already been made. For example, in May 2012 the European
Standardisation Committee (CEN) agreed a so-called CEN Workshop Agreement (CWA)
which proposes a model interoperability agreement for transmitting and processing
e-invoices and other business documents[114].
More recently, the European E-invoicing Service Providers Association (EESPA)
announced that it has agreed an e-invoicing
Model Interoperability Agreement[115]. However, these initiatives all take a bilateral approach to
inter-operability, which, as mentioned above, does not eliminate the problem of
the huge number of potential agreements which would need to be signed in order
to ensure general interoperability. In light of the above situation, the
Commission has also undertaken efforts to address the problem of multilateral
interoperability, mainly via the e-invoicing element of the PEPPOL project. So
far, PEPPOL is the only significant European project that has developed a
multi-lateral interoperability model. However, since this is a project which
has been developed within a consortium which includes several Member States, and
as it offers solutions which are in direct competition with some e-invoicing
services provided by private service providers, the current initiative cannot
directly recommend the PEPPOL solution as the basis of an EU-wide e-invoicing
system, in line with the principle of “technical neutrality”. It is important
to add that the PEPPOL solution does not include all the elements which would
be required to truly consider it as a ‘standard’. In summary, the theoretical possibility of
focusing on a standard/technical solution that is already available on the
market must be disregarded at the early stage of this analysis, simply because
no adequate solution exists that could ensure cross-border interoperability at
the EU level. However, it is important to note that the works carried out by
the Member States in preparing their national standards would not be completely
disregarded should CEN be mandated to develop a new common European standard.
The set-up and internal procedures of CEN mean that in practice, any new
standard uses elements of ones already in existence and brings them together
into a single, coherent whole. Additionally, the technical committees
responsible for developing standards are composed of Member States’
representatives, who work together towards a common objective. Any such mandate
to CEN would therefore not imply creating a standard from the beginning, but
would be solidly grounded in the existing achievements of the Member States. 1.10. CEN
standardisation process[116] A European Standard (EN) is a standard is
produced by all interested parties through a transparent, open and consensus
based process. European Standards are a key component of the Single European
Market. Although rather technical and often unknown to the public and media,
they represent one of the most important issues for businesses. Often perceived
as boring and not particularly relevant to some organisations, they are
actually crucial in facilitating trade and hence have high visibility among
manufacturers inside and outside Europe. A standard represents a model
specification, a technical solution against which a market can trade. It
codifies best practice and is usually state of the art. 1.10.1. Developing a European Standard The development of an EN is governed by the
principles of consensus, openness, transparency, national commitment and
technical coherence (more information is given in the BOSS - Business Operation
Support System - Production processes) and follows several steps: ·
Proposal to develop an EN: Any interested party can introduce a
proposal for new work in CEN. Most standardisation work is proposed through the
National Standards Bodies. ·
Acceptance of the proposal: Once a project to develop an EN is accepted
by the relevant CEN Technical Body, or by the CEN Technical Board (in case the
proposal is related to a new field of standardisation activity), the member
countries shall put all national activity within the scope of the project on
hold. This means that they do not initiate new projects, nor revise existing
standards at national level. This obligation is called 'standstill' and allows
efforts to be focused on the development of the EN. ·
Drafting The EN is developed by experts within a
Technical Body. ·
CEN Enquiry – Public comment at national level Once the draft of an EN is prepared, it is
released for public comment, a process known in CEN as the 'CEN Enquiry'.
During this public commenting stage, everyone who has an interest (e.g.
manufacturers, public authorities, consumers, etc.) may comment on the draft.
These views are collated by the CEN national members and analysed by the CEN
Technical Body. ·
Adoption by weighted vote Taking into account the comments resulting
from the CEN Enquiry, a final version is drafted, which is then submitted to
the CEN national members for a weighted formal vote. ·
Publication of the EN After its publication, a European Standard
must be given the status of national standard in all CEN member countries,
which also have the obligation to withdraw any national standards that would
conflict with it. This guarantees that a manufacturer has easier access to the
market of all these European countries when applying European Standards and
applies whether the manufacturer is based in the CEN territory or not. ·
Review of the EN To ensure that a European Standard is still
current, it is reviewed at least within five years from its publication. This review results in the confirmation,
modification, revision or withdrawal of the EN. 1.11. Summary of stakeholder views 1.11.1. Conclusions from bilateral meetings
with stakeholders Bilateral meetings with stakeholders played
an important part of the public consultations, and allowed the Commission to
gather important information on the position of enterprises and service
providers with respect to e-invoicing in public procurement. This information
is presented below. 1.11.1.1. Enterprises Generally speaking, enterprises are some of
the biggest supporters of the broader use of e-invoicing across the EU. It is
important to remember that by many accounts, enterprises are currently
significantly more advanced than the public sector in using electronic invoices
in the B2B sector. This is confirmed in the public consultation, where just
over one-half of respondents from enterprises indicate that they already use
e-invoicing (the proportion is visibly greater for large enterprises than for
SMEs and microenterprises, however). These enterprises have already reaped many
of the benefits which e-invoicing promises to deliver: lower costs, faster
payment processing times, more effective use of capital, and better business
relations, to name some of the more obvious ones. Understandably then, the
support of business for e-invoicing has been registered in a number of
different studies and surveys. This broad support was confirmed yet again
during the Commission’s meetings with business representatives throughout the
Impact Assessment process. Favourable opinions expressed by business
organisations are confirmed in their position papers. For example, Business
Europe is very supportive of the possibility of mandatory e-invoicing in public
procurement, mentioning the potential savings and business opportunities which
could be generated. The need to ensure as much flexibility as possible for the
users was stressed, however, in order to avoid any unnecessary costs. UEAPME,
the association of small and medium businesses, has also clearly voiced its
support, but made it conditional on the agreement on a common standard
throughout the EU, in order to ensure that suppliers were not obliged to
support several different national or proprietary standards. Asked about why some enterprises do not yet
use e-invoicing, the concerns voiced by Business Europe and UEAPME confirmed
the two main reasons identified in the public consultation: the excessive
number of different standards and unclear laws/regulations. As a result, it can
be assumed that availability of a widely recognised technical solution would be
broadly supported by enterprises. Additionally, it would be particularly
beneficial to SMEs, for whom the initial investment to start e-invoicing would,
relatively speaking, be more significant. 1.11.1.2. Service
providers The community of service providers has
generally appeared to be the most cautious among all the stakeholders with
respect to a possible EU initiative on e-invoicing in public procurement. In
the Commission’s meetings with the European e-Invoicing Service Providers
Association (EESPA) and with individual market operators, as well as from
opinions voiced at various conference and fora, a number of concerns have been
raised. These concerns focus primarily on the role which service providers will
play in e-invoicing in the future, as well as on the additional costs that the
addition of a new common standard, which would be obligatory for a significant
part of the invoice traffic, would generate. Yet despite these concerns, there
is in principle support for an increased use of e-invoicing in Europe, since
this would create a potentially significant business opportunity for the service
providers. This appears to be confirmed by the results of the pubic
consultation, where out of the 92 service providers, all indicate support for
EU action to increase uptake and 92% agree that the EU should attempt to
enhance interoperability. 1.11.2. Replies from IPM survey The public consultation was launched on 22 October 2012 and remained
open for 12 weeks, until 14 January 2013. The survey was open to all
stakeholders and interested parties: policymakers, contracting authorities,
enterprises, IT service providers, associations (business and governmental),
tax authorities, citizens, etc. In addition, participation was not limited to
the European Union – interested parties from all over the world were welcome to
provide their views. In all, 707 replies were received by the 14 January 2013 deadline.
There was a very good representation of the different groups of stakeholders.
The geographic spread was also quite good, with contributions received from all
EU Member States as well as from a significant number of third countries.
Nevertheless, some Member States were underrepresented in relative terms to
their size (e.g. United Kingdom, Italy, Romania) or to their level of
advancement in terms of e-invoicing use (e.g. Finland, Austria, Norway).
Despite this, the number of replies to the public consultation is sufficiently
large to allow a thorough analysis of the current use of e-invoicing in Europe
and the public’s views on a potential EU initiative in e-invoicing in public
procurement. 1.11.2.1. General
overview Before presenting the opinions for each of category of stakeholders,
it is important to note that support for EU action in e-invoicing in public
procurement was very high in each of the different categories and in all Member
States. No single category of stakeholder or nationality was outright opposed
to EU action in this field. Out of the 707 replies received in total, 88% of
the respondents said they would be in favour of the EU undertaking steps to
increase the use of e-invoicing in public procurement. The proportion dropped
only slightly (to 85%) when asked about support for a possible EU initiative to
enhance interoperability in e-invoicing. Figure 10): Support for EU action to
increase uptake and enhance interoperability in e-invoicing in public
procurement - general Source:
DG Internal Market and Services In terms of the instruments to be used in order to increase the
uptake of e-invoicing, a slim majority of respondents to the survey (52%) chose
mandatory instruments, while 41% preferred voluntary and 7% voted for both. The
attitude to the type of instruments to be used in order to enhance
interoperability, on the other hand, was almost exactly the reverse: here, the
majority (52%) prefer voluntary instruments over mandatory ones (42%); 6% of
the respondents wish to see both being used. Figure 11): Preferences with regards to
the type of EU action - general Source: DG Internal Market and Services Among those stakeholders approving the
introduction of mandatory e-invoicing in public procurement, there appears to
be a very strong preference to see this happen rapidly: more than half of this
group of respondents (56%) would like to see e-invoicing become mandatory
before 2016, while just over a third more (36%) prefer a timeframe of 2016 or
2017. Less than 1 in 10 stakeholders (8%) would rather have a longer timeline,
in which mandatory e-invoicing would not be introduced until 2018 or later. Figure 12): Preferred timeline of
introduction - general Source: DG Internal Market and Services Out of the 364 respondents supporting mandatory instruments to
increase the uptake of e-invoicing in public procurement, virtually all of them
(99%) wish for it to apply to the entire public sector; only 4 participants
indicated that they would wish to restrict use to the central government only.
Furthermore, 84% of stakeholders voiced a preference to include all types of
invoices in the obligation, while 16% wish to see the initiative limited to
certain types of invoices only. The most commonly chosen restriction was that
based on the value of the invoice (70% of respondents), with the other three
types of limitations receiving significantly lower and more or less equal
support (invoices only in certain sectors and invoices covered by the public procurement
directives – 39% each; other criteria – 34%). The other possible limitations
mentioned include among others: contracts with secret clauses or pertaining to
national security matters; contracts where the payments are made by way of
fixed advances; suppliers which do not have the required IT capabilities; in
situations where VAT rules are not clear; small suppliers with a very limited
number of invoices, etc. The main benefits of mandatory e-invoicing in public procurement
expected by the stakeholders are primarily economic: at least 4 in 5
respondents mentioned cost reduction and faster processing times (89% and 80%
respectively), while three-quarters (74%) indicated process simplification
(74%). Other potential benefits expected by more than half of the stakeholders
include: positive environmental effects (66%), better management of data (63%),
and a contribution to broader digitalisation of the economy (59%). Figure 13): Expected benefits of
e-invoicing in public procurement - general Source: DG Internal Market and Services 1.11.2.2. Member
States In the general public consultation, ‘Member States’ are understood
as policymakers not directly involved in public procurement, i.e. who do not
fall into the category of contracting authorities. The respondents represented
all levels of government, the central, regional, and local. Of the 80
respondents, 86% voiced support for the EU undertaking action to promote the
use of e-invoicing in public procurement, and 88% want the EU to act to
undertake action to enhance interoperability. Figure 14): Support for EU action to
increase uptake and enhance interoperability in e-invoicing in public
procurement – Member States Source: DG Internal Market and Services In terms of the instruments to be used for
increasing uptake, of the 69 respondents supporting EU action, a slight
majority (54%) prefer mandatory instruments, 41% voluntary instruments, while
6% would like to see both used. The opinion on instruments to be used for
enhancing interoperability is evenly split, with 47% supporting mandatory
instruments, 49% preferring voluntary instruments, and 4% choosing both. Figure 15): Preferences with regards to
the type of EU action – Member States Source: DG Internal Market and Services Of those looking for mandatory instruments,
just over half (51%) would like to see e-invoicing become mandatory before
2016; the vast majority of the remaining half of respondents (39% of all
replies received) would prefer it within a 2016-17 timeframe, with only 10%
preferring e-invoicing to become mandatory between 2018 and 2020. No
respondents wished for a longer timetable. Figure 16): Preferred timeline of
introduction – Member States Source: DG Internal Market and Services Furthermore, 95% would like the mandatory
e-invoicing to apply to all public bodies, while only 5% would like it to be
restricted to the central government only. Of the former, 72% of the former and
50% of the latter would wish all invoices to be covered, while the remainder
would prefer to restrict the use of e-invoicing only to certain types of
invoices. From this group, more than 9 out of 10 (91%) respondents would like
to include only invoices above a certain monetary value; approximately half
(55%) would prefer to use it only in certain sectors or only apply it to
invoices covered by the public procurement directives; while a quarter (27%)
indicated other criteria (e.g. exemptions for contracts with secret clauses or
pertaining to national security matters, contracts where the payments are made
by way of fixed advances). The main benefits expected by Member States are cost
reduction (96%), faster processing times (78%), and process simplification
(78%). Figure 17): Expected benefits of
e-invoicing in public procurement – Member States Source: DG Internal Market and Services 1.11.2.3. Contracting
Authorities 171 replies were received from contracting authorities. Just over a
quarter (27%) of the respondents currently use e-invoicing. Of these,
practically all (96%) agreed that e-invoicing had positively impacted their
activities, with the remainder either neural or having no opinion. The main
reasons for not using e-invoicing were: unclear laws/regulations (28%), too
many different standards (28%), and other reasons (21%), which seemed to focus primarily
on lack of an existing national framework, on a failure at an earlier attempt
to introduce it, or on lack of readiness of business partners or resistance to
change. More than a quarter of respondents (28%) admit that they have simply
never considered it before. Figure 18): Reasons for not using
e-invoicing – contracting authorities Source: DG Internal Market and Services 84% of contracting authorities support the EU undertaking action to
promote the use of e-invoicing in public procurement, and 82% want the EU to
act to undertake action to enhance interoperability. Figure 19): Support for EU action to
increase uptake and enhance interoperability in e-invoicing in public
procurement – contracting authorities Source: DG Internal Market and Services Of the 144 respondents approving of EU
action to increase use of e-invoicing, a slight plurality would prefer
voluntary to mandatory instruments (49% vs. 45%) with the rest (6%) opting for
both. In order to enhance interoperability, the majority of respondents (60%)
would prefer voluntary instruments, with 35% opting for mandatory and 5% for
both. Figure 20): Preferences with regards to
the type of EU action – contracting authorities Source: DG Internal Market and Services In terms of the timeframe, 48% of those
preferring mandatory instruments would like to see mandatory e-invoicing before
2016, and another 45% in 2016 or 2017. Only 7% would rather wait until 2018 or
after. Figure 21): Preferred timeline of
introduction – contracting authorities Source: DG Internal Market and Services All of the respondents supporting mandatory
instruments to increase uptake would wish to see it apply to the entire
government sector, and less than 1 in 5 (18%) respondents would prefer to limit
the application to only certain types of invoices. The only limitation which
received the support of respondents (54%) was by monetary value of invoice;
less than a third (31%) would prefer to see e-invoicing only in certain
sectors, and less than 1 in 6 (15%) would like to restrict its use to invoices
covered by the public procurement directives. Just under half (46%) mentioned
other selective criteria, such as: limitation of e-invoicing to high-volume
purchases and to simple purchases (goods, simple services, as opposed to
works). The main benefits expected by the contracting authorities are cost
reduction (89%), faster processing times (81%), and a reduced environmental
impact (75%). Figure 22): Expected benefits of
e-invoicing in public procurement – contracting authorities Source: DG Internal Market and Services 1.11.2.4. Firms
(including SMEs) Out the 140 replies received from enterprises, 46 were from large
companies, 51 were from SMEs, and 43 from microenterprises. Almost exactly half
of all enterprises (51%) already use e-invoicing; however, the proportion is
greater for large enterprises (63%) than for SMEs (47%) and for
microenterprises (42%). On average, more than 4 out of 5 enterprises (86%)
agreed or strongly agreed that e-invoicing has had a positive impact on their
business operations; only 3% were of the opposite opinion. However, here too,
the opinions varied among the different types of enterprises: whereas 100% of
large enterprises agreed with the statement, the proportion dropped to 88% for
SMEs and only 61% for microenterprises. The respondents who did not feel that
e-invoicing had had a positive impact mentioned the poor presentation of the
invoice and complexity of dealing with service providers as the reasons. The main reasons given for not using e-invoicing for enterprises as
a group were: never considered using e-invoicing (30%), too many different
standards (28%), and unclear laws/regulations (20%). For large enterprises, the
same reasons were given, but their order was reversed: over a third of
respondents (35%) mentioned unclear laws/regulations and the multiplicity of
standards (35% for each), while a slightly lower number (29%) have simply never
considered it. Perhaps unsurprisingly for large enterprises, the issues of cost
and insufficient number of invoices were not mentioned at all. In terms of the
SMEs which do not use e-invoicing, 2 out of every 5 (41%) have never considered
it, while a quarter (26%) is concerned by the multiplicity of standards. The
next two reasons mentioned are the lack of clarity in laws/regulations and
other reasons (both 19%), such as lack of sufficient knowledge, fear of
dependence on a service provider, or the lack of agreement from business
partners. The issue of cost and volume of invoices appears, at 7% and 11% of
respondents indicating these as concerns. Finally, for microenterprises, the
situation looks quite different: 40% of the respondents indicate the
insufficient number of invoices as the main concern, a quarter (24%) – the
multiplicity of standards, while 20% fear excessive. 20% of microenterprises
have simply never considered e-invoicing. Figure 23): Reasons for not using
e-invoicing - enterprises Source: DG Internal Market and Services Taking the three groups together, 84% of respondents were in favour
of the EU undertaking action to increase the uptake of e-invoicing, and 78%
wished for action to enhance interoperability. Looked at separately, the
greatest support for the promotion of uptake was among large enterprises (96%),
while support among SMEs and microenterprises was somewhat lower and almost
identical (78% and 79% respectively). Figure 24): Support for EU action to
increase uptake and enhance interoperability in e-invoicing in public
procurement - enterprises Source: DG Internal Market and Services With regards to the question of enhancing
interoperability, support was similar among large enterprises (85%) and SMEs
(80%), but was significantly lower among microenterprises (67%). Out of all
enterprises supporting EU action to increase uptake, roughly 2 out of every 5
(38%) supported mandatory instruments, with just over one-half (55%) preferring
a voluntary approach. The proportion was very similar for large enterprises and
microenterprises, but among SMEs there was greater support for voluntary
instruments (65% vs. 33% for mandatory). As far as enhancing interoperability
is concerned, once again a majority preferred the use of voluntary to
mandatory instruments (55% vs. 35%), while 10% of respondents were in favour of
both. Once again, the proportion of large enterprises and microenterprises
preferring mandatory instruments is very similar (41% for both), although there
is greater support among microenterprises for voluntary measures (56% to 46%
for large enterprises). The SMEs stand out in this aspect as well – the
proportion of those preferring voluntary instruments over mandatory ones is
significantly greater than among the other groups of enterprises (65% for
voluntary vs. 33% for mandatory). Figure 25): Preferences with regards to
the type of EU action - enterprises Source: DG Internal Market and Services In terms of the timeline for the
introduction of mandatory e-invoicing, all enterprises seem very eager: almost
3 out of 5 (58%) would prefer the deadline to be prior to 2016, and a further
40% prefer 2016-2017. This means that there are practically no enterprises
which would wish to see a longer transition period to mandatory e-invoicing
(i.e. introduction in 2018 or later). Figure 26): Preferred timeline of
introduction - enterprises Source: DG Internal Market and Services Interestingly, the proportion of supporters
of early introduction rises as the company size decreases: while only 50% of
large enterprises would support the introduction of mandatory e-invoicing
before 2016, the level of support rises to 54% in SMEs and to as much as 71% in
microenterprises. All of the firms in favour of mandatory instruments to increase the
uptake of e-invoicing support its use in all government institutions, and 86.8%
wish to include all types of invoices (the proportions are very similar between
the three types of enterprises, but is inversely proportional to the size of
the enterprise). Those few enterprises which do wish to limit e-invoicing
generally indicate most (if not all) of the types of limitations. Due to the
low numbers involved, however, any trends are very difficult to detect. The main benefits expected by enterprises, irrespective of whether
looked at as a group or by size sector, are invariably: cost reduction (86%),
faster processing times, and process simplification (both 76%). Figure 27): Expected benefits of
e-invoicing in public procurement - enterprises Source: DG Internal Market and Services The only discernible trend between large
enterprises, SMEs, and microenterprises is that the economic benefits (cost,
processing time) weigh heavier the larger the enterprise; for microenterprises,
issues such as the environment and digitalisation appear to play a relatively
larger role. 1.11.2.5. Service
providers 92 IT service providers responded to the public survey, out of which
86% currently provide e-invoicing services. Of these, 79% have signed one or
more bilateral interoperability agreements, and almost exactly half (51%) have
multilateral agreements. Among those service providers not currently providing
e-invoicing services, by far the most commonly cited reason was that other
services were a priority (38%). Figure 28): Reasons for not providing
e-invoicing services Source: DG Internal Market and Services Out of the four groups of stakeholders
discussed here, the service providers are by far the most supportive of EU
action in the area of e-invoicing of public procurement. Of the 92 respondents,
all support EU action to increase uptake and 92% agree that the EU should
attempt to enhance interoperability. Figure 29): Support for EU action to
increase uptake and enhance interoperability in e-invoicing in public
procurement – service providers Source: DG Internal Market and Services Two-thirds (65%) of those service providers
supporting EU action in order to increase the uptake of e-invoicing are for the
use of mandatory instruments, and another 9% would like to see both mandatory
and voluntary instruments. The opinions are much more balanced when it comes to
steps to enhance interoperability: 46% support mandatory instruments, 49%
prefer voluntary instruments, and 5% would opt for both. Figure 30): Preferences with regards to
the type of EU action – service providers Source: DG Internal Market and Services Service providers wish to see the broadest
scope possible for e-invoicing: 100% of those supporting mandatory instrument
would like all governmental institutions included and 91% all types of invoices
covered. Of the respondents wishing to limit the use of e-invoicing, 83% wanted
to include only invoices above a certain monetary value, exactly half would
like it to apply only to invoices covered by the public procurement directives,
and 1 in 6 (17%) would like to restrict it to only certain sectors. In addition,
50% named other criteria, e.g. legal complexity of the invoice. They are also
eager to see it soon: just over two-thirds (68%) would like it introduced
before 2016 and a further 20% in 2017 or 2018. There is no interest in delaying
introduction pasts 2020. Figure 31): Preferred timeline of
introduction – service providers Source: DG Internal Market and Services Similarly to the other groups, the main benefits expected by the
service providers are cost reduction (95%), faster processing times (87%), and
process simplification (83%). Figure 32): Expected benefits of
e-invoicing in public procurement – service providers Source: DG Internal Market and Services 2. Glossary ACPC: the
Advisory Committee for Public Contracts CEN: European
Standardisation Committee CWA: CEN
Workshop Agreement Directives, the: Directive 2004/17/EC of the European Parliament and of the Council
of 31 March 2004 coordinating the procurement procedures of entities operating
in the water, energy, transport and postal services sectors; Directive
2004/18/EC of the European Parliament and of the Council of 31 March 2004 on
the coordination of procedures for the award of public works contracts, public
supply contracts and public service contracts; and Directive 2009/81/EC of the
European Parliament and of the Council of 13 July 2009 on the coordination of
procedures for the award of certain works contracts, supply contracts and
service contracts by contracting authorities or entities in the fields of
defence and security, and amending Directives 2004/17/EC and 2004/18/EC. Contracting authorities: in this Impact Assessment, the term is used to refer to contracting
authorities or entities, within the meaning of Article 1(9) of Directive
2004/18/EC, Article 2 of Directive 2004/17/EC and/or Article 1(17) of Directive
2009/81/EC. EESPA: European
E-invoicing Service Providers Association (http://www.eespa.eu/) EMSF: European
Multi Stakeholder Forum on Electronic Invoicing (http://ec.europa.eu/enterprise/sectors/ict/e-invoicing/benefits/invoicing_forum_en.htm) EN: European
standard (“norme européenne”) is a standard which has been adopted by
one of the three recognised European Standardisation Organisations: CEN,
CENELEC or ETSI e-procurement (electronic procurement): e-procurement refers to the use of electronic communications by
public sector organisations when buying supplies and services or tendering
public works IAB: the
Impact Assessment Board IASG: the Steering
Group for this Impact Assessment IPM: Interactive
Policy Making (http://ec.europa.eu/yourvoice/ipm/index_en.htm) OJ/TED: Tenders
Electronic Daily (TED) – the Supplement to the Official Journal of the European
Union where notices are published for public procurement contracts covered by
the Directives (http://ted.europa.eu/) UEAPME:
European Association of Craft, Small and Medium-sized Enterprises (http://www.ueapme.com/ ) 3. References ·
"A Digital Agenda for Europe",
European Commission Communication, COM(2010) 245 (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0245:FIN:EN:HTML)
·
“Action plan for the implementation of the
legal framework for electronic public procurement”, Communication from the
Commission, Brussels, 13.12.2004, (http://ec.europa.eu/internal_market/publicprocurement/docs/eprocurement/actionplan/actionplan_en.pdf) ·
„AGFA - vurderinger og anbefalinger om
elektronisk faktura i staten”, Rapport fra arbeidsgruppe for elektronisk
faktura (2008) (http://www.regjeringen.no/upload/FAD/Vedlegg/IKT-politikk/AGFArapportWEB.pdf
) ·
“A strategy for e-procurement”, Communication
from the Commission, COM(2012) 179 final (http://ec.europa.eu/internal_market/publicprocurement/docs/eprocurement/strategy/COM_2012_en.pdf) ·
“Annual Growth Survey 2013”,
Communication from the Commission, COM(2012) 750 final (http://ec.europa.eu/europe2020/pdf/ags2013_en.pdf)
·
“Commission Work Programme 2013”,
Communication from the Commission, COM(2012) 629 final (http://ec.europa.eu/atwork/pdf/cwp2013_annex_en.pdf)
·
Commission Regulation (EU) No 1251/2011 of 30
November 2011 amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the
European Parliament and of the Council in respect of their application
thresholds for the procedures for the awards of contract (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:319:0043:0044:EN:PDF)
·
Council Directive 2010/45/EU of 13 July 2010
amending Directive 2006/112/EC on the common system of value added tax as
regards the rules on invoicing (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:189:0001:0008:EN:PDF
) ·
„Cross-border public procurement above EU
thresholds”, Rambøll Management, May 2011, (http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cross-border-procurement_en.pdf) ·
“E-Government as a spearhead”, European
Parliament resolution of 20 April 2012 on a competitive digital single market –
(2011/2178(INI)), T7-0140/2012 (http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2012-140
) ·
“E-invoicing 2010, European market guide”,
Euro Banking Association (EBA) and Innopay (https://www.ebaportal.eu/_Download/commentary/2010/E-Invoicing_2010-European_Market_Guide.pdf)
·
“E-Invoicing Benefits”, Efficient
Government Fund - expression of interest (http://www.scotland.gov.uk/Resource/Doc/55971/0015406.pdf
) ·
”E-invoicing - Final step of an efficient
invoicing process”, Deutsche Bank Research, May 3, 2010 (http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000257196/E-invoicing%3A+Final+step+of+an+efficient+invoicing+process.pdf
) ·
"E-invoicing/E-billing, International
Market Overview & Forecast", Bruno Koch, Billentis, February 2012 (http://www.billentis.com/einvoicing_ebilling_market_overview_2012.pdf
) ·
“Electronic invoice processes in Europe and
enablement of SMEs to use them efficiently”, CEN Workshop Agreement (CWA)
16461, May 2012, (ftp://ftp.cen.eu/CEN/Sectors/List/ICT/CWAs/CWA16461.pdf)
·
“Electronic Invoicing Initiatives in Finland and
in the European Union – Taking steps towards the Real Time Economy",
Helsinki School of Economics, B-95 , (http://epub.lib.aalto.fi/pdf/hseother/b95.pdf
) ·
"Electronic invoicing: models, integration
level and benefits" Alessandro Perego, Politecnico di Milano School of
Management, 2010 (http://ec.europa.eu/enterprise/sectors/ict/files/23_perego_en.pdf
) ·
EUROPEAN COUNCIL 28/29 JUNE 2012 CONCLUSIONS,
Brussels, 29 June 2012 (http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131388.pdf) ·
“European E-Invoicing Guide for SMEs”, The
European e-Business Lab, November 2009 (http://celeris-group.eu/public/wp-content/uploads/2012/01/ebl_guide_final_print-copy.pdf
) ·
“European Interoperability Framework (EIF)
for European public services”, Annex 2 to the Communication from the
Commission “Towards interoperability for European public services”,
Brussels, 16.12.2010 COM(2010) 744 final (http://ec.europa.eu/isa/documents/isa_annex_ii_eif_en.pdf
) ·
“Evaluation Report Impact and Effectiveness
of EU Public Procurement Legislation”, Commission Staff Working Paper, SEC(2011)
853 final (http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/er853_1_en.pdf
) ·
“Financing Innovations”, Sarah Jones,
Bottomline Technologies, April 2010 ·
"Global development of Electronic
Invoicing" Karri Lehtonen, Basware, 2012 (http://fr.slideshare.net/ssonetwork/global-development-of-electronic-invoicing
) ·
“Good practices in the adoption and promotion
of e-invoicing in Europe: Results of the EMSF good practices consultation”
- ACCA Discussion Paper prepared for Activity Group 2 of the European
Multi-stakeholder Forum on e-invoicing, London, August 2012 (http://ec.europa.eu/enterprise/sectors/ict/files/invoicing/activity_2_consultation_report_en.pdf
) ·
Proposal for a Directive of the European
Parliament and of the Council on public procurement, COM/2011/896 final, and
Proposal for a Directive of the European Parliament and of the Council on
procurement by entities operating in the water, energy, transport and postal
services sectors, COM(2011) 895 final, a key action of the Single Market Act I
(http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals_en.htm) ·
OECD Procurement Toolbox :
http://www.oecd.org/governance/procurement/toolbox/ ·
„Public Procurement Indicators 2010”,
European Commission, Brussels, 4 November 2011 (http://ec.europa.eu/internal_market/publicprocurement/docs/indicators2010_en.pdf) ·
„Public Procurement in Europe : Cost and
effectiveness”, London Economics, PricewaterhouseCoopers, London Economics,
and Ecorys, 2011 (http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cost-effectiveness_en.pdf) ·
"Reaping the benefits of e-invoicing for
Europe", European Commission Communication, COM(2010)712 (http://ec.europa.eu/internal_market/payments/docs/einvoicing/com712_en.pdf)
·
“Single Market Act - Twelve levers to boost
growth and strengthen confidence, Working together to create new growth",
Communication from the Commission, COM(2011) 206 final (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0206:FIN:EN:PDF) ·
“Single Market Act II - Together for new
growth”, Communication from the Commission, COM(2012) 573 final, (http://ec.europa.eu/internal_market/smact/docs/single-market-act2_en.pdf) ·
“Solutions for Remaining Cross‐Border
Issues”, Interim Report Activity 3 v04, European
Multi-stakeholder Forum on Electronic Invoicing, 26‐09‐2012,
(http://ec.europa.eu/enterprise/sectors/ict/files/invoicing/activity_3_interim_report_en.pdf) ·
“Supplier perspectives on the challenges of
eInvoicing with the public sector” by Roman Weber, PEPPOL (http://project.peppol.eu/news/supplier-perspective-on-the-challenges-of-einvoicing-with-the-public-sector) [1] "A Digital Agenda for Europe", European
Commission Communication, COM(2010) 245. [2] “Annual Growth Survey 2013”, Communication
from the Commission, COM(2012) 750 final. [3] "Reaping the benefits of e-invoicing for
Europe", European Commission Communication, COM(2010) 712. [4] Detailed explanations provided in Section 2.1.4.2. [5] „Public Procurement
Indicators 2010”, European Commission, Brussels, 4
November 2011. [6] “Single Market Act II - Together for new growth”,
Communication from the Commission, COM(2012) 573 final. [7] Proposal for a Directive of the European Parliament
and of the Council on public procurement, COM/2011/896 final, and Proposal for
a Directive of the European Parliament and of the Council on procurement by
entities operating in the water, energy, transport and postal services sectors,
COM(2011) 895 final I. [8] “Single Market Act - Twelve levers to boost growth
and strengthen confidence, Working together to create new growth",
Communication from the Commission, COM(2011) 206 final of April 2011 [9] This initiative would only concern public
procurement covered by Directives 2004/17/EC, 2004/18/EC, and 2009/81/EC. [10] “Commission Work Programme 2013”, Communication
from the Commission, COM(2012) 629 final. [11] http://ec.europa.eu/internal_market/payments/einvoicing/index_en.htm
[12] The interim reports of Activity Groups 1 to 4: (http://ec.europa.eu/enterprise/sectors/ict/e-invoicing/benefits/invoicing_forum_en.htm). [13] The following groups of stakeholders were represented:
policy makers, contracting authorities, firms (large companies / SMEs), IT
service providers, business/industry associations (industry consultants), other
associations (e.g. associations of regional or local government), private
individuals / citizens. [14] “Evaluation Report - Impact and Effectiveness of EU
Public Procurement Legislation”, Commission Staff Working Paper, SEC(2011)
853 final. [15] In this Impact Assessment, the term “contracting
authorities” will be used to refer to contracting authorities or entities, within
the meaning of Article 1(9) of Directive 2004/18/EC, Article 2 of Directive
2004/17/EC and/or Article 1(17) of Directive 2009/81/EC. [16] Commission Regulation (EU) No 1251/2011 of 30 November
2011. [17] Articles 13 to 18 of Directive 2004/18/EC. [18] These provisions foresee a phased introduction of the
mandatory use of electronic means of communication in public procurement,
covering the electronic notification of procurement notices (e-notification),
the electronic access to tender documents (e-access) and the electronic
submission of bids (e-submission). [19] The term “procurement cycle” is used by OECD in its Procurement
Toolbox: “The procurement cycle describes the entirety of the process
through which public organisations identify, prepare and execute the
acquisition of goods, services and works. The procurement cycle comprises of
three main phases: pre-tendering (including needs assessment, planning and
budgeting, definition of requirements and choice of procedures); tendering
(including the invitation to tender, evaluation and award); and post-award or
post-tendering (including contract management, order and payment)”; (http://www.oecd.org/governance/procurement/toolbox/keyterminology.htm
). [20] http://www.peppol.eu/peppol_components [21] “Action plan for the implementation of the legal
framework for electronic public procurement”, Communication from the
Commission, Brussels, 13.12.2004. [22] “A strategy for e-procurement”, Communication from
the Commission, COM(2012) 179 final. [23] This is one of the reasons why
the proposed initiative will address e-invoicing and not any of the other of the post-award processes. It should be
noted, however, that some of these processes have to some extent already been
addressed by other Commission initiatives. More detailed information is
provided in Annex 0. [24] Council Directive 2010/45/EU of 13 July 2010 amending
Directive 2006/112/EC on the common system of value added tax as regards the
rules on invoicing. [25] (http://ec.europa.eu/internal_market/payments/einvoicing/index_en.htm) [26] Unstructured e-invoices are essentially an electronic
image of the paper invoice, which implies that their further processing in the
recipient's IT systems can only take place after they are encoded manually or
using an alternative process, which is generally costly and not fully automated. [27] The invoice would need to adhere to strict semantic
and syntactic standards which allows the fully automatic processing of the
invoice data by the sender’s and recipient’s computer systems. [28] “Good practices in the adoption and promotion of
e-invoicing in Europe: Results of the EMSF good practices consultation” -
ACCA Discussion Paper prepared for Activity Group 2 of the European
Multi-stakeholder Forum on e-invoicing, London, August 2012. [29] The benefits of structured invoicing are analysed in
Annex 1.3.1. [30] E.g. certain unstructured document formats may partially
contain structured information. [31] With the exception of business to consumer (B2C)
sector, where invoices send as PDFs may be the most appropriate solution. [32] http://project.peppol.eu/news/austria-mandates-einvoicing-to-the-public-sector-fostering-peppol-adoption [33] http://presscenter.org/nl/pressrelease/20121213/einde-van-het-tijdperk-van-de-papieren-facturen-in-zicht?lang=fr;
http://www.oneposting.com/PEPPOL-Ireland.aspx [34] http://www.athensnews.gr/portal/8/45720 [35] http://www.treasury.gov/press-center/press-releases/Pages/tg1238.aspx [36] The differences concern the best case/worst case
scenario respectively - “E-invoicing 2010, European market guide”, Euro
Banking Association (EBA) and Innopay, page 15, quoting Celent. [37] “Financing Innovations”, Sarah Jones,
Bottomline Technologies, April 2010. [38] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:048:0001:0010:EN:PDF [39] "Electronic Invoicing Initiatives in Finland
and in the European Union – Taking steps towards the Real Time Economy",
Helsinki School of Economics, B-95. [40] http://www.einvoicingbasics.co.uk/benefits-of-einvoicing/buyer-benefits/ [41] “European E-Invoicing Guide for SMEs”, The
European e-Business Lab, November 2009. [42] “European E-Invoicing Guide for SMEs”, The
European e-Business Lab, November 2009. [43] EUROPEAN COUNCIL 28/29 JUNE 2012 CONCLUSIONS,
Brussels, 29 June 2012. [44] “E-Government as a spearhead”, European
Parliament resolution of 20 April 2012 on a competitive digital single market (2011/2178(INI)),
T7-0140/2012. [45] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:189:0001:0008:EN:PDF
[46] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:048:0001:0010:EN:PDF [47] As far the data protection legislation is concerned,
such requirements are set out in Directive 95/46/EC on the protection of
individuals with regard to the processing of personal data and on the free
movement of such data. The said Directive specifies inter alia when processing
of personal data is legitimate, what principles apply to data processing
operations and confers various rights on the data subjects. These provisions
and in particular the national provisions adopted in the implementation of
Directive 95/46/EC will be fully applicable to processing of personal data in
the context of e-invoicing. [48] It is worth noting, however, that the scope of the 2010
e-invoicing Communication and the EMSF is e-invoicing in general (i.e. broader
than B2G e-invoicing). [49] Tenders Electronic Daily (OJ/TED) – the Supplement to
the Official Journal of the European Union where notices are published for
public procurement contracts covered by the Directives. [50] „Cross-border public procurement above EU
thresholds”, Rambøll Management, May 2011. [51] "Global development of Electronic Invoicing"
Karri Lehtonen, Basware, 2012. [52] For example: "E-invoicing 2010 – Current
status of e-invoicing in Europe", EBA/Innopay, page 25, refers to the
e-invoicing adoption rate of 4-15% (2008); "E-invoicing/E-billing,
International Market Overview & Forecast", Bruno Koch, Billentis,
February 2012 refers to the B2B/ B2G/G2B electronic share of 6-14% (2008 to
2011). [53] In 2006-08 the SMEs’ share of public procurement
contracts above EU thresholds was estimated to be 60% of the number of
contracts awarded, and 34% in terms of total value. [54] These benefits are presented in Annex 1.3. [55] "Global development of Electronic Invoicing"
Karri Lehtonen, Basware, 2012. [56] An overview of the implementation of e-invoicing in
the EU is provided in Annex 1.6. [57] More detailed description of the e-invoicing models is provided in Annex 0. [58] “E-invoicing 2010, European market guide”, Euro
Banking Association (EBA) and Innopay. [59] ”E-invoicing - Final step of an efficient invoicing
process”, Deutsche Bank Research, May 3, 2010. [60] “E-invoicing 2010, European market guide”, Euro
Banking Association (EBA) and Innopay. [61] “Supplier perspectives on the challenges of
eInvoicing with the public sector” by Roman Weber, PEPPOL. [62] The survey was conducted in 2008 by PricewaterhouseCoopers
(PwC) in Finland, Austria, Italy and Spain. The number of replies received: 694
(FI), 126 (AT), 60 (IT) and 34 (ES); source: Annex 2 of „European E-Invoicing Guide for SMEs”. [63] “Supplier perspectives on the challenges of
eInvoicing with the public sector” by Roman Weber, PEPPOL. [64] The World Trade Organisation recognises that
regulations and product standards, if set arbitrarily, could be used as an
excuse for protectionism (source:
http://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm). [65] “[A]s long as it is unclear which e-invoicing standard
will establish itself in the market some companies will shy away from making
any long-term investments. After all, with specific investments it is not only
the direct expenditure but also indirect costs that play a part. The company
decides on a particular e-invoicing solution. This could rule out business
associates who do not adopt this system and this may raise the barriers when
looking for new suppliers or customers. These indirect costs would not be
incurred if interoperability between e-invoicing providers were to be
achieved.” “E-invoicing - Final step of an efficient invoicing process”, Deutsche
Bank Research, May 3, 2010. [66] "Cross-border procurement above EU thresholds”,
Rambøll Management, May 2011. [67] “Action plan for the implementation of the legal
framework for electronic public procurement”, Communication from the
Commission, Brussels, 13.12.2004. [68] http://ec.europa.eu/internal_market/payments/docs/einvoicing/com712_en.pdf
[69] For example the PEPPOL project targeted both the
pre-award and post-award stages of procurement process (in the pre-award phase:
e-signatures, a Virtual Company Dossier, e-catalogues; in the post-award phase:
e-catalogues, e-orders and e-invoicing). [70] Put differently, if a public contract requires
electronic invoicing in a particular format, and an enterprise in another
Member State interested in participating does not currently support that
standard, it is faced with two choices: either it undertakes an investment
which will allow it to invoice using that particular standard, or it passes on
bidding on the public contract in question. Either way, a barrier to
cross-border public procurement is created. [71] Recital (14) of Regulation (EU) 1025/2012: “Within
the Union, national standards are adopted by national standardisation bodies
which could lead to conflicting standards and technical impediments in the
internal market.“ [72] Recital (5) of Regulation (EU) 1025/2012. [73] Summary of stakeholders views are presented in Annex
1.11. [74] “Good practices in the adoption and promotion of
e-invoicing in Europe: Results of the EMSF good practices consultation” -
ACCA Discussion Paper prepared for Activity Group 2 of the European
Multi-stakeholder Forum on e-invoicing, London, August 2012. [75] In 2006-2009 direct cross-border procurement accounted
for around 1.6% of the number of contracts awarded and around 3.5% of their value, see: section 2.1.4 [76] World Trade Organisation,
http://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm. [77] "Reaping the benefits of e-invoicing for
Europe", European Commission Communication, COM(2010)712. [78] http://ec.europa.eu/internal_market/payments/docs/einvoicing/com712_en.pdf [79] As defined in European Interoperability Framework
(EIF) for European public services, Annex 2 to the Communication from the
Commission “Towards interoperability for European public services”. [80] „Supplier perspectives on the challenges of
eInvoicing with the public sector” by Roman Weber, PEPPOL. [81] “Electronic invoice processes in Europe and
enablement of SMEs to use them efficiently”, CEN Workshop Agreement (CWA)
16461. [82] “Good practices in the adoption and promotion of
e-invoicing in Europe” ACCA Discussion Paper. [83] The service providers use different pricing models,
from those who charge a fixed fee per invoice or a monthly rate dependant on
the average number of invoices exchanged, to the recently emerging cases where
the service itself is provided free of charge. [84] For example buyer’s own
platform, value-added network run by a service provider, four-corner model, web
portal for SMEs, etc. [85] For example free for
recipients, free for senders, cost per invoice, monthly fee, initial
implementation fee, etc. [86] Additional information
concerning the potential benefits of e-invoicing is provided in Annex 0. [87] “e-Invoicing Benefits”, Efficient Government
Fund - expression of interest, http://www.scotland.gov.uk/Publications/2005/07/1292532/25341.
[88] Internal document form the Belgian Government. [89] Information provided by the Spanish administration. [90] „AGFA - vurderinger og anbefalinger om elektronisk
faktura i staten” Rapport fra arbeidsgruppe for elektronisk faktura (2008). [91] Since firms are exposed to
market forces, it is assumed that they would switch to e-invoicing as soon as
they see that such decision produces benefits. [92] Commission Work Programme 2013, Annex II “Simplification
and Regulatory Burden Reduction” http://ec.europa.eu/atwork/pdf/cwp2013_en.pdf
[93] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0795:FIN:en:PDF [94] See: Table 4) in section 5.2.1. [95] The CEN standardisation process is described in Annex 0. [96] More information on the
options for standardisation and the CEN standardisation process is provided in
Annexes 0 and 0. [97] "A Digital Agenda for Europe",
European Commission Communication, COM(2010) 245. [98] "Reaping the benefits of e-invoicing for
Europe", European Commission Communication, COM(2010)712. [99] http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals_en.htm [100] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:048:0001:0010:EN:PDF [101] Coherence is evaluated by taking into account also the
secondary impacts (i.e. impacts generated by the increased uptake of
e-invoicing) and the extent to which the Options are coherent with other EU
policies (especially the e-procurement initiative and the objectives of the
late payment Directive). [102] The share of micro enterprises winning public procurement
contracts above EU thresholds was estimated at 18% in terms of the number of
contracts and 6% in terms of value (2006-2009 data). [103] CEN/ISSS Business Interoperability Interfaces for
Public procurement in Europe. [104] „Public Procurement in
Europe : Cost and effectiveness”, PricewaterhouseCoopers, London Economics,
and Ecorys, 2011. [105] It is expected that all of the above
indicators can be collected within one single research project. [106] “2012 Global E-Invoicing Study - A shift toward
e-invoicing ecosystems”, The Institute of Financial Operations &
Basware, (http://www.basware.co.uk/einvoicing-survey-2012). [107] http://www.environmentalleader.com/2010/09/08/how-e-invoicing-can-save-a-small-forest/ [108] E-invoicing 2010, “European market guide”, Euro Banking
Association (EBA) and Innopay. [109] http://www.accountis.com/green-calculator/ [110] „AGFA - vurderinger og anbefalinger om elektronisk
faktura i staten”, Rapport fra arbeidsgruppe for elektronisk faktura, 25.
mars 2008, Fornyings- og administrasjonsdepartementet. [111] ”E-invoicing - Final step of an
efficient invoicing process”, Deutsche Bank Research, May 3, 2010. [112] Although paper invoices can certainly be scanned and
stored electronically, such an approach implies virtually no direct process
cost savings and only limited benefits in terms of accessibility of data: while
it is true that the invoices could be accessed more easily, the data within
them would most likely not be computer readable. [113] http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals_en.htm [114] CEN CWA 16464-2, “Electronic invoicing - Part 2: Model
Interoperability Agreement for Transmission and Processing of Electronic
Invoices and other Business Documents”, ftp://ftp.cen.eu/CEN/Sectors/List/ICT/CWAs/CWA16464-2.pdf [115] http://www.eespa.eu/sites/default/files/EESPA-Information%20Release%202013-01-07-EN.pdf [116] This section is entirely based on information published
on the CEN website (http://www.cen.eu/cen/products/en/pages/default.aspx).