Electronic invoicing (e-invoicing) can bring many benefits to companies, giving them the means to adapt to the different requirements of traditional and digital trade worldwide, according to business experts. E-invoicing has several potential benefits particularly for small and medium enterprises (SMEs), said Luisa Scarcella of the International Chamber of Commerce (ICC).
It can shorten processing cycles including payments of accounts receivable and tax recovery. It can also cut transaction costs, improve tax data management and enforcement, provide real-time control over movement of goods, support the modernization of the economy, and make it easier for companies to operate on a global scale.
e-invoicing can help both multinational companies and SMEs alike, but more so for the latter, who “don’t have the capacity and means to adapt to the different requirements around the world,” the executive said.
Scarcella gave her presentation at a recent forum on accelerating trade digitalization that was organized by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in cooperation with the Asian Development Bank and ICC.
Invoices are one of the most important documents for trade, providing a basis for payment and business management as well as for trade control and regulatory compliance.
Andre Hoddevik, secretary general of OpenPeppol AISBL, at the same event said e-invoices can improve tax, business and trade services. E-invoicing is crucial for the future of the global trading system, which is why governments and companies are starting to embrace it to deliver increased efficiency, accuracy and reliability in cross-border transactions.
However, connecting isolated digital systems remains a key constraint, and as more countries create their own e-invoicing frameworks, there’s the risk that they would enact country-specific and technical standards that ultimately act as a barrier to digital trade.
Such constraints make it harder and more expensive for companies, especially SMEs, to sell to and support customers in multiple markets.
“The potential of electronic invoicing in facilitating cross-border commerce will not be unlocked if the implementation of e-invoicing persists with the current level of diversity of approach among jurisdictions and law enforcement,” Hoddevik pointed out.
He added: “It is essential that electronic invoices be recognized and trusted by both private sector and government agencies. And in the case of international trade, that trust needs to extend across borders.”
What is needed is a consistent legal, administrative, and technological global framework and the adoption of invoicing into the broader digitalization strategies of public administrations and businesses alike, he further stated.
“There needs to be common/coordinated rules and technical standards and processes to enable the interoperable interpretation of the invoice in digital form.”
The good news is that one such framework is now available through Peppol, a key interoperability framework now being used in many countries, Hoddevik said.
Peppol used to stand for Pan-European Public Procurement On-Line, but this name was dropped in 2018 for just Peppol.
Now Peppol is the name of the interoperability framework, while OpenPeppol is the name of the organization.
Peppol integrates business processes by standardizing the way information is structured and exchanged.
Established in 2012, OpenPeppol is a member-driven nonprofit and democratic association set up as an Association Internationale Sans But Lucratif (AISBL) under Belgian law.
“Our members come from the public and private sectors, with membership continuously increasing as new members join from all around the world,” Hoddevik said.
As of November 2022, there are 18 countries with Peppol authorities, 42 countries with OpenPeppol members, 500 OpenPeppol members and over 723,000 receivers in the network.
Hoddevik said Japan’s Digital Agency joined Peppol as a new authority in October 2021 and in October 2022 announced the availability of its Peppol invoice specifications for use by accredited service providers.
A new Peppol authority was likewise established in Finland this year, while India has three service providers joining OpenPeppol this year. “We are hopeful that Malaysia will become a Peppol authority in the near future as well,” he said.
He also mentioned the enforcement of the UK-Singapore Digital Economy Agreement in June this year. The trade deal provides for, among others, open digital markets, free flow of trusted data, guaranteed protections for personal data and intellectual property, and cheaper trade through the adoption of digital trading systems.
Crucially, the UK-Singapore pact also recognizes the importance of implementing measures for e-invoicing and cross-border interoperability using international frameworks.
Peppol stakeholders include end users, who are buyers and sellers that send and receive business documents and are not required to be members of OpenPeppol. Service providers, meanwhile, enable business process interoperability between end users, while Peppol authorities are policy enablers—confined to government departments or agencies for now—that drive the adoption of Peppol in a jurisdiction.
More information about Peppol can be found at www.peppol.org. By PhilExport