64% of European Companies Are Missing Out on the Competitive Advantages of E-Invoicing and
E-Archiving
A study by PricewaterhouseCoopers predicts much catching-up over the next 12 months
31 January 2006 - According to the study “e-Invoicing and e-Archiving – taking the next step” by PricewaterhouseCoopers only 36% of European companies with a high volume of invoices actually use e-invoicing and e-archiving*. Companies that have implemented these solutions benefit from increased efficiency (71%), cost reduction (61%) and faster payments (38%). In addition, e-invoicing and e-archiving reduces disputes with customers and suppliers about invoices (21%).
Some respondents indicated that they chose or would choose
e-invoicing because customers (19%) or suppliers (16%) opt or would prefer to work electronically. 35% of companies say that their customers are not ready for or are unsuited to a system of e-invoicing, which also applies to 21% of their suppliers. For 30% of those surveyed, it is internal systems that are not compatible or ready. Other obstacles include complexity (23%), the high investment cost (24%) and the fear of too low a yield (10%).
38% of the companies that have implemented e-invoicing still exchange paper invoices in parallel, while this is no longer needed if their technical solution has been well implemented in a compliant fashion. In a test phase, it might be good to still exchange paper originals or paper copies but, in a production phase, it should be possible to achieve a completely “dematerialized” process. If the companies exchange EDI (Electronic Data Interchange) invoices with parallel paper invoices, make sure it is clear which invoice stream qualifies as the original invoices and which are “copies”. Otherwise, the companies might end up with the risk that the tax authorities consider these as two valid streams, with the result that VAT should be paid twice or that penalties are set for non-compliance in the case of one of the invoicing streams.
In general, companies tend to feel well informed about most dematerialization technologies. They are most familiar with scanning (78%), e-invoicing (64%) and EDI (64%). Of the respondents, 22% are less well informed about electronic signatures and 17% about
e-archiving. The companies that have already implemented e-invoicing use especially EDI, EBPP** (Electronic Bill Presentment and Payment) and scanning. Implementation plans for the coming year are predominantly focus on Advanced Electronic Signatures and EIPP (Electronic Invoice Presentment and Payment).
“E-invoicing and e-archiving are still in their infancy. The legislation is ready and the technology exists. It is now up to companies to take the next step, and they certainly will do so. In 12 months, the results of this study will look completely different”, said Martin Diviš, Manager in the Tax and Legal Services department at PricewaterhouseCoopers Czech Republic.
As for archiving, four-fifths of companies still store invoices on paper. 72% percent archive the invoices on a server at the same time. Other media on which electronic versions are stored are CD-ROM (29%), DVD (15%) and tape (28%). Be aware that electronic invoices must also be archived electronically in most EU member states and that printed copies of electronic versions are not compliant archives. Only 5% of companies archive abroad, which probably has to do with the fact that most companies still archive paper versions and that is more easily done locally.
The 2001 European VAT Directive concerning invoicing aims to simplify, modernise and harmonise e-invoicing and e-archiving with regard to VAT. By January 2004, this Directive was to have been transposed into the national legislation of each of the then 15 Member States, with a date of 1 May 2004 being laid down for the 10 newly joined Member States. Despite the facts that the legal obstacles have been removed, many companies are only now looking at implementing e-invoicing and e-archiving. Even though the requisite technological solutions are available and significant increases in efficiency and reductions in costs are expected, still e-invoicing and e-archiving are not very widespread today.
* E-invoicing is the sending of invoices “by electronic means”, while e-Archiving is the storage of electronic invoices.
** EBPP means that invoices are sent and paid over the Internet, for B2C sales. EIPP concerns a B2B environment.
END
Notes to the editor:
- 1. The companies surveyed have at least EUR 100 million in revenue and process at least 2,000 invoices a year, while 28% of them send out more than 500,000. Of the companies questioned, 36% are already using e-invoicing for customers and/or suppliers. Twenty percent are currently in the process of implementation and 29% plan to start in the next 12 months. Another 23% of companies have not yet fully considered e-invoicing while 3% have ruled out implementation. The initiative for e-invoicing and e-archiving usually comes from the company itself (64%), but sometimes customers (15%) or suppliers (11%) lead the process.
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Download the report e-Invoicing and e-Archiving – taking the next step.
Journalists can order a hard copy of the report from Liesbeth Driesen of Luna:+32 2 658 02 93 or liesbeth@luna.be.
Other interested parties can order a hard copy of the survey from Marie Pivetta at PwC: +32 2 710 72 59 or marie.pivetta@pwc.be.
- PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using Connected Thinking to develop fresh perspectives and practical advice.
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