Exploring the evolving landscape of e-invoicing in Europe: Takeaways for tax professionals
The European e-invoicing market is on the brink of a major transformation, driven by mandatory e-invoicing and e-reporting regulations emerging across the EU. This shift, spurred by the need to improve VAT revenue collection and fueled by initiatives like the EU’s VAT in the Digital Age (ViDA), presents both challenges and opportunities for businesses.
This blog post examines the IDC MarketScape: European Compliant e-Invoicing 2024 Vendor Assessment, distilling key insights and practical takeaways specifically for corporate tax professionals.
Methodology: The IDC MarketScape report structured discussions, surveys, and interviews with market leaders, participants, and end-users to evaluate e-invoicing vendors. The analysis looks at vendor skills and plans, thinking about how they match with current and future customer needs.
The e-invoicing landscape: Key trends according to the IDC MarketScape
- Diverse business-to-business e-invoicing mandates across countries. The regional e-invoicing landscape is becoming increasingly complex as different countries adopt their own standards and regulations. While PEPPOL was expected to emerge as a unified standard in Europe, this has not materialised. Italy leads the way in Europe, having already implemented mandatory B2B e-invoicing. Countries such as Germany, France, Poland, and Romania are also advanced in their e-invoicing journeys, and other countries are also making their own regulations.
- Expansion beyond e-invoicing. E–invoicing is evolving beyond the traditional scope of invoice management. Governments are increasingly leveraging e-invoicing infrastructure for broader purposes, including real-time industry operations and intelligence, and potentially even GDP calculations.
- E-invoicing as a driver for process automation. While compliance is a primary driver for e-invoicing adoption, companies are increasingly recognising the potential for additional benefits, including process automation and efficiency gains.
- Consolidation of e-invoicing systems for consistency. With many organisations operating in multiple jurisdictions, the need for consistent and efficient e-invoicing systems is becoming increasingly important.
- AI and generative AI enhancements. Artificial intelligence, particularly generative AI (GenAI), is set to play an increasingly prominent role in e-invoicing solutions. These technologies offer significant potential for improving data extraction and mapping, error handling, and data validation processes.
Essential strategic guidance for businesses
- Start early and stay informed. Organisations must proactively monitor upcoming regulatory changes and ensure they’re well-informed about changes that could impact e-invoicing processes. Early preparation is key — begin by examining current systems to identify adjustments needed to comply with new mandates.
- Align e-invoicing with business goals. Clearly defining e-invoicing requirements in line with broader business objectives and regulatory mandates is essential. Alongside gaining internal stakeholder buy-in, it is imperative to assess whether there is suitable in-house expertise to manage the implementation or if external service providers are needed.
- Adopt a global strategy for e-invoicing. Organisations operating internationally should consider combining e-invoicing efforts with a single partner capable of delivering a global solution. This approach can simplify compliance management across different countries by using a unified template, a single dataset, and a consistent user experience.
- Broaden the scope to include finance process improvement. E-invoicing should be considered part of a larger strategy to boost process automation and efficiency. Look beyond compliance to explore opportunities for automating tax processes, invoice handling, audit readiness, and other finance workflows.
- Ensure companywide integration and user adoption. An e-invoicing solution should serve the finance function and integrate seamlessly with the rest of the organization. To facilitate digitalisation, create a single way for business users and finance to talk. This will make it easier for them to communicate with each other and manage responses.
- Thoroughly evaluate vendors. When selecting a vendor, challenge them with real-world scenarios to assess their capabilities. Request a demo that is not pre-prepared by the vendor to see how they perform under pressure.
- Ensure ongoing support and communication. Establish a clear plan for ongoing support, both regulatory and technical, from the vendor. Regular interactions with vendors can help maintain alignment, address issues promptly, and ensure the solution continues to meet evolving needs.
Pagero: A leader in the European-compliant e-invoicing market
The report positions Pagero, part of Thomson Reuters, as a leader in the European-compliant e-invoicing market. Pagero was recognised for the following strengths:
- The network. The Pagero Network is a huge boon for the vendor. With access to more than 14 million businesses and connectivity to over 100 other networks, hubs, and government platforms, the wide reach of the Pagero network offers considerable potential for customers regarding compliance connectivity. This connectivity is enhanced by Pagero’s application-agnostic approach to its network, ensuring its broad reach is accessible to those who have not invested in Pagero’s other offerings.
- Trusted advisor. Pagero’s strong connections to industry bodies and regulators, along with its team of in-house regulatory experts, bolster its knowledge and understanding of e-invoicing regulations and mandates as they arise, putting the vendor in a very strong position in the customer’s mind.
When to consider ONESOURCE Pagero
Consider ONESOURCE Pagero if you are looking for an e-invoicing, compliance, and automation solution that incorporates a large network reach, broad global compliance, digitalisation, and process automation capabilities, and through which you can tap into a robust advisor that can provide clear insights into changes in the market and is playing a role in shaping those changes.
Learn more about ONESOURCE Pagero.
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