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Order2Cash Newsletter - Issue 1 2017
Welcome to the first Order2Cash newsletter of 2017. All of us at Order2Cash would like to wish you all a very healthy and prosperous year ahead.
2017 promises to be a very interesting year, particularly in the world of e-Invoicing as many European countries, like The Netherlands and France, begin to adopt mandatory e-Invoicing across the public sector and beyond. This issue contains some of the latest news in this area but if there's a particular Order2Cash related topic you'd like us to comment on, please let us know. You can send your suggestions to us by mailing marketing@order2cash.com
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France and the Netherlands implement mandatory public sector e-Invoicing
As of January 1st 2017, all large French companies are now required, by law, to send electronic invoices to all public sector organizations through a single technical hub called Chorus Pro.
Also, in The Netherlands, all new contracts undertaken with the Dutch Government must now be invoiced electronically. There, Simplerinvoicing has been selected as the obligatory invoice delivery channel.
Read more about these new developments in our extended article.
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Finland develops new ISO standard to aid real-time VAT reporting
Under the headline 'New weapon against the shadow economy - tax authorities to receive VAT information in real time', Tieto and the Federation of Finnish Financial Services have presented an initiative on digitalized value-added tax (VAT) reporting.
The new ISO 20022 standard devised and developed by Tieto and the Federation of Finnish Financial Services will help to enable the real-time value added tax (VAT) reporting. The standard allows the necessary information in each invoice to be reported to the tax authorities in digital form. Adopting this new uniform standard across Europe could potentially increase tax revenues by up to EUR 160 billion through the collection of currently unreported VAT.
Both Tieto and the Federation of Finnish Financial Services hope for fast and extensive adoption of the standard by the tax authorities, public sector and companies, so that its benefits can be claimed as quickly as possible. The standard is available free of charge on the ISO 20022 website (https://www.iso20022.
You can also claim a copy of the ISO 20022 for Dummies book here.
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A lack of uniform standards and adoption strategy continue to impede invoice and payment automation in the US
An interesting article recently published by Todd Albers, a senior payments consultant at the Federal Reserve Bank of Minneapolis, makes the point that the lack of a uniform standards or adoption strategy continues to impede invoice and payments automation, relative to Europe. To help address this, the Federal Reserve has recently convened a new work group under the Business Payments Coalition focused on increasing e-Invoice adoption in the U.S. It will be interesting to monitor their progress.
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Latin America continues to lead the way
Billentis reports that the Latin American region continues to be a global leader in terms of the market adoption rate for e-Invoicing. The Mexican association AMEXIPAC recently published the report “Estudio comparativo de Factura Electrónica en Latinoamérica”, which includes a comparison of Latin American countries and also takes a look at Portugal. the report mentions that;
"By the end of 2015, more than 26.5 million tax payers in the twelve countries under analysis were affected by the requirement to issue invoices and other related documents in an electronic format. In 2015, more than 12.4 billion e-facturas were issued, the highest volumes being in Mexico, followed by Brazil, Ecuador and Argentina."
In the majority of the countries studied, invoice data is validated in real time by the tax authorities.
Billentis concludes and predicts that:
- All tax related documents may only be exchanged electronically in the future: invoices, simplified invoices (receipts issued at the point of sale), credit/debit notes, monthly salary statements, etc.
- Once the system is up and running in the domestic context, import and export transactions will also have to be reported electronically; Latin American countries are losing no time in pushing for negotiations with other relevant countries in order to collaborate on this issue.
- Electronic reporting will, in the future, not only affect documents in the financial supply chain. It will also consider documents of the physical supply chain (inventory, transport of goods, etc.).
- VAT declaration/reclaim will, in the long run, no longer be necessary, as the tax authorities will obtain all the information to settle this automatically complete tax/VAT automation.
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