The new electronic invoicing system in Italy will impact companies, Public Administration, and the creation of a single European digital market. In addition, digitization opens up new marketing avenues that companies can exploit to their advantage.
As of January 1, 2019, electronic invoicing came into effect in Italy, and it will cover not only invoices to and from the Public Administration but also all B2C transactions, such as those between private individuals.
This means that the receipt or exchange of goods or services must be followed by the issue of a digital invoice, which will gradually replace the analogue invoice. All operators in the sector have pointed just out how radical this change.
For this reason, leading companies in the electronic invoicing sector, such as Doxee, have already begun (for some time now, in fact) to provide companies with free resources (such as this webinar and other documentation) useful for clarifying all possible doubts.
However, the impact of this new billing method will be considerable and will not only affect companies and their internal procedures but will change the entire Italian system.
Before exploring the possible effects of this new obligation, let’s summarize.
What is an electronic invoicing system?
Electronic invoicing is a system for issuing, transmitting, and storing digital invoices.
Officially, the system came into effect on 1 January 2019, and it will replace the current system, which provides for the use of paper invoices.
The format to be used at every stage of the billing process (from issuance to transmission to storage) is the so-called XML – eXtensible Markup Language – a computer language that allows you to define and control the meaning of elements in a document for legal purposes.
This obligation will not apply equally to all private operators. In fact, some exceptions have been provided for, at least until July 2019, for certain professions.
The importance and sensitivity of the changes required for the new system is also demonstrated by the fact that the sanctions for non-compliance will not be applied immediately.
Instead, they will be applied after a period where sanctions will be reduced and in some cases, not applied, so as to allow companies to have time to implement the necessary technologies.
The operational impact of e-invoicing
In the light of this brief summary, it is clear that the first impact will be on the companies themselves. It will, in fact, be necessary to fulfil a series of requirements in order to comply with the law.
What are they?
First of all, each company should carefully assess its own internal procedures to ensure their compliance with what is required by law. In fact, it will be necessary for all companies to be as aligned as possible in terms of accounting and the transmission of invoices.
At a later stage, the company will have to provide its official email address by registering it on the Italian revenue services official website in order to receive invoices on the correct XML channel.
Subsequently, it will have to update or integrate its customers’ data in order to create its own database for sending invoices. The creation of this database is one of the most delicate stages, so it is advisable that all addresses are verified, as they must be sent to the SDI (Exchange System) and will be the reference for sending the digital invoice.
After that, the focus should shift to data management. Each company, in fact, will be required to implement a management system that is able to collect all the data necessary for the electronic invoicing system and to generate documents in XML format.
In addition to these initial requirements, there is an additional requirement if the company has to send or receive invoices from abroad. In this case, a multi-channel invoicing management system will be required, one that is capable of interfacing both with the Exchange System and with other platforms.
Electronic invoicing system also entails additional storage requirements.
Any company or individual who issues or receives electronic invoices (including those who are not required by law to use this format) must keep the digital documentation for at least 10 years. To do this, companies will be able to choose whether to develop an in-house preservation system or to adopt an outsourced service, relying on professionals in the sector for all the related formalities. This last point allows us to underline an important aspect of compliance. Since operators can entrust other companies with the transmission, receipt, and digital storage of electronic invoices issued and received by the Exchange System, the choice of the intermediary is strategic.
It will always be necessary to work with? qualified intermediaries, such as Doxee, who can guarantee a secure service, as well as operational continuity in the receipt of electronic invoices and in their subsequent distribution to the final customer and to the buyer/buyer in the context of the electronic business transaction.
Not only that.
Electronic invoicing system is not just a compliance matter, it can also be an opportunity to make corporate administrative procedures more streamlined, transparent, and effective. This is a key factor to consider when choosing a partner/supplier. For example, the Doxee Platform allows enables a secondary stream, with which a copy of the invoice may be sent in PDF or in printed form via traditional channels, such as regular or mass mail delivery or certified electronic mail (PEC) etc.
The financial impact of e-invoicing
It is estimated that the introduction of electronic invoicing will have a significant financial impact for the entire Italian system. Companies will benefit from significant savings.
It is estimated that about 2.3 billion invoices are issued in Italy every year. Of these, 1 billion are to the Public Administration, while 1.3 billion are issued in transactions between private individuals. If the digital transformation of invoicing is truly completed, it will certainly be possible to reap significant benefits from new economies of scale.
Considering the savings associated with printing and mailing activities, customer relations management, and preservation management, the introduction of the electronic invoicing system will result in more than 3,000 Invoices per year for those who produce/receive, a benefit of between €7.5 and €11.5 per invoice.
Let’s look at what a detailed costs analysis can tell us about the potential savings.
For example, for a company that handles fewer than 3,000 invoices per year, sending an invoice entails costs from a minimum of € 1.80 (for the use of electronic mail) to a maximum of € 3.5 (for certified delivery) or € 3.7 (for delivery via regular mail).
With the introduction of the new digital format, costs are significantly reduced. Uploading documents to generate an XML file in electronic format (the FatturaPA format), can cost between €0.9 and €1.2 per invoice.
Instead, data entry for the web form costs between €1.3 and €1.7 per invoice, while the generation of an invoice in electronic format directly from management and then uploaded via PEC on the Exchange System requires between €1.4 and €1.8 per invoice.
Instead, it has been estimated that the effective implementation of economic invoicing for all private transactions would result in savings of approximately €60 billion per year.
The opportunity to rethink everything
The advantages of electronic invoicing do not stop here. In fact, companies will be driven to implement a digital transformation, which will lead them to radically rethink their active invoicing procedures.
Not only that.
Using an electronic format will considerably reduce errors associated with the entire invoicing cycle, requiring only limited intervention on the part of administrative staff. In addition, once it’s possible to automatically reconcile data, this will allow implementation of more efficient authorization processes for controlling invoicing data to avoid falsification and duplication.
In addition, e-invoicing will help reduce the average payment time, since the relevant legislation provides for very tight deadlines for invoicing (before the latest amendments were approved, invoices should be issued within 24 hours after the conclusion of the transaction between private individuals).
If we consider that this transformation could extend beyond the simple invoicing cycle, we realize that 1 January 2019 could be the beginning of a cultural revolution. The noble goal would be to digitize other procedures and other documents of the order cycle or, even to encourage adoption of digital management for all business relationships between individuals and Public Administration.
The benefits would be immediate.
We could expect transactions that are more transparent, streamlined, and effective. And, moreover, eco-sustainable, considering the savings in paper and printing as a result of moving away from the paper invoice, as well as related savings for delivery and storage.
In the case of storage, the use of digital technologies would reduce the common distrust of such tools, showing how they can be used to store large amounts of documents such as invoices, books, and records in addition to Transport Documents, Contracts etc.
In essence, the obligation of electronic invoicing could be the ideal time to rethink active and passive cycle processes in order to reduce their complexity and eliminate costs. This will also make it possible for Italian companies to become more competitive in the European market.
In fact, it is no mystery that the European Union is progressively pushing towards the digitization of all management and administrative processes.
The European directive 55/2014, which introduced the electronic invoicing system, and the decision of the European Commission 1870/2017, which imposed the obligation to adopt a format for Public Administration that adheres to international standards have a single major objective: the creation of a single European digital market.
An area of cross-border and cross-sector interoperability is being created to help overcome the limitations of national formats that make it difficult for public administrations, intermediaries, and the entire sector of private operators in the various member states to communicate and interpret tax documents.
When billing also transforms communication
The impact of the electronic invoicing system on business-to-consumer communication?
The surprise is understandable.
Who would think that digital billing could become a great marketing opportunity? And above all: how? One way is through the electronic invoicing service in video format provided by Doxee: the so-called Doxee Pvideo®.
Let’s start with how.
The electronic invoice must be issued and delivered in digital format to the customer’s PEC address. In a nutshell, this mechanism replicates that of a DEM, one of the main tools used by companies to market to their target audience, get new customers, and keep them coming back.
With Doxee Pvideo® you can provide an additional service that goes beyond simple billing.
First, because the invoice is sent in video format via email. And it is now known that this is the most effective format of communication. One-third of the actions that happen on the internet today involve the use of video content on any type of device.
This should lead users to be more willing to open the email and read its full content.
But there’s more.
With Doxee’s Pvideo® you can provide your customer with relevant experience.
The amount of content available to us today is too much for any one person to manage. As a result, users are led to select the content that interests them most and discard the rest. All in a matter of seconds.
Therefore, to be effective in digital marketing, everything has to be relevant. And what could be more relevant than a video that speaks directly, in a way that is clear and easy to understand, in order to explain the content of their bill?
In addition, Doxee has enriched its Doxee Pvideo® with a strategic feature: dynamic, or customizable, storytelling. Any user can choose the content of the video based on what they want to know. The user decides the narrative path of the video: it is the person and not the product that is the main focus, where companies and customers collaborate to create value together, a form of collaborative marketing known as co-creation, a plus for any B2C initiatives.
There are many benefits of this approach, and we invite you to learn more about these by signing up for our webinar.
The new electronic invoicing system will have a major impact on the country and on businesses. But it is also a great opportunity for market expansion and increased competitiveness.
However, it is necessary to rely on a trusted partner such as Doxee, who has the experience, solutions, and innovative services in place to help you manage this transformation.
Because, as with any great change, the important thing is not to be left behind.
Find out how Doxee Interactive Experience – Doxee iX – will help you to drive greater customer engagement and improve the customer experience. Download the solution overview:
Di studi classici e di formazione giuridica, Edoardo è un giovane copywriter digital interessato al tema dell’innovazione, che ama approfondire e raccontare con rigore e passione come fosse un romanzo, il più importante, perché riguarda ciascuno di noi.