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The new eInvoicing standard for the public sector

A new standard for eInvoicing for public sector organisations was introduced in European Union member states as of April this year. The directive applies to national-level public bodies and will be extended to sub-central organisations in April 2020.

Purchasing authorities at national level are now required to only accept compliant eInvoices from suppliers.

Syntax and semantics
The new standard creates a core data model encapsulating information typically required for invoicing. The syntax – which is the technical structure of the invoice in terms of machine-readable language – is not affected.

Instead, it is a “semantic” standard – i.e. relating to the meaning or logic of the invoice content – which uses international XML message standards to capture all the information as defined in the data model.

The standard is supported by PEPPOL (Pan-European Public Procurement Online), the EU’s standard data exchange mechanism for public sector purchasing.

The move creates an EU-wide norm rather than a new eInvoicing infrastructure so country-specific variances will continue to exist for the foreseeable future.

Ongoing transformation
The directive stops short of mandating the use of eInvoicing for suppliers to the Public Sector but the move is widely expected to continue the ongoing shift to electronic billing.

Some European countries, such as Norway and Denmark, have already implemented such a requirement with great success and others are actively considering following suit.

The European Commission foresees that the move will provide efficiency savings to Public Sector organisations, boost cross-border trade, assist SMEs, hasten the uptake of eInvoicing in B2B commerce and contribute to environmental sustainability.

More broadly, the EU has committed to research and development in the fields of automation and machine learning which will be central to further evolution in eInvoicing and eCommerce in general.

It is a significant step forward in the ongoing transformation agenda being pursued by organisations across both the public and private sectors in terms of back-office processes and will serve to benefit both buyers and suppliers.

Paper-based invoice management is expensive but still very widespread: 90% of the world’s invoices are still processed manually (Billentis 2019). Public sector organisations generally have a very high frequency of transactions so the potential savings made possible by this and any future moves to promote eInvoicing are in the interests of all stakeholders - not least the taxpayer.

Download the 2019 Billentis Report – The e-Invoicing Journey 2019-2025, in partnership with Proactis