Based on the Billentis report of 2019 (The E-invoicing Journey 2019-2025), automated e-invoicing will generally result in cost savings of 60-80% compared to conventional paper format invoices.
In this age of digital transformation, optimizing invoice flows is top of corporate agendas for most companies to improve efficiencies and reduce operating costs. And many companies want advanced solutions using modern cloud-based business networks for procure-to-pay and order-to-cash processing. Paperless invoicing through digitization – let alone electronic invoicing – is one step closer to fully optimizing invoice flows and enabling end-to-end business process automation.
In the last couple of years, many countries in Europe have adapted their e-invoicing legislation to enable the digitization of paper invoices. The most recent example is Croatia which, from January 2019, allows for digital invoices.
From our research, looking at the legal aspects for the digitization of inbound paper invoices across the EU and EEA, the majority of European countries allow for the conversion of paper invoices with the exception of few (almost 30 countries allow for digitization and 7 don’t, namely Bulgaria, Cyprus, Iceland, Lithuania, Montenegro, Malta, and Slovenia).
For the majority of countries in Europe that allow digitization of paper invoices it is often subject to certain conditions which vary country to country. The requirements, which relate to the digitized invoices in particular countries, include specific signature or timestamp requirements, the regulation of any third-party service providers involved, and specific storage requirements.
In most countries we have seen some commonality in requirements:
- One of these requirements is well founded in the general invoicing rules of the VAT Directive and applies to all countries either explicitly or implicitly. It concerns the authenticity and integrity of the invoice during and after conversion. After conversion this is usually achieved through an e-signature or business control-based audit trail (BCAT).
- In most countries, conversion must follow a legally defined digitization process which aims to achieve a standard goal, i.e that the electronic output file is a true and accurate reproduction of the original document.
- Digitization rules often explicitly refer to certain general e-invoicing requirements which equally apply to e-invoices and converted invoices, such as general e-invoice archiving, legibility and availability for audit purposes.
With many European authorities introducing legislative changes to enable invoice digitization, companies are one step closer to full digital transformation of their business processes. But, before setting up a digitization process, businesses must be prepared to comply with country-specific rules which vary widely across the EU and EEA.
How to comply with the demands of a digital landscape
Through our knowledge and experience, we support companies across 30 countries in Europe looking to build a solid digitization process for inbound invoices in compliance with country-specific regulations.
In addition, Sovos TrustWeaver E-Archiving solution provides a single universal, compliant archiving solution for digitized invoices (in addition to e-invoices) which complies with country-specific storage requirements regardless of the number of service providers and e-invoicing software solutions used.