Centralizing e-invoicing for international companies – Interview with Comarch

Can you share with us some details on how international companies deal with mandatory e-invoicing and national legal compliance?

Having a robust e-invoicing solution in place as well as being legally compliant with numerous data exchange regulations posed by governmental entities represent two of the hardest goals that today’s enterprises must achieve. It comes as no surprise that those companies that operate globally are considered to be in the most challenging position. After all, they need to make significant internal changes, both on the technological and business level, in order to improve business efficiency and adjust to dozens of mandatory procedures and platforms – all at the same time. And whether we’re talking about the interoperability or integrity of the content, authenticity of origin, protection of sensitive data, or archiving of past invoices – for each of the countries those companies operate in, the rules are somewhat different. So, what’s the solution?

In the past, there was this tendency among businesses of all sizes to work with multiple technology providers operating within a given market. Such an approach, however, was economically inefficient. Not only did those companies have to deal with a high amount of costs and administrative work, but they also had to find their way through a labyrinth national requirements for each of their branches. Plus, they had to make all of these systems and services work in unison – which can be quite challenging. From what we have observed recently, the same companies are now becoming more interested in the centralization of e-Invoicing processes, that is in joining forces with a single data exchange technology provider whose solutions will allow them to easily send and receive invoices in various formats across their business networks. Such an approach is thought to be way more beneficial in the context of optimizing one’s costs and document exchange processes.

What is more, with numerous regulations being introduced almost on a daily basis, for example, in Italy, Poland, Germany, and many other European and non-European countries, the differences start to become ever more visible. Fortunately, when a given format or platform becomes a standard, it is much easier for an experienced technology provider to cover its grounds and guarantee interoperability. That’s yet another reason why companies opt for collaborating with one technological partner – they are looking for both effectiveness and convenience. If a single provider was capable of delivering all documents to the right recipients, no matter the format or location, would a company have any second thoughts? Probably not.

Can you shed a bit more light on how the clearance model works why more and more countries are opting for this approach? What are some advantages over the post-audit model, especially in terms of benefits for businesses?

In the clearance model, it is forbidden to issue invoices via a direct line between a buyer and a seller. Instead, one has to submit the documents in advance to the relevant tax authority to get approval (Brazil, Mexico) or send them via a government platform (Italy, Turkey). Such an approach allows the authorities to be fully aware of all transactions in real-time. In other words, it means they have more control over tax collecting processes and are capable of making an appropriate response in the event of detection of any illegal figures in tax reports. The benefits for government entities are, therefore, quite obvious – they can significantly reduce fraud and increase tax collection with ease. This particular model has been working perfectly well in Latin American countries for many years.

Respectively, the post-audit model, as you may already know, bypasses tax authorities during business transactions. Therefore, they [tax authorities] can conduct inspections once the deal is made; the documents are initially exchanged only between a buyer and a seller. Though this solution has brought some improvement to how businesses handle their invoicing processes, it does not come close to providing the reliability and efficiency of the clearance model. The latter [the clearance model] brings exactly the same requirements to all companies. That, in return, results in a more balanced business environment – the one that enables equal competition. Using standard formats, however, allows both companies and their respective governments to reduce the amount of administrative work and additional costs as well as provide the much desired legal assurance.

The post-audit model still prevails in Europe, despite the fact that various authorities have been working on introducing digitation of invoices for quite a long time. The positive part is that many of them are now getting to achieve their goal and, as a result, they start issuing regulations that will form the foundations necessary for implementing structured e-invoicing.

What are some relevant announcements of the topic of OpenPEPPOL? What are some issues it is actively solving? How has OpenPEPPOL been perceived from outside the EU and what would be some key-advantages in promoting and supporting its usage on a global level?

Well, as a non-profit organisation that enables a vast network of electronic document exchange services in both the B2G and B2B model, OpenPEPPOL has certainly become an attractive option for those operating globally and seeking opportunities for transparent competitiveness. The network itself is actually one of the biggest initiatives concerning electronic invoicing in the world. The PEPPOL network, as it is commonly referred to, processes standardized, structured electronic documents that are later exchanged via a connection between the so-called Access Points. Considering how fast and reliable it is in terms of document authentication and data transfer, it comes as no surprise that many European countries that are now introducing B2G invoicing obligations are in favour of sending the documents via the PEPPOL network. In other words, the network has become one of the most effective channels for exchanging one’s electronic documents on a global level. It’s also one of the safest as it helps reduce the number of errors or mishaps that could lead to potential business risks.

Aside from the many countries in the European Union that are, or will be part of the PEPPOL network, it is now official that New Zealand and Australia will become its newest members by the end of this year. There are also some rumours about the USA becoming even more involved with PEPPOL and what it can do to enhance its business efficiency. After all, the main objective of this network is to significantly increase the competitiveness among the suppliers; make the market a little more balanced – that’s certainly something that American businesses would consider compelling for sure.

There will definitely be more countries joining the PEPPOL network in the future, just as there will be more technology providers whose solutions will be compliant with the PEPPOL specifications. I would say that, in my personal opinion, the strength PEPPOL lies in the standards that are easy to adopt for all businesses – no matter the size or industry. The possibility to seamlessly convert a document created in a seller’s preferred invoicing format into one that corresponds better with the buyer’s system is extremely appealing. That’s also one of the reasons why Comarch itself has become a PEPPOL Access Point and a provider of solutions that are compliant with the PEPPOL specifications. All of our specialists agree that the network has enormous potential.

What are some countries next on the list to take on B2G e-invoicing, after examples given by the likes of Italy? What can be narrowed down as the most important obligations for these countries?

After Italy, which came out as one of the first countries that decided to make a change to e-invoicing that affected its entire economic system, both the clearance model and mandatory electronic invoicing have become quite a hot topic in Europe. And what you can see right now is that more countries are following in Italy’s footsteps, for example, we’ve been hearing the first signals coming from places such as Greece, which will probably join the e-invoicing movement in 2020.

Among some of the other countries that will, most likely, switch to electronic invoicing in this or next year are Croatia, Portugal, Germany, Vietnam, Argentina, Uruguay, and Sweden. The last one [Sweden] is also an example of a country that will be adopting the PEPPOL regulations for document exchange processes. By and large, considering how things are going right now, we should expect numerous countries announce that they will be introducing e-invoicing obligations in the near future.

What is on the roadmap in 2019 as the next steps for the geographies where PEPPOL has already pierced through, such as Asia, New Zealand, Australia? Is PEPPOL becoming the standard outside Europe?

Even though we can definitely see an increase in the activity regarding PEPPOL among companies from North America and Asia, it’s still a bit too early to say whether it will become a major B2B and B2G data exchange standard there. All I can say is that chances are pretty high. Here, on the other hand, on the old continent, it has already achieved that status in some capacity and now it just keeps improving its range.

PEPPOL’s popularity among the European companies is also the result of the cooperation between the PEPPOL organisation and EESPA (European E-Invoicing Service Providers Association). Seeing how much they were able to achieve in the last couple of years, it seems very likely that PEPPOL will hit markets outside Europe and become a major driving force in the adoption of electronic invoicing there.

As an organisation, PEPPOL is constantly working on new ways of expanding the network. For it could become a truly global standard, however, it still has multiple goals on the horizon that it needs to achieve. It’ll be quite thrilling to see it accomplish them over the next few years. Yet, one thing we can be certain of – living in the midst of the digital revolution, these are some really exciting times for business automation solutions and that includes all the e-invoicing platforms and services out there. So let’s just wait and see.

About Adam Beldzik

Adam is a Director of the E-INVOICING Business Unit. He has more than 17 years of experience in the IT environment. He joined Comarch in 2005, connected with ERP and BI division. Since 2010, he has been managing B2B communication teams (ECM and EDI) in the fields of consulting, product management, R&D, service desk, development and implementation. Mr. Beldzik has supported and managed global projects for clients such as Auchan, T-Mobile, Valeant, BP, BIC, Technicolor, Carrefour and Rossmann.

About Comarch E-Invoicing

Comarch E-Invoicing is one of the Comarch brands, which provides cutting-edge technology, allowing the enterprises to automate the supply chain and invoicing processes. A comprehensive approach to both internal and external cloud-based collaboration with all partners (suppliers, customers, logistics operators and service providers), including the exchange of product, merchandising, analitical, logistic and financial data, delivers the best results. Consequently, companies are provided with fast and secure access to reliable data, optimisation of processes with Robotic Process Automation, and lower document handling costs.