Italy Makes E-Invoicing Mandatory

The government of Italy began requiring business-to-government electronic invoicing in 2014. Last year it expanded that policy to include B2B e-invoicing for specific sectors such as the petroleum sales industry. At the same time, Italy passed laws mandating that all B2B invoices must be electronic by 2019. The change, which is now in effect, applies to all businesses registered in Italy.

E-Invoicing Across Europe

Italy is the first EU member to legislate B2B e-invoicing. But European Union member states have been taking advantage of electronic invoicing for some time. That’s because e-invoicing makes cross-border commerce easier and more standardized throughout the entire EU. For more than a decade, Sweden has required e-invoices for its central government agencies. This year Sweden is expected to require e-invoicing within the public sector, as well. In France, e-invoicing has been required for large companies since 2017, and for mid-sized companies since last year. All other companies will be required to make the transition in 2019. Poland is developing an e-invoicing platform, and Ireland, the UK, and Germany all have plans to implement varying degrees of e-invoicing.

U.S. Government Agencies

Several years ago, the United States Office of Management and Budget also issued a directive asking agencies under its authority to use electronic invoices. The Treasury Department wanted the government to use a secure digital invoice and payment processing platform, because its research showed that it would save time, labor, and money. While it is still essentially a pilot program, mandatory e-invoicing within U.S. government agencies does appear to be on the near horizon.

Why Italy Made the Change

Italy made the shift to e-invoices to gain benefits not possible with conventional invoicing. Paper invoicing is slower, more cumbersome, and more expensive. It requires repeated manual input and manipulation, which results in greater opportunity for human error and fraud. Paper invoices have to be physically copied and securely archived. Time and labor-intensive processes are repeated whenever invoices are shared between decision makers, departments, offices, accountants, banks, tax planners, and others.

The E-Solution

E-invoicing, on the other hand, eliminates those cumbersome steps and procedures. It dramatically accelerates payment processing to shrink the revenue cycle timeline. Searches for invoice records are practically instantaneous. Reconciliation is faster and more reliable, and e-invoicing facilitates quicker and easer audits and analysis – including financial projections and sales reports. A study published in 2017 by Billentis found that transitioning to e-invoicing typically results in overall cost savings of 60 to 80 percent. That’s because of cost reductions throughout the billing and collection cycle.