EU directives accelerates development towards electronic message handling

The paper invoice is not a museum piece quite yet. But – have no doubt – it is on borrowed time. The wheels are already turning on a process that will ultimately consign paper invoices to the same dusty corners of our memories as cassette tapes, video stores and cheque books.

By November 2018, all central government departments need to comply with an EU directive whereby they will be expected to be able to receive electronic invoices.

NHS is taking the lead in the UK introducing PEPPOL

In the UK, the process won’t actually start with a government department. It starts with the NHS, whose suppliers will be required to submit e-invoices by 2017 (in fact, the NHS requirements go a bit further, as those suppliers must also have the capacity to receive electronic orders). Once the NHS has implemented the electronic messaging side of things, central government and wider public sector services will follow.

What affects the public sector will also affect any company that does business with it. In order to continue earning a B2G crust, private sector companies will also need to be able to converse with their clients electronically. All will need to use an electronic invoicing service that complies with PEPPOL (Pan-European Public Procurement On-Line). And it’s this switch that will hurry along the demise of the paper invoice.

“The paper invoice is not a museum piece quite yet. But – have no doubt – it is on borrowed time.”

Pagero approved PEPPOL Access Point

PEPPOL is a network that enables the exchange of electronic documents, such as invoices, across a European-wide network. Quite simply, it connects organisations so they can do business electronically. PEPPOL allows access to its network via ‘access points’; organisations that have met a set of published specifications. You might think of PEPPOL as an internet of invoicing – with those access points the equivalent of ISP:s.

The NHS has recently announced its list of approved access points to the PEPPOL framework. Signing up to an approved service (of which Pagero is one) will ensure you can electronically send invoices to the NHS (and receive orders from the NHS) and, in time, the wider government space.

It’s worth noting that the 2017 deadline on the NHS is not fixed. Deadlines can slip, of course. But 2017 remains the target date for the NHS to work only with suppliers who can send and receive e-documents, along with the wider EU-set deadline for governments to comply by November 2018.

The deadline is approaching

Those deadlines are the ticking clock for the paper invoice. If it were left to private sector businesses alone, the decision to move from paper invoicing to true electronic invoicing is one that can be put off. CFOs may baulk at the cost and employ some ‘if it ain’t broke’ thinking while considering their existing invoicing system.

But with government committed to the switch, the public sector will soon shift to the PEPPOL framework en masse. Private sector companies wishing to do business in the public sector will find they simply have no choice other than to access and use the framework.

“The paper invoice isn’t quite dead yet, but it’s safe to say it’s not making any fresh plans.”

Electronic message handling means important cost benefits

And if they’re complying in one part of their organisation, why not across the whole of it? After all, electronic invoicing brings with it a number of cost benefits. As companies make this call, we’ll see a ripple effect throughout B2B where businesses require electronic invoicing from those they buy from and sell to.

It’s starting now and it won’t take long. The paper invoice isn’t quite dead yet, but it’s safe to say it’s not making any fresh plans.

Want to discuss how e-messaging can work for your business? Please do not hesitate to contact me for more information!