Within the first four months of 2019 central Government public bodies need to be able to receive and process eInvoices in accordance with the European Directive 2014/55/EU and the national eInvoicing approach. eInvoicing is now at the centre of digital transformation in public procurement across Europe. Declan McCormack, eInvoicing Ireland Programme Manager, writes.
Changing to eInvoicing
It is crucial for public bodies to plan for compliance and to look at the potential to reap the wider benefits of eInvoicing. Public bodies should start by understanding the requirements of the Directive and identifying the areas of their organisation that might be impacted by the change to eInvoicing such as the Accounting and Finance, ICT and Procurement teams.
An initial analysis of the existing invoice processing environment in terms of system capabilities, invoice volumes and supplier profiles should then be undertaken. The Pareto principle applies, with 20 per cent of suppliers often accounting for nearly 80 per cent of invoice volumes. This knowledge can help to identify the business case for eInvoicing and when preparing an eInvoicing strategy that targets the most effective cost/benefit goals. eInvoicing enables us join up the data and so it is important to consider invoice processing within the wider end-to-end procure-to-pay lifecycle. Identify the information needed in an invoice, for example the purchase order, which can provide the links between pre and post-award procurement processes. The current level of automation in public purchasing procedures will be a key factor in devising a joined up but modular approach to drive the implementation of eInvoicing.
While technology can deliver solutions, it is people that effect change. Engagement with the relevant senior management should be undertaken with a view to gaining support and developing a project plan. For public bodies who are part of a shared services or co-ordinating body facilities analysis and planning should be undertaken with the project managers from the shared services/ co-ordinating body facilities. eInvoicing Ireland has produced a worksheet as a prompt for public bodies to start considering these different stages and developing a plan, in advance of accessing the relevant services and solutions for implementation when the time comes.
The European Directive
The Directive sets out that contracting authorities and contracting entities must receive and process electronic invoices that comply with the European Standard (EN-16931) for eInvoicing (the EN). The EN at a basic level is a data model and defines the information, structure and format of compliant eInvoices. Compliant eInvoices can be formatted in one of two listed XML formats. Ireland has chosen the PEPPOL (Pan European Public Procurement Online) network as the eDelivery network through which EN compliant eInvoices should be delivered to public bodies. The PEPPOL network allows businesses to connect once and connect to all public administrations and business in Ireland and Europe on the network. The standardisation of eInvoice processing means that the longer-term benefits of eInvoicing can be realised and it supports the reduction of potential barriers to trade across Europe.
It is intended that the transposition of the eInvoicing Directive into Irish legislation, expected in advance of April 2019, will include an option for sub-central contracting authorities and contracting entities to postpone the compliance deadline until April 2020. Individual public bodies will need to determine whether the central or sub-central deadline applies to them, in regard to the eInvoicing Directive.
Public sector goals for eInvoicing
from the European Commission’s the Connect Europe Facility (CEF) eInvoicing Building Block Achieving compliance, reducing costs and creating new efficiencies and value are all potential goals that Member States can target as part of their business case for eInvoicing. While compliance requires only a minimalist strategy (i.e. a focus on the capability to receive as opposed to automatically process), it is recognised that the potential for cost savings and adding new value increases with the level of automation and adoption of eInvoicing that national policy and strategies target and deliver.
“End-to-end e-procurement is not about implementing an IT project which would just replicate paper-based processes; it is an opportunity to fundamentally re-think the way public administration is organised. End-to-end e-procurement is therefore a key enabler of the above priorities, and can contribute to the sustainable growth objectives of the EU 2020 Strategy.”
European Commission (2013) Communication 453 End-to-end e-procurement to modernise public administration.
About the Connecting Europe Facility (CEF) eInvoicing Building Block
To reduce the number of eInvoicing standards hampering cross-border economic activity in Europe, EU Member States and the European Parliament approved Directive 2014/55/EU (on electronic invoicing in public procurement) and the creation of a single European eInvoicing standard.
The European Commission and EU Member States are therefore supporting the adoption of eInvoicing respecting the European standard for eInvoicing through the Connecting Europe Facility (CEF) eInvoicing Building Block, as well as grant funding.
Materials and supports available from eInvoicing Ireland
• Public Body Factsheets
• Supplier Factsheets
• eInvoicing Ireland FAQs
• Preparation worksheets for Public Bodies
• Information Note on the timeline for compliance with the European Directive on eInvoicing (2014/55/EU)
• eInvoicing Ireland presentations
In order to become compliant public bodies, in many cases, directly or through shared services and co-ordinating body facilities, will have to engage with eInvoicing service providers to access the services and solutions they need to become compliant with the Directive. For more information on the procurement of these services visit: www.ogp.gov.ie/eInvoicing
Please note there is no requirement on suppliers to send eInvoices at this time.
The eInvoicing Directive has created a real stimulus for suppliers and buyers in public procurement across Europe to move forward together and improve how businesses transact with the public sector in Ireland and Europe.
The national approach will facilitate and enable the public sector as a whole in adoption of eInvoicing in a consistent and interoperable way that is based on European standards.
eInvoicing Ireland has been developing an eInvoicing community across Government, to be included in the updates or for further information please contact:
The eInvoicing Ireland team at eInvoicing@ogp.gov.ie
About eInvoicing Ireland:
eInvoicing Ireland is a programme based in the Office of Government Procurement (OGP) and is responsible for facilitating public bodies in becoming compliant with the European Directive on eInvoicing (2014/55/EU) by April 2019. eInvoicing Ireland is supporting compliance with the Directive by promoting eInvoicing Awareness, Understanding and Action. eInvoicing Ireland is providing a wide range of materials and information tools for the various stakeholders including public bodies, suppliers and service providers.