Brief on the new European standard for an e-Invoice prepared by CEN/TC 434

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Brief on the new European standard for an e-Invoice prepared by CEN/TC 434

By Charles Bryant, Secretary General EESPA

EESPA members and the Secretariat have been actively engaged in CEN/TC 434 and this briefing provides an up to date picture of what is happening

Background: The new standard (or European Norm- EN) is the subject of EU Directive 2014/55/EU, whose objectives are to encourage e-invoicing in the public sector and to create adoption effects across the European economy, as part of the Single Market and Digital agendas. See the background in the paper referenced here [1].

The Directive applies to electronic invoices issued as a result of the performance of contracts arising from public procurement according to its detailed provisions. In relation to these transactions, a public administration is obliged to accept and process electronic invoices from its suppliers that comply with a new European standard for e-invoicing, and is reflected in one of the nominated syntaxes.  For the purposes of the Directive, ‘electronic invoice’ means an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing. Public administrations accepting such electronic invoices, and processing the electronic invoice in whatever manner they decide, will be compliant.  Member States will need to put in place measures, transposition etc., to implement the requirements of the Directive in the period 2018 onwards.

In order to create the new European standard, the Commission has requested CEN, the European standardisation organisation, to draft the standard for the semantic data model of the core elements of an electronic invoice and prepare its supporting elements including syntax, transmission guidelines, extensions and implementation guidance. ‘Semantic data model’ means a structured and logically interrelated set of terms and their meanings that specify the core elements of an electronic invoice. This work is nearing completion and, based on a series of unanimous votes by national communities, CEN has already approved the semantic model, the eligible syntaxes and methodology, the Extension Methodology and Transmission Guidelines. The Commission is evaluating.  During 2017, users will be able to start work on implementation. The standard is also designed for use in B2B standards.

Key features of the standard

The CEN Technical Committee based its work on a Standardization Request issued by the European Commission and has brought together standards experts over a two year period.

It is based on pre-existing standards, such as CEN BII used in PEPPOL, UBL, UN/CEFACT and EDIFACT rather then re-inventing the wheel. It supports a large number of business processes and use cases. It can be mapped into and out of other common standards and the data models embedded in most service provider platforms.

It has an elegant architecture as it contains a semantic model for the core information elements of an e-invoice i.e. the terms and business meanings used in an invoice. The data model is independent of the technical language in which it is expressed.

The two nominated syntaxes for which syntax bindings will be provided are UBL and UN/CEFACT. Syntax bindings will also be provided for EDIFACT. There will continue to be a flourishing format conversion requirement, albeit based on consistent semantic terms.

The EN supports fully the EU VAT regime in all its aspects: various VAT rates, exempt and zero-rate transactions. It even can be adapted for certain VAT-like taxes in Member States. The invoice will support the various recognized methods for demonstrating authenticity and integrity such as digital signatures, EDI and Business Controls.

It will be possible to create Extensions to the core invoice to meet specific industry or country needs. Whilst this is a requirement for justified needs, there is a danger of proliferation. A registration and monitoring process is under review.

Given the variety of information elements available, the Core Invoice Usage Specification has been developed allowing buyers to indicate how they wish suppliers to use the information elements and any restrictions on their use. The classic usage here will be for purchase order, contract and other procurement references.

The e-Invoice is designed to be fully integrated into the financial supply chain with backwards compatibility to procurement and forward compatibility with the payment process. A separate industry group is working on a family of Invoice Response and Status messages.

Validation tools are being created, although many service providers will wish to develop their own versions.

Why the European Norm (EN) is important

For some, the arrival of ‘yet another standard’ is of limited significance. It will just be absorbed into the mainstream and need to prove itself alongside others.

Its mandatory quality across the EU public sector is significant, however. Although it is a ‘soft’ mandate- public sector buyers must be able to receive, but suppliers are not (yet) obliged to send- buyers are free within the Directive to take specific steps at Member State level to mandate it.

Any service provider operating on a European scale will likely need to implement the EN and demonstrate excellence in its deployment and use. All Member State will implement it (the UK position will no doubt be clarified). Suppliers will implement it gradually. It will find its way into B2B. There is even talk of a consumer invoice based on relevant elements of the EN. PEPPOL will implement it as momentum is established. Local standards are likely to converge in the direction of the EN. It is likely to go global, once proven.

The role of service providers whilst not guaranteed, is likely to be encouraged by a standard that needs active management, that will use facilities like format conversion, current transmission models, and compliance checking, and that is not a step into the unknown. It opens a huge new market in the public sector and its supply chains.

Charles Bryant- Secretary General EESPA

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[1] See Paper: The adoption of e-invoicing in public procurement: Guidance for EU public administrations, available on under Industry Papers.