The impact of Covid-19, it seems, is finally being felt in the world of electronic data exchange. In particular, Covid-19 has already impacted the implementation of regulations relating to e-Invoicing. While many countries continue to work at full speed on the implementation of EN 16931 and other regulations worldwide, legislation is being postponed in some countries, such as Hungary, due to the Corona crisis.
This article is intended to clarify the current situation, to show the effects of Covid-19 on EDI and e-invoicing, and to serve as an overview of international regulations. For our view on the future of EDI as a whole, please see our blog post on this subject here.
Does the economic slump in various industries, combined with lower investment, have a direct impact on electronic data exchange?
In short, no. There should be no long-term effects. In fact it is fair to say that increased automation has helped many businesses to survive the recent pandemic and that EDI is a crucial cog in business continuity management.
It is certainly true that many companies are currently postponing investments and that the overall number of EDI messages being sent is declining due to the reduction in procurement and sales. However, the trend towards electronic and automated message exchange is an “organic shift” and not a short-term fad. Both private and public institutions are aware of the advantages of EDI in terms of efficiency and cost structure, and can implement them, in and without times of crisis.
What are the particular advantages of EDI and e-invoicing at the moment and where do you have to expect restrictions?
Basically, EDI helps supply chain businesses to optimise key processes, such as purchasing, sales and production. Sales orders can be processed more quickly because data can be automatically transferred to the target system. Media breaks are eliminated, reducing communication difficulties and related time and cost expenditures. With home quarantine in place, IT teams and supply chain staff can also monitor EDI message processes remotely and extract the desired information. However, this is only possible with cloud-based EDI services. By contrast, on-premise EDI solutions face many difficulties.
How can e-invoicing help my company when it comes to payment deadlines?
In order to secure their liquidity in the short term, companies can sell receivables to their customers for deliveries to intermediaries (so-called factoring). However, this often requires electronic invoicing. If companies are not able to exchange e-invoices, this important financing option is not available.
What influence does the Corona crisis have on the implementation of EN 16931? Will countries still implement their planned legislation?
Most likely, yes. XRechnung in Germany in particular is currently in the final stages of legal finalisation and moving forward as planned. Many countries have already specified concrete dates and passed laws, whilst others are in the middle of the final drafting of legislation (details on the individual federal states can be found here). Other countries have postponed mandatory B2G e-Invoicing by a few weeks or months. However, it is extremely unlikely that laws will be suspended indefinitely or revoked entirely.
What exactly is happening?
Which countries have postponed, changed and other new ambitions for e-invoicing?
The mandatory use of version 2.0 of the XML schema of the Hungarian online invoicing system as of 1 April 2020 was effectively postponed to 1 July 2020 (Online Számla Hungary).
The introduction of mandatory e-invoicing in the B2G sector for SMEs is postponed to 1 January 2021 for large companies, 1 July 2021 for SMEs and 1 January 2022 for micro-enterprises (statement by the Portuguese government).
The MyDATA law on e-billing was postponed to June 2020 (SOVOS).
In France, the law concerning B2G electronic invoicing is already in force for all federal levels. A corresponding counterpart for the B2B sector in 2023 is already being prepared, with initial details expected in September 2020 (VATupdate).
The Italian tax authority has published a law that lays down new specifications for electronic invoicing with the SDI interface to be used (Sistema de Interscambio). These new requirements will replace the current ones from 1 October 2020. The current version can now be used until 31 November 2020 (Agenzia delle Entrate).
Following the law on electronic tax reporting (July 2020), Poland is planning the next step. In 2022 a central e-invoice system for the exchange of B2G and B2B invoices is to be introduced (Ministry of Finance Poland).
The legal obligation for e-invoicing is postponed from 1 November 2020 to 1 July 2022 (Avalara).
Note: Due to the current situation, further changes to the individual authorities and laws at short notice cannot be ruled out. If you have specific questions about e-invoicing and EDI, please do not hesitate to contact us.