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Avoiding the e-invoicing toxic mix

Monday 13th October, 2014

This time last week Barcelona was playing host to the great and the good of the einvoicing world at the Exchange Summit. Although this was the first Exchange Summit, the event is actually the natural successor to the well-established EXPP conference. Picking up where EXPP left off, the Exchange Summit aims to take the einvoicing topic and broaden it to cover the increasingly related issues – such as supply chain finance for example, and the growth and importance of networks. Joannes von Mulert’s event has big ambitions, and next year’s conference, at the moment scheduled for Frankfurt, is expected to take a deeper look at some of the issues touched on last week.

And despite the growth of einvoicing over the last few years, there are still some big issues – and global penetration remains patchy. As opening keynote and founder of the EXPP conference, Bruno Koch said - of the 500 billion invoices sent last year, 40 billion were paperless, and of those, only 6 billion were set within Europe. In comparison, some of the Latin American countries are streets ahead in terms of adoption, mostly fuelled by mandatory requirements. And although the drivers for creating that environment are very different than they are in Europe, the advantages the Latin American countries are gaining as a result, are being missed.

But, of course if something’s offering up undeniable benefits, and yet is still being slow to develop, there are usually solid reasons. And einvoicing is no exception. Reasons tend to vary country to country, organisation to organisation but from chatting to attendees, they tended to include a lack of time to devote to an implementation project, doubt in the ROI, budget of course and an overall acceptance of the status quo. But if you add to that infrastructure and technology issues – the mix has the potential to be toxic.

And that toxic mix is something which the solution providers have made multiple inroads into addressing, including working towards the interoperability of their respective networks. However, discussion panels during Exchange Summit, including PEPPOL and EESPA representatives agreed that it’s unlikely that just one standard will prevail. As Esa Tihilä, Co-Chair of EESPA and CEO Basware said, ease of use is important, and one that the market will decide.

However it was agreed that any development of standards should have a common denominator, but without, as  some members of the panel pointed out, too much rigidity which would only add to complexity, with a correspondingly negative impact against the groups’ overall aims. There's no doubting the resolve of some of the players in the European market however, and it’s the European Commission’s goal to make einvoicing the predominant mode of invoicing by 2020, which will be helped to a large degree by adherence their April 2014 directive.

But with over 600 suppliers and ever decreasing business margins, the market is only going to get more competitive. The next 2 – 5 years should see some interesting developments in the e-invoicing world, both in terms of the service providers’ offerings, business models and partnerships, and also in the deeper strategic reach of einvoicing to produce real business outcomes.

And as day one tipped into evening sangria overlooking Barcelona harbour, with Gaudi’s unfinished masterpiece in the distance, I was reminded that all great things take time – and while we seem to be endlessly reaching towards that elusive e-invoicing tipping point, the end game is certainly within sight.

Look out for more updates from the Exchange Summit later this week

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Avalara helps businesses of all sizes get tax compliance right. In partnership with leading ERP, accounting, eCommerce and other financial management system providers, Avalara delivers cloudbased compliance solutions for various transactional taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. Headquartered in Seattle, Avalara has offices across the U.S. and around the world in Canada, the U.K., Belgium, Brazil, and India.