As an internationally operating company with subsidiaries in seven different countries, we have multiple touchpoints and extensive experience with E-invoicing around the globe. While the subject of E-Invoicing is not new, there are still considerable differences as to how it is implemented in different countries. In this article, we want to look at the similarities and differences when it comes to E-Invoicing at an international level and explore how other countries can benefit and learn from the prime example of Singapore’s “InvoiceNow” E-Invoicing-network.
E-Invoicing in the EU: A focus on legal obligations and technical implementations
EU countries and the European Commission decided to introduce a European Standard for E-invoicing back in 2014. The goal was to come up with a standard that facilitates cross-border commercial relations and guarantees the origin and authenticity of electronic invoicing. Since then, E-Invoicing on business to government transactions has been made mandatory in several countries under the European Union.
E-Invoicing in the United States: Increased efforts for digital collaboration
The concept of E-Invoicing is not completely new in the United States. However, for many years, the sector was characterized by multiple technical standards, formats, and networks, which meant that companies were forced to work with multiple networks depending on which one their customers were using. To facilitate payment processes and increase efficiency, the Federal Reserve launched an initiative in 2015 to standardize E-Invoicing across industries. While for many companies, the focus still lies on the optimization of internal operations (AR and AP management), efforts to intensify digital collaboration and interaction between trading partners are increasing.
E-Invoicing in Singapore: A focus on SMEs
In early 2019, Singapore launched a country-wide E-Invoicing network, now known as “InvoiceNow,” for sending and receiving electronic invoices. The network maintains the standards set by the IMDA (Infocomm Media Development Authority), the body which is also responsible for advertising InvoiceNow.
The IMDA says that its mission is to drive Singapore’s digital transformation ahead by raising awareness among companies, private citizens, and indeed society as a whole. This approach is evident in the body’s promotional work for InvoiceNow. The information material is straightforward and simple, featuring numerous clear graphics, videos and webinars, and a bright, almost playful, design. It is obvious that simplicity and user-friendliness have been prioritized.
The same applies to the way in which the IMDA makes the case for InvoiceNow, placing far more emphasis on the benefits than on the technical details. The promotional materials are primarily aimed at convincing SMEs to implement E-Invoicing, with larger companies of secondary importance. From March until the end of 2020, the IMDA even offered SMEs that registered for InvoiceNow a voucher of S$200.
Different approaches in different countries
While there are a few initiatives that focus on communicating the benefits of E-Invoicing, for the most part discussions in Europe center on legal obligations and technical implementation. Unfortunately, this often means that the many benefits offered by E-Invoicing, from faster transmission through reduced paper to easier processing, go ignored. In Singapore, the IMDA has done a much better job of communicating these benefits.
It remains to be seen whether the focus on incentives or obligations is more effective at increasing the use of e-invoices. We have certainly noticed increasing demand from our customers in Asia. In Singapore, the IMDA has recognized us as a Peppol Ready Accounting Solution Provider, and we have successfully completed our first projects for accepting and processing InvoiceNow invoices.