On June 15, the Digital B2B Observatory (Polytechnic of Milan) held its annual conference with this year’s theme, “B2B: physically distant, digitally close” (“B2B: fisicamente lontani, digitalmente vicini”), a title that is as eloquent and appropriate as ever.

The difficulties and extraordinary contingencies of the past year have led us, as businesses and as citizens, to make a virtue of necessity, showing us clearly how digital has now become not just an ally, but an essential component of every activity. In this last period, digital tools and technologies have provided the lifeline that has allowed us to carry on our business and personal relationships, albeit in a way that is new, at least in some respects, as was amply demonstrated during the event.


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Conference themes

The conference addressed four themes, which were aimed at analyzing some aspects of the digitization of B2B processes that have been especially relevant in the last year. These aspects included B2B ecommerce, the application of RPA and artificial intelligence solutions to supply chain processes, the customer experience in B2B and, of course, the state of the art of electronic invoicing projects in Italy and Europe and those of the NSO (Nodo Smistamento Ordini, the system used in Italy to exchange eletronic orders).

The approach has allowed us to address the theme of process digitization from different points of view, highlighting how this topic is not relegated to a specific sector, but instead is a topic that is applicable to multiple areas and according to multiple variations.

We had already guessed it, but the data collected by the Observatory has largely confirmed it: the companies that were able to get out of their comfort zone and proactively approach the possibilities offered by digital technology were those who best dealt with the blow inflicted by the pandemic crisis.

In Italy, this approach has often been driven by the need to respond to new regulatory obligations, such as the introduction of the NSO electronic order, but this does not diminish the value of the results achieved.  It is here, then, that the crisis and its consequences could be the decisive push for companies and countries that, up to now, have shown less enthusiasm for digital innovation and electronic invoicing processes.

In fact, the survey conducted by the Observatory found that 38.5% of Italian companies declared their intention to invest in digital tools and technologies by 2022, among which process automation solutions stand out (16%), followed by blockchain and artificial intelligence technologies, and supply chain monitoring tools (13.8% and 13.1% respectively).

At this point, let’s get to the heart of the topic that interests us most: the progression of e-invoicing in Europe in order to understand the current situation, and the main innovations we should expect in the near future.


Electronic Invoicing in Europe: The state of the art

First of all, it is useful to quickly recall the current regulation of reference, which at the European level for e-invoicing is EN Directive 2014/55. This directive introduced the obligation for all public administrations to be able to receive and manage e-invoices drafted in formats that are compliant with the European standard EN 16391, i.e. XML UBL and CII formats. According to the deadlines defined by the directive, central public administrations had time to comply until 2019, while local public bodies had an extra year, with the deadline set for April 18, 2020.

To date, therefore, member countries are substantially aligned with this directive and some have already taken further steps or are planning to take them, having been able to observe the benefits brought by the digitization of business processes in general and the introduction of e-invoicing, in particular.

According to available information, some countries have already gone beyond the directive’s provisions, introducing mandatory e-invoicing in B2G. These countries include France, Austria, Germany, Sweden, and the Netherlands. In addition, some countries, including France and Germany, also provide for the mandatory storage of invoices in digital format, as is the case in Italy.

On the other hand, the obligation that currently binds all (or almost all) Italian companies to use electronic invoices, even in B2B, remains an Italian peculiarity. It should be remembered that Italy had to obtain a specific derogation from the European Commission in relation to legislation governing the VAT sector (European Directive 2006/112) in order to extend the electronic invoicing requirement to the B2B sector.

Other European countries may soon take the same path.

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New obligations on the horizon?

According to the data gathered, the spread of electronic invoicing in Europe may soon accelerate as more and more member states are considering introducing an obligation for all companies to exclusively use e-invoices in their transactions with government bodies. Slovenia, Belgium, Luxembourg, Poland, and Finland, for example, share this view.

In addition, for many countries, the obligation to digitize invoicing processes could soon become a reality, even for transactions between private individuals. Of course, France stands out from the rest and has already outlined and shared a structured roadmap for implementing the obligation. Over a period of three years, through a series of progressive steps, all French companies will have to adapt to the new provisions.

According to the statement, the abandonment of analog invoicing in favor of electronic invoicing should begin in 2023 and end in 2025, in a process that will gradually involve all companies, according to their size, from the largest to the smallest. The more technical details of the process are still to be clarified in the near future.

Not only France, but other member states have said that they intend to introduce the B2B obligation. While many countries have not yet outlined a precise roadmap, they are carrying out the preliminary analysis required to introduce the B2B requirement in their own national contexts. This position is shared by countries such as Germany, Belgium, Poland, Slovakia, Slovenia, and Finland. It will be necessary to analyze how each of these countries will decide to materially address the transition from an organizational and a technical point of view.

The benefits of electronic invoicing: What the Observatory’s data can tell us

The implementation of electronic invoicing in Europe, at an increasingly widespread level, is one of the fundamental steps towards the creation of a fully operational and functional European Single Market.

Even though there are still many barriers to be overcome, it is already possible to appreciate many of the benefits of electronic invoicing that represent incentives for companies that do not yet use it extensively.

Research conducted by the Observatory has shown that, based on the countries in their research where B2G invoicing is already in use, companies in  43% of the countries have seen a reduction in management costs, and 14% have observed greater control and better planning with respect to the processes involved.  In addition, as the Italian experience has shown, e-Invoicing enables greater control over transactions and tax compliance and has proven to be a valuable tool in the fight against tax evasion.

It is precisely the expectation of obtaining a range of benefits, at multiple levels, that acts as an incentive for European countries and fuels initiatives aimed at encouraging the introduction of e-invoicing.

The countries surveyed by the Observatory said that they expect to obtain the following benefits from the introduction of the obligation:

  • Reduced tax evasion and an increase in VAT revenue, with a consequent reduction in the so-called VAT gap;
  • Encouraging the digitization of businesses and public administrations, using e-invoicing processes as a kind of pathfinder;
  • Encouraging the simplification of administrative and fiscal processes.


What tools can be used for Electronic Invoicing in Europe?

The possibility of exchanging commercial documents through shared formats and channels is essential to break down the barriers between markets and facilitate transactions between economic operators and public bodies across the EU. From this point of view, the use of the standardized format for the European e-Invoice and of tools such as the PEPPOL network represent a step in the right direction and a valid support for countries and companies.

The work carried out so far by the European Union and member states has enabled the development of standards, formats, best practices, and shared tools to facilitate collaboration between states. Directive 2014/55, which we have already mentioned, aims to provide a European format for e-invoices, in order to standardize and align member countries more closely, thus facilitating collaboration.

The PEPPOL project, which we have mentioned several times in our contributions, is also moving in the same direction. The PEPPOL architecture, developed by the OpenPEPPOL association and with the contribution of individual states, aims to provide tools to facilitate eProcurement procedures at a cross-border level, also providing support to governments and companies.

Over the years, PEPPOL membership has been growing, even if the level of use and maturity is still very uneven among the various European countries. The reality of PEPPOL, therefore, is well known but evidently not yet fully explored. However, all the conditions exist for PEPPOL to become an increasingly widely used tool, facilitating collaboration between states, businesses, and public administrations.


Regulatory obligation, an infallible driver

From the surveys conducted by the Observatory, however, a further constant emerges, an element that has already been noted on several occasions and that is further confirmed: the real driver, the most powerful incentive for the massive digitization of processes, is the introduction of a regulatory obligation.

As noted with respect to the Italian context, it was the regulatory requirement for electronic invoicing first, and then for electronic NSO ordering, that led to a boom in the implementation of digitized processes. In fact, even if the benefits of digitization are independent of legal constraints, in most cases they are not sufficient to stimulate companies to undertake the necessary effort to completely overhaul their internal processes.

For this very reason, then, more and more European countries are considering the possibility of introducing regulatory obligations that are able to support and drive the digitization of businesses and local authorities.


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