Billentis Peppol May 2024

About eInvoicing and Peppol
The global e-invoicing and tax

compliance report:
Watch the tornado!
billentis, April 2024

The global e-invoicing and tax compliance report: Watch the tornado! Sponsor
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April 2024 2
Table of contents
0. Executive Summary ........................................................................................................................ 5
1. Introduction ...................................................................................................................................... 6
1.1 The purpose of the Report ................................................................................................................... 6
1.2 Methodology ............................................................................................................................................... 6
2. Market Characteristics ................................................................................................................. 8

2.1 E-invoicing and Beyond – Terms and Definitions........................................................................ 8
2.1.1 Definition of E-invoicing ........................................................................................................ 8
2.1.2 From Tickets to Core Invoices .......................................................................................... 9
2.1.3 E-invoicing versus E-reporting .......................................................................................... 11
2.1.4 From E-invoicing to Integrated Digital Trade ............................................................. 11
2.1.5 How Tax Authorities Drive Integrated Digital Trade ..............................................13
2.2 Tax Driven Continous Transaction Control Models (CTC).................................................... 14
2.2.1 Tax Gap as Main Accelerator for Digital Reporting Requirements .................. 14
2.2.2 From Periodic to Continous Transaction Controls ................................................. 17
2.2.3 Real-time Reporting Model............................................................................................... 18
2.2.4 Clearance Model ................................................................................................................... 19
2.2.5 Centralised Exchange Model ........................................................................................... 19
2.2.6 Decentralised CTC and Exchange Model (5 corner) ............................................ 20
2.3 Private Exchange Models ..................................................................................................................... 21
2.3.1 2 Corner Model (Buyer or Supplier direct/EDI) ......................................................22
2.3.2 3 Corner Model (network) ............................................................................................... 23
2.3.3 4 Corner Model (Interoperability) .................................................................................24
2.3.4 Consumer Driven E-invoicing Models ..........................................................................24
2.4 Supporting Associations and Initiatives ....................................................................................... 25
2.4.1 Global E-invoicing Associations ..................................................................................... 25
2.4.2 E-invoicing Initiatives ........................................................................................................... 27
2.5 The Global Dissemination of Data Format Standards ........................................................... 28
3. Market Development and Drivers: Watch the Tornado!...................................................... 31

3.1 Watch the Tornado! ................................................................................................................................ 31
3.2 Invoice Finance as Key Accelerator of Supply Chain Finance............................................. 33
3.2.1 Receivables/Invoice Discounting................................................................................... 35
3.2.2 Receivables Factoring ........................................................................................................ 35
3.2.3 Early Payments/Dynamic Discounting ....................................................................... 36
3.2.4 Payables Finance ................................................................................................................... 37
3.3 How New Payment Solutions and E-invoicing are Combatting the Late Payment
Epidemic ..................................................................................................................................................... 37
3.3.1 Reasons for Late Payments of B2B and B2G Invoices.......................................... 37
3.3.2 E-invoicing and Regulatory Initiatives to Overcome Late Payments ............. 38
3.3.3 Dynamic Market Developments in Payments Create New Opportunities . 39
3.3.4 Payment Solutions for New Players that Integrate Digital Payments with the
E-invoicing Process ............................................................................................................... 41
3.4 E-procurement Rapidly Evolving into a Crucial Facet of Integrated Digital Trade ....42
3.5 VAT and Sales Tax Automation and Filing Inches Towards Integration with E-invoicing
Systems ...................................................................................................................................................... 44
3.6 Emerging Technologies like Artificial Intelligence are Changing the Market ................45
3.6.1 The Search for New Technologies Supporting Business Automation ...........45
3.6.2 Terms and Definitions for Artificial Intelligence.......................................................45
3.6.3 The Role of Artificial Intelligence within the E-invoicing Process ..................... 47
3.6.4 Blockchain: Integrating Conventional and Decentralised Financial Systems
...................................................................................................................................................... 48
3.7 Organisations Boost Environmental, Social and Governance (ESG) Performance
April 2024 3
through Strategic E-invoicing Transition .................................................................................... 48
4. The Global Market ......................................................................................................................... 53

4.1 Invoices and Electronic Invoice Penetration in 2024 ............................................................. 53
4.1.1 Total Volume of Bills and Invoices ................................................................................. 53
4.1.2 Maturity and State of Play of Electronic Invoices .................................................. 53
4.1.3 Regions Diverge in Focus: Tax Optimization and Trade Automation Trends
Vary Globally .......................................................................................................................... 55
4.2 Global Progress in the Adoption of Electronic Invoices and Receipts ............................ 56
4.2.1 Africa ......................................................................................................................................... 56
4.2.2 The Asia and Pacific Region ............................................................................................. 56
4.2.3 North America ....................................................................................................................... 58
4.2.4 Latin America......................................................................................................................... 59
4.2.5 Europe ...................................................................................................................................... 60
4.3 Market Predictions for 2024-2028 ............................................................................................... 62
4.3.1 Expected E-invoice Volume Growth ............................................................................ 62
4.3.2 Increasing Value of the E-invoicing Market............................................................... 63
5. Successful Implementation of E-invoicing and Integrated Digital Trade Projects ...... 65

5.1 Holistic Assessment of Existing Prerequisites.......................................................................... 65
5.1.1 Asses your Internal Organizational and Technical Landscape ......................... 65
5.1.2 Digital Collaboration with Trading Partners............................................................. 66
5.1.3 Legislation and Compliance.............................................................................................. 67
5.2 Impact of Third-Party Solution Offerings and related Technology Trends .................. 68
5.3 Comprehensive Strategy Encompassing Entire Scope of Objectives............................ 69
5.3.1 Internal Objectives .............................................................................................................. 69
5.3.2 Improve Digital Collaboration with Trading Partners .......................................... 70
5.3.3 Ensure Tax Compliance..................................................................................................... 70
5.4 Implementation, Migration and Onboarding ................................................................................ 71
5.4.1 Scenario for Gradual Internal Implementation ......................................................... 71
5.4.2 Determine the Best Scope for your Organisation ................................................... 71
5.4.3 Stricter Internal Data Accuracy Mandated to Meet Tax Obligations............. 73
5.4.4 Designing and Implementing Agile Systems and Processes for Enhanced
Efficiency................................................................................................................................... 75
5.4.5 Initiatives to Boost the Adoption of Electronic Invoicing ..................................... 75
5.5 Overcoming Potential Barriers: Strategies for Success ....................................................... 78
5.6 Success Factors ..................................................................................................................................... 80
5.7 Benefits and Business Case .............................................................................................................. 80
5.8 Shifting Strategies: Moving from Reactive to Proactive ........................................................ 81
6. Service Providers in an Ambigious Market Environment ...................................................82

6.1 A Challenging Path to Reach the Promised Land .................................................................... 82
6.2 Navigating the Tornado: The Urgent Crusade for Innovative Service Providers amid
Regulatory Upheavals .......................................................................................................................... 82
6.3 The Expected Transformation of the Service Provider Landscape ................................. 85
6.4 Consolidation Ahead: Navigating the Evolving Landscape of E-invoicing and the
Emerging Opportunities for Service Providers ........................................................................ 86
7. OpenPeppol..................................................................................................................................... 87
8. Appendix ........................................................................................................................................100
8.1 Glossary ................................................................................................................................................... 100
8.2 Sources ...................................................................................................................................................... 101
April 2024 4
0. Executive Summary
‘The global e-invoicing and tax compliance report: Watch the tornado!’ provides a comprehen-
sive analysis of the current landscape and future outlook of electronic invoicing and related
digital trade practices. Authored by pioneers Marcus Laube and Bruno Koch, this edition
delves deeply into the shifts and innovations shaping this space, driven significantly by ad-
vancements in technology and regulatory requirements, with the global volume of invoices
processed electronically poised to increase dramatically. It is within this context that we have
titled our report ‘Watch the Tornado,’ highlighting the necessity for both users and solution
providers to stay informed and prepared for these evolving trends and findings:
+ Market Growth: The e-invoicing market is expected to see substantial growth, with
projections indicating a surge in both adoption rates and market value driven by the
need for greater compliance and efficiency in business transactions. As of 2024, the
market anticipates handling approximately 560 billion invoices annually. Presently,
around 125 billion of these invoices are transmitted electronically. The current market
value stands at $ 8.9 billion and is projected to ascend to approximately $ 23.7 billion
by 2028.
+ Regulatory Impact: Tax authorities globally are increasingly adopting electronic in-
voicing as a strategic measure to combat tax evasion. Many are implementing Contin-
uous Transaction Control (CTC) models that facilitate real-time or near-real-time
transaction processing and auditing. Initiatives such as 'VAT in the Digital Age' (ViDA)
in Europe, along with the widespread adoption of Peppol specifications in Asia, suggest
a growing preference for four and five corner models, with the latter to enhance com-
pliance and operational efficiency simultaneously. These implementations are fre-
quently coupled with B2B mandates that require electronic invoicing. Looking ahead, it
is likely that these requirements will expand to include additional business documents
and Environmental, Social, and Governance (ESG) criteria.
+ Integrated Digital Trade (IDT): Beyond electronic invoicing, the shift toward Inte-
grated Digital Trade (IDT) represents a comprehensive strategy for automating both
business transactions and financial operations. This movement is bolstered by govern-
mental policies that mandate the incorporation of additional business documents and
encompass processes such as payment, invoice financing, electronic procurement,
and tax automation. The approach to adopting IDT varies based on distinct value
propositions and differs significantly between small and medium-sized enterprises
(SMEs) and large corporations. While SMEs may focus more on integrating financial
processes and tend to respond primarily to imminent regulatory mandates, large en-
terprises are likely to initiate projects proactively with an emphasis on automating
supply chain processes.
+ Technology Integration: Emerging technologies such as Artificial Intelligence (AI)

are increasingly integrated with e-invoicing systems, offering new efficiencies and ca-
pabilities. Leverage AI and blockchain to not only comply with regulatory frameworks
but also to gain a competitive edge through improved transactional accuracy and se-
curity.
The e-invoicing landscape is rapidly evolving, underscored by technological advancements and

significant regulatory changes. Organizations that adapt quickly to these changes, leveraging
new technologies and models, will benefit from increased efficiency, compliance, and competi-
tiveness in the global market. This report serves as a vital tool for understanding and navi-
gating the complexities of e-invoicing and Integrated Digital Trade as they become standard
practices worldwide.
April 2024 5
1. Introduction
1.1 The purpose of the Report
Bruno Koch and Marcus Laube are dis-
tinguished pioneers in the realm of elec-
tronic invoicing from its inception. Since
1999, Bruno Koch has evolved billentis
into the premier global consultancy
specializing in electronic invoicing and
tax compliance, authoring all preceding
reports for the organization. Concur-
rently, Marcus Laube has established
and overseen a variety of internationally
operating service providers, in addition
to leading pivotal industry associations.
Both have contributed their expertise
to numerous e-invoicing committees,
including those affiliated with the European Commission. Marcus Laube has recently assumed
ownership of billentis, with Bruno Koch continuing to contribute to the production of this re-
port.
Motivated by favourable market reception, we are pleased to announce the release of the lat-
est edition of our report on electronic invoicing and tax compliance. Since our previous publi-
cation in 2019, there has been a significant shift in the market landscape. The demand for tax
compliance has accelerated the transition towards universal electronic invoicing, a develop-
ment expected to occur in the near term. Furthermore, the range of solutions is expanding
beyond electronic invoicing to encompass Integrated Digital Trade, encapsulating the entire
spectrum of transactions between buyers and sellers. This progression is increasingly influ-
enced by emerging technologies, notably Artificial Intelligence, alongside growing considera-
tions for Environmental, Social, and Governance (ESG) factors. While initially predominant in
Latin America and Europe, this trend is now gaining momentum across Asia, Oceania, and Af-
rica.
As the industry moves towards universal electronic invoicing, many organizations continue to
search for solutions tailored to their unique needs within a market burgeoning with service
providers and solutions. It is within this context that we have titled our report ‘Watch the Tor-
nado,’ highlighting the necessity for both users and providers to stay informed and prepared
for these evolving trends. In this critical phase, accessing current information and guidance
for selecting the most suitable solution and service provider is paramount.
1.2 Methodology
The authors possess extensive experience in the e-invoicing sector since 1997, pioneering two
of the initial cloud-based e-billing and e-invoicing services in Europe and managing leading in-
dustry associations. They have served as independent consultants crafting business strate-
gies, Requests for Proposals (RFPs), system assessments, and numerous technical and mar-
keting plans for major invoice issuers and recipients, government entities, integrators, and so-
lution and service providers. Throughout this period, they have continuously gathered critical
data on pertinent markets, regularly disseminating their findings in industry reports.
The report draws on a comprehensive base of sources, including:
+ Data from public domains, meticulously compiled from thousands of resources over
the years and refined for accuracy.
+ Precise official statistics, especially from countries with advanced electronic invoic-
ing and tax reporting frameworks.
+ Country and sector-specific surveys.
April 2024 6
+ Data from significant invoice issuers and recipients across various sectors like tele-
communications, utilities, financial services, public sector, healthcare, and retail, ob-
tained from online publications or corporate responsibility and Environmental, So-
cial, and Governance (ESG) reports.
+ Information from leading service providers and aggregated industry association
data.
+ Market research conducted by external parties, representing insights from over
20,000 enterprises and 15,000 consumers.
+ Verification of critical data through customer/provider confirmations and analysis of
numerous corporate responsibility reports, often validating the share of paperless
billing and invoicing.
+ Extensive interviews with regional specialists.
+ Direct insights from over 200 client consulting engagements across more than 50
countries.
+ An amalgamation of the aforementioned data sources.
April 2024 7
2. Market Characteristics
2.1 E-invoicing and Beyond – Terms and Definitions
2.1.1 Definition of E-invoicing
The term ‘e-invoice’ is used within the Business-to-Business (B2B) and Business-to-Govern-
ment (B2G/G2B) contexts, specifically referring to the electronic transmission of invoices be-
tween suppliers and purchasers, without addressing data exchanges with tax authorities for
reporting and control objectives.
In the Western hemisphere, e-invoicing signifies the digital transmission of invoices directly
between suppliers and purchasers across various sectors, including businesses (B2B), public
administrations (B2G), and consumers (B2C). In the United States, a distinction exists be-
tween ‘e-invoice’ for B2B transactions and ‘e-bill’ for consumer transactions.
European Union (EU) legislation provides a comprehensive definition for the B2B context, in-
volving the electronic issuance and receipt of Value Added Tax (VAT) compliant invoices. It
mandates the archival of e-invoices in their original digital format, even if a printed version is
produced subsequently. This definition is widely accepted and includes digital invoices, pri-
marily in PDF format. For B2G transactions, only structured formats qualify as e-invoices un-
der EU directives. The definition for B2B transactions may evolve with the implementation of
the 'VAT in the Digital Age' (ViDA) project.
In Latin America, the term ‘e-factura’ or ‘e-boleta’ refers to the digital transmission of sales
invoice data to tax authorities.
In Asia, practices vary, with Singapore and some countries aligning with the Western defini-
tion, while others use the term for reporting sales data (e-tickets, e-receipts) to tax authori-
ties. In countries like India, Indonesia, and China, e-invoicing is used for VAT invoice registra-
tion.
The future of e-invoicing is moving towards standardized structured data use across B2B and
B2G mandates, aiming to standardize invoice exchange methods.
The term ‘e-billing’ refers to the electronic generation of bills for consumers (B2C) and gov-
ernment-to-consumer (G2C) transactions. Numerous stakeholders employ the terms ‘e-in-
voicing’ and ‘e-billing’ interchangeably, without distinguishing between them based on the re-
cipient segment. Instead, they utilize one of these terms universally for all electronic invoice
transactions.
billentis defines ‘invoice’/’bill’ and ‘e-invoice’/’e-bill’ for global statistical and predictive analysis.
Legal definitions may vary, but excluded from the e-invoice category are:
+ Financial documents that do not reflect a commercial transaction, accompanied by a

'request for payment', such as bank statements and waybills.
+ Invoices that are entirely digital but do not meet tax compliance requirements due to
deficiencies in integrity, authenticity, and readability.
+ ‘Electronic invoices’, supplemented by legally significant paper-based summary in-
voices as components of the Electronic Data Interchange (EDI) ecosystem, are
scanned, printed, or archived by recipients. In instances where only the paper version
is maintained as the 'new' de facto original and assumes the role of the primary docu-
ment.
+ Asymmetric e-invoicing, where buyers retain the right to request a printed version of
the invoice, which shall then be recognized as the legally valid original invoice.
+ Bulk of paper invoices, despite the concurrent electronic transmission of invoice data
to tax authorities or trading partners.
April 2024 8
There are three recognized types of e-invoices: legal invoices, core (VAT-/Sales tax (ST)) in-
voices, and commercial invoices. Legal invoices meet tax compliance requirements with man-
datory fields and authentication, preserved as the original valid invoice. Core invoices comply
with tax and trade requirements, supporting automated processing. Commercial invoices, de-
signed for specific industries, accommodate extensive data fields to enable process automa-
tion.
Legal invoices: Electronic invoices, which mandatorily include 8 to 16 essential fields along
with the authentication of both the issuer and recipient, are exchanged between two entities
acting as supplier and buyer. These digital, tax-compliant invoices serve as the legitimate orig-
inal invoices. The exchange occurs directly between the entities, through service providers, or
via platforms offered by tax authorities. These electronic invoices are meticulously preserved
as they constitute the sole original invoices recognized by tax authorities and auditors for
compliance purposes.
Core invoices: Compliant with the standards for VAT, Sales tax and trade invoicing, including
the European Norm for EU-wide B2G electronic invoicing. This entails a comprehensive for-
mat featuring 150 to 500 fields to facilitate automated processing. Such invoices are com-
monly generated by accounting/ERP systems and serve as the foundation for electronic tax
reporting, e-invoicing, and the automation of business processes.
Commercial invoices: The Universal Business Language (UBL) standard encompasses ap-
proximately 4,000 distinct data fields exclusively for invoicing purposes, leading to the devel-
opment of UBL subsets tailored to particular user groups, such as NES, OpenPeppol, and
UBL-TR. Industries such as healthcare and transport logistics heavily rely on these specialized
commercial invoices to achieve full automation of their processes.
2.1.2 From Tickets to Core Invoices

In today's global market, customers across the majority of nations can seamlessly acquire
products or services at the point of sale (POS) without undergoing extensive formalities. Upon
completing a transaction, customers receive a receipt, which notably omits the inclusion of
the customer's name. The transfer of electronic data to customers presents challenges, ren-
dering automated processing complex or unfeasible.
April 2024 9
For transactions surpassing several hundred euros in value, regulatory requirements in many
jurisdictions necessitate customer authentication, incorporating their details into the pay-
ment confirmation. Consequently, the receipt is enhanced with the customer's primary infor-
mation, elevating it to the status of a standard invoice.
Reflecting on developments a decade prior, it is observed that customers in certain forward-

thinking countries, such as Chile, were incentivized through financial means (e.g., a more fa-
vourable VAT rate) to voluntarily disclose their identity at the POS.
The authors anticipate a trend towards stricter regulations on anonymous POS transactions
as a strategy to combat tax evasion. This could manifest through legislative amendments low-
ering the threshold for anonymous purchases. Additionally, advancements in mobile technol-
ogy, facilitating easy merchant and customer authentication via QR codes or applications em-
bedding identity information, are likely to be a contributing factor. Indications are that a signif-
icant portion of invoices, in a broader legal context, will transition to core invoices. This shift is
poised to enhance the electronic exchange and automated processing of these invoices.
Receipts and tickets, previously issued anonymously, are increasingly likely to in-
corporate customer authentication data at the POS or during transactions using
mobile devices. This will enable electronic transmission to customers, integration
into accounts payable (AP) systems, and facilitate their automatic processing.
It is crucial to clearly differentiate between invoices and receipts (which include payslips and
tickets), as both categories play instrumental roles in recording transactions for goods and
services. Invoices and receipts generally share similar details, such as the transaction value,
applicable sales tax, and discounts.
Examples of ‘invoice-like documents and messages’ include:
+ Invoice data sent to tax authorities for validation or audit purposes, covering electronic
reporting and VAT/Sales tax filings.
+ Digital counterparts to conventional fiscal printers that produce payment receipts, in-
cluding electronic receipts generated at points of sale (e.g., retail stores, dining estab-
lishments, ticket counters) and submitted to tax authorities for validation or audits, es-
pecially in regions like Taiwan and certain Latin American countries.
April 2024 10
The projection that electronic Point of Sale (POS) systems and mobile invoicing will become
increasingly prevalent is supported by several factors. These technologies enhance conven-
ience for consumers and play a critical role for businesses in managing transactions at the
POS (including business meals, office supplies, and fuel for company vehicles) and enabling
purchases via mobile apps (e.g., for train and flight tickets, parking fees). Moreover, tax au-
thorities are progressively requiring customer authentication for even minor transactions, in-
tegrating such data into payment confirmations. This shift is crucial for businesses to accu-
rately reclaim taxes or allocate these expenditures within their accounting systems. The move
from traditionally anonymous transactions to digital invoices facilitates their seamless inte-
gration and processing within customer systems. This is why in the future it will be less and
less possible to differentiate between classic e-invoices and personalized e-receipts in a global
context.
2.1.3 E-invoicing versus E-reporting

Although invoice-relevant data can be exchanged using the same technical platforms, and fol-
lowing the same schemes and models, it is useful to distinguish between e-invoicing and e-re-
porting to tax authorities. Mainly in African and Asian publications, e-reporting from cash reg-
isters and virtual printers to tax authorities is often translated into English using the term ‘e-
invoicing’. However, we use the term differently in this document.
E-invoicing: Both the supplier and the buyer have finally an electronic invoice that represents
for tax purposes the invoice original. These invoices include the full content. In practice, it may
be one document, or several documents, one of which contains all the core information rele-
vant for tax purposes, with separate extensions that are more relevant to suppliers and buy-
ers.
In several jurisdictions, tax authorities mandate that suppliers utilize specific invoice numbers
(termed 'folio') they issue. Subsequent to generating these invoices, suppliers in certain re-
gions are obligated to submit comprehensive invoice details to the tax authorities and, either
directly or indirectly, to the purchasers. In some cases, tax authorities demand this infor-
mation prior to the dispatch of goods. The tax authority or certified service providers then
scrutinize the data, providing suppliers with electronic validation codes as confirmation.
E-reporting to tax authorities: E-reporting includes reports of business transactions, extracts

of invoices, declarations of any other fiscal data, and tax records. It is devised to speed up pro-
cessing of tax statements and returns. In one application example, only the supplier has finally
an electronic invoice, but sends the original invoice in paper form to the buyer. In another sce-
nario, the parties exchange just an extract of the invoice electronically (which is suitable for
reporting and tax audit purposes).
Certain countries mandate the submission of invoice summaries in any format or specifically
as the Standard Audit File for Tax (SAF-T). In addition to invoicing details, suppliers are
obliged to disclose additional data of fiscal significance.
2.1.4 From E-invoicing to Integrated Digital Trade

In nations with Value-Added Tax (VAT) frameworks, invoices are paramount among all busi-
ness communications. Valid invoices are essential for the reclaiming of VAT and the consider-
ation of purchasing costs in financial accounting. Consequently, the emergence and sustained
relevance of terms such as ‘e-invoicing’ and ‘e-billing’ were natural developments, further so-
lidified by legal definitions. Historically, many solution providers specialized exclusively in e-in-
voicing functionality, yet the demand has grown for support across a broader spectrum of
messages within both the financial and physical supply chains. Notably, messages pertaining
to electronic tax reporting are often directly associated or, ideally, synonymous with these
business communications. In the context of digitalization, e-invoicing constitutes merely a seg-
ment of a comprehensive landscape, necessitating an integrated approach to leverage its full
potential.
April 2024 11
The automation of procurement processes, financial processes and tax reporting has histori-
cally progressed with a degree of independence. At its least effective, this segmentation re-
sults in isolated processes and data silos. However, the private sector has made strides in au-
tomating the financial and physical supply chains, evidenced by the exchange of up to 160 dif-
ferent types of electronic business messages between suppliers and buyers.
Notably, tax authorities in Asia, Latin America, and increasingly in Europe, mandate the sub-
mission of electronic data mirroring the business communications transacted between suppli-
ers and buyers.
The convergence of these three domains is progressively evident. Despite their individual evo-
lutions, processes and communications between trading parties and tax authorities often pro-
ceed in parallel. A harmonized approach to digitalization is achievable only through collabora-
tive efforts among suppliers, buyers, and tax authorities to design and implement a unified
model, paving the way for Integrated Digital Trade.
April 2024 12
This shift signifies the emergence of a new market segment, termed Integrated
Digital Trade, transcending previous definitions such as Financial Supply Chain,
EDI, Order-to-Cash, Procure-to-Pay, and Business Automation. This segment rep-
resents a holistic approach to digitally facilitated trade, underscoring the evolv-
ing landscape of tax compliance and administration.
2.1.5 How Tax Authorities Drive Integrated Digital Trade

This comprehensive strategy is primarily propelled by tax authorities, aiming to combat tax
evasion through extensive data collection. This method embraces the Big Data concept, fo-
cusing on gathering critical data on all pertinent matters. Currently, the universal practice in-
volves the acquisition of general ledgers and other audit-related data, which, in most in-
stances, is mandated only after transactions have concluded. Although paper-based reporting
remains prevalent, its impact on curbing tax evasion appears negligible. The exploitation of Big
Data is emerging as a pivotal method in the fight against tax evasion.
The pivotal role of invoices, as they furnish tax authorities with the most comprehensive data,
marks a significant phase in this transformation. This evolution mandates that organizations
exclusively exchange invoices in a digital format, with the obligation to submit these invoices to
tax authorities either before or subsequent to goods dispatch, adhering to the Continuous
Transaction Control (CTC) model. The employment of e-audit and data forensics techniques
enables tax authorities to identify discrepancies more efficiently, leading to a noticeable re-
duction in tax evasion in several nations.
However, tax evasion avenues still exist, such as through over-the-counter sales or inaccurate
declarations of salaries. In response, advanced nations are striving to fully digitalize the com-
munication loop between taxpayers and tax authorities, ensuring that all fiscally relevant data
is electronically transmitted. This approach paves the way for real-time or near-real-time au-
dits to become standard practice.
This digital transformation encompasses approximately 25 to 30 fiscal documents, now in-

creasingly required to be electronically exchanged with tax authorities, business partners, and
employees. These documents include:
+ invoice extracts
+ full-content invoices
+ POS and mobile invoices
+ Corrections, cancellations
+ credit/debit notes
+ financing
+ payments
+ purchasing, procurement
+ human resources, salary statements
+ transport and logistics
+ inventory
+ export/import documents
+ VAT/Sales tax declarations
+ bank statements
+ etc.
Furthermore, documents and information related to transport, delivery, customs, and manu-
facturing are anticipated to become integral to electronic reporting. Globally, several coun-
tries are advancing towards integrating these practices, although the extent and integration
level vary. The EU's Excise Movement and Control System (EMCS) [1], Brazil's pre-shipment
April 2024 13
invoicing requirement [2] and Kazakhstan's Virtual Warehouse Module exemplify strides to-
wards merging the virtual and physical tracking of goods [3]. Russia, distinctively, focuses on
the traceability of pharmaceuticals to prevent counterfeiting rather than tax evasion.
2.2 Tax Driven Continous Transaction Control Models (CTC)
2.2.1 Tax Gap as Main Accelerator for Digital Reporting Requirements
Early days of e-invoicing have been pre-dominantly influenced by the private sector seeking to
achieve commercial benefits from business automation. Nowadays this has turned into a gov-
ernment driven market development. The main driver for governments to impose new legal
and tax related requirements is what is called the VAT/Sales Tax Gap.
The Value Added Tax (VAT) or Sales tax (ST) gap, representing the difference between the ex-
pected tax revenue and the amount actually collected, has long been a concern for govern-
ments worldwide. As countries grapple with the challenge of combating tax evasion and im-
proving revenue collection, the digitalization of fiscal documents emerges as a potent solution.
This way the tax gap serves as a primary catalyst for accelerating the digitalization of fiscal
documents.
The digitalization of fiscal documents involves the transition from paper-based records to
electronic systems, making use of technology to streamline processes and improve accuracy.
In the context of VAT/ST, this means implementing digital platforms for invoicing, reporting,
and tax compliance. The inherent benefits of digitalization include real-time data access, re-
duced administrative burdens, and enhanced traceability, making it a powerful tool in the fight
against the VAT/ST gap. This development led to the adoption of Digital Reporting Require-
ments (DRR).
In countries employing VAT systems, an invoice serves as a crucial document for substantiat-
ing tax compliance. Due to historical practices, many of these nations still adhere to Periodic
Transaction Controls (post-audit controls), involving tax audits conducted up to several years
after transactions occur. This approach presents several drawbacks for both taxpayers and
tax authorities, contributing significantly to tax evasion. Consequently, it is deemed outdated.
Thus, a swift transition towards real-time or near-time Continuous Transaction Controls
(CTC) models is underway. Under this framework, organizations are mandated to report in-
voices to tax authorities or, at the least, furnish key invoice details electronically. Initially
adopted by Latin American, Asian, and select European countries grappling with substantial
tax collection challenges, the CTC model is poised to gain global traction, already impacting
numerous international businesses. While it may become the prevailing standard, uniform im-
plementation across all nations is unlikely.
Causes of the VAT/ST Gap and possible digital solutions to bridge the gap
The VAT/ST gap is a crucial metric that reflects the effectiveness of a tax system in capturing
the revenue it is entitled to. This gap arises from various factors, including tax evasion, fraud,
administrative errors, and inadequate enforcement. Traditional methods of tracking and col-
lecting tax have proven insufficient, leading governments to seek innovative solutions to
bridge the gap and enhance fiscal transparency.
To gain insights into current and prospective digital reporting requirements, it is valuable to
scrutinize areas where a tax gap may arise. The subsequent table also delineates digital solu-
tions that possess the potential to substantially mitigate the gap.
Cause Digital solution

+ Cash payments without receipts and tax + Require non-cash payments above a
declaration certain amount and/or withdraw bank-
notes from circulation if they exceed a
certain amount.
April 2024 14
Cause Digital solution

+ Require certified cash registers that are
linked to the tax authorities to submit
real-time reporting.
+ Encourage or require customers to de-
mand receipts / invoices.
+ Electronic POS and mobile invoicing via
CTC models.
+ Carousel fraud and invoicing between + Require e-invoicing.
phantom partners, or involved parties + Require real-time lookup routines to
winding up before tax audit make sure that all trading parties are
registered in the national business di-
rectory.
+ Apply CTC models.
+ Invoicing using wrong amounts + Require e-invoicing via CTC models.
+ Artificial intelligence to detect wrong
amounts.
+ Goods are not supplied after an invoice + For physical supplies: Digital link be-
has been issued tween the virtual and physical world;
transport documents shall be valid only
with evidence that transported goods
have been declared with the tax authori-
ties. Digital inventory reporting between
businesses and tax authorities.
+ Undeclared supplies and barter transac- + Artificial intelligence; match between in-
tions voices, labour costs and inventory
+ Smuggling and domestic fraud with + E-customs; digital trade facilitation; digi-
physical supplies tal link between the virtual and physical
world.
+ Fictive employees and wrong labour + Require electronic salary statements,
costs which are exchanged using CTC models.
The impact of the VAT/ST Gap
To understand the development of e-invoicing in general, and the influence of the govern-
ments in particular, it may be helpful to understand the impact of the VAT/ST gap. Obviously,
the economic impact of the VAT/ST Gap can vary significantly depending on the region, the
size of the informal economy, the effectiveness of tax administration, and other factors.
The impact becomes very apparent looking at two key figures: The percentage of VAT/ST
compared with the overall tax revenue and the actual gap that appears globally.
April 2024 15
On a global scale, Value Added Tax (VAT) and Sales tax collectively account for approximately
34% of a country's overall tax revenue, making them the most significant taxes in nearly every
nation.
The latest available data reveals a tax gap ranging from 20% to 30% of public revenue, which
can be reduced by 50% by introducing tax compliance schemes. More recent figures from the
European Commission highlight a notable decrease in the VAT gap over the past few years [4].
However, it is essential to note that this reduction is not indicative of a global improvement in
tax collection but is primarily attributed to the economic downturn caused by the COVID-19
pandemic and the departure of the United Kingdom from the European Union, a significant
economic player.
However, the evolution of the VAT gap in Italy indicates potential enhancements stemming
from the implementation of Digital Reporting Requirements. Italy, as the inaugural European
Union member state to adopt such prerequisites, has realized an annual increase in revenue
amounting to approximately €6 billion.
Similar positive outcomes have been observed in Latin American nations:
+ Brazil experienced a noteworthy $58 billion (USD) surge in tax revenue by addressing
gaps in invoicing and reporting.
+ Chile and Mexico successfully reduced their VAT gap by up to 50% [5].
+ Colombia achieved a 50% reduction in tax evasion through the application of similar
models.
Drawing upon the insights garnered from Austria's case, billentis conducted a comprehensive
analysis to compare the advantages of implementing a Decentralized Continuous Transaction
April 2024 16
Controls (DCTCE/five-corner) model versus natural market evolution. This investigation un-
derscored that the economic gains for a nation adopting this model could be 5 to 11 times
greater than the incremental VAT/ST revenue, attributable to efficiencies gained through
business process automation among trading entities.
Countries embarking on this journey now have the distinct advantage of leveraging the valua-
ble insights and experiences from trailblazing nations. This enables them to strategize from a
comprehensive, top-down approach, engage in early collaboration with the private sector, and
afford adequate preparation time for the private sector to effectively implement the model.
2.2.2 From Periodic to Continous Transaction Controls

Over the last few years and decades, the process of how taxpayers have to submit their data
to the tax authorities has changed massively. The way in which VAT and other indirect taxes
are transmitted is now also referred to as Digital Reporting Requirement (DRR). In turn, the
trend has clearly developed from Periodic Transaction Controls (PCT), such as the SAF-T
standard or traditional VAT Return, in the direction of Continuous Transaction Controls
(CTC). The main advantage for the tax authorities here is the faster availability of data and
thus additional opportunities to rule out any VAT/Sales tax fraud as effectively as possible.
Starting from 2005 different models in different shapes and forms have developed and still
exist within the marketplace [6]: Real-time Reporting, Clearance and Centralised Exchange.
Based on initial experience, however, a model has now been developed that not only considers
the benefits for the public sector, but also allows companies to equally benefit from optimized
business processes. This latest generation model is known as the Decentralized CTC and Ex-
change model (5 corner) and is the basis for the planned introduction in France and the
United Arab Emirates, for example.
April 2024 17
2.2.3 Real-time Reporting Model

Under this model, taxpayers are required to promptly report invoices to the tax administra-
tion or its designated government agency. This reporting occurs shortly after the issuance
and exchange of invoices between trading parties.
The framework of this model encompasses several

key features aimed at streamlining the reporting
process. Firstly, there is the establishment of a
central processing platform by the tax administra-
tion. Secondly, the model mandates the utilization
of accredited software solutions for access and
processing on the platform. Thirdly, taxpayers are
expected to submit either the entire invoice or a
subset of invoice data within a specified timeframe
of 24-72 hours post-invoice issuance, with flexible
frequency intervals. Lastly, the system allows flexi-
bility in the submitted dataset, enabling it to be
generated fully from data within the invoice or re-
quiring additional data not present in the invoice.
Beyond adherence to fiscal rules, the model recog-

nizes the diverse landscape of invoicing practices.
While invoicing is often not extensively regulated,
economic operators may employ formatted elec-
tronic invoices or, more commonly, opt for humanly
readable representations such as PDFs or traditional paper. The encouragement of e-invoic-
ing is underscored by its potential for enhancing economic efficiency.
The adoption of this model poses unique challenges for taxpayers. It necessitates the imple-
mentation of distinct solutions and processes. Real-time reporting requires a separate sys-
tem from that used for invoicing and/or e-invoicing. Additionally, the inclusion of data beyond
the typical invoice content, such as financial accounting data, elevates both the initial invest-
ment cost and ongoing maintenance expenses.
While the model presents a significant stride toward modernizing tax reporting processes,
stakeholders must carefully navigate the challenges associated with its implementation. Bal-
ancing the benefits of enhanced transparency and efficiency against the investment costs will
be crucial for widespread acceptance and success.
April 2024 18
Countries exemplifying this model include Hungary and South Korea.
2.2.4 Clearance Model

This framework streamlines the process of managing invoices, which includes checking for tax
compliance and getting approvals before the invoice is sent to the purchaser. The framework
is implemented in various configurations:
+ Pre-Clearance and Post-Clearance: Predominantly, invoices are submitted to the

platform prior to being sent to the recipient, a procedure known as pre-clearance. Al-
ternatively, some models involve submission post-approval by tax authorities, referred
to as post-clearance.
+ Simplex and duplex: The simplex model involves solely the issuer of the invoice re-
porting to the platform. In contrast, the duplex model necessitates both the issuer and
the recipient uploading the invoice to the platform.
The process can be conducted through a single,

centralized platform or by connecting with various
authorized service providers. Invoices and related
documents are exchanged directly among busi-
nesses or individuals, with or without the aid of ser-
vice providers. It's notable that these activities
aren't governed by government regulations.
A central feature of this arrangement is the crea-
tion of a main data storage and a platform by the
tax authority. This authority requires taxpayers to
use a specific, structured format for their invoices
when reporting to the platform. Under this ar-
rangement, the issuer of the invoice must first send
it to the designated platform, which houses the
main data storage, to get approval. This step veri-
fies the tax compliance of the document. After ap-
proval, the issuer can send the approved invoice to
the recipient. In a two-way version of this model
(duplex), the recipient verifies the invoice on the
same platform before payment. It's important to
understand that these steps might change if the approval process is handled by authorized
external providers.
There are various challenges and concerns for taxpayers in this system. First, the format re-
quired for approval doesn't set a standard for all invoices but is specifically designed for the
Revenue Authority's requirements. Furthermore, there isn't an automatic way for businesses,
like buyers and sellers, to work together smoothly, often leading to the use of different meth-
ods for exchanging documents.
Additionally, this model doesn't inherently improve the automation of managing accounts re-
ceivable and payable. To gain benefits beyond tax-related ones, it needs to be part of broader
digital initiatives, including adopting electronic invoicing. From a business perspective, this
process places significant operational burdens, particularly on the party issuing the invoice. As
a result, this model is increasingly being replaced by more centralized or decentralized trading
systems.
Countries exemplifying this model include Chile and Mexico.
2.2.5 Centralised Exchange Model

The Centralized Exchange model in e-invoicing designates a framework where a pivotal plat-
form or exchange facilitates the transfer of electronic invoices between buyers and sellers,
April 2024 19
concurrently incorporating tax reporting features. This model is applicable for both Business-
to-Government (B2G) and Business-to-Business (B2B) transactions.
Within this paradigm, a central entity or platform

operates as an intermediary among diverse busi-
ness entities. Its primary responsibilities encom-
pass the reception, processing, and transmission of
invoice data, often requiring a uniform invoice for-
mat.
Vendors transmit their digital invoices to the cen-

tral exchange platform through various methodolo-
gies, including direct upload, API integration, email,
or third-party service providers. Upon receipt, the
central exchange conducts a series of examina-
tions, ensuring the invoice's format validity, tax reg-
ulation compliance, and adherence to specific busi-
ness rules. Subsequent to these validations, the in-
voice is then relayed to the designated buyer, who
may retrieve it via the platform through different
channels or through service providers.
However, this model presents certain challenges.

The reliance on a singular platform may lead to risks associated with system downtimes or po-
tential monopolistic dominance. Businesses must also modify their systems for integration
with the central exchange, including aligning with a data format that primarily serves the
needs of tax authorities. This necessitates the risk of creating separate workflows between
sellers and buyers to facilitate business automation and circumvent the constraints imposed
by the invoice format. Furthermore, the model disrupts the trade cycle automation, as invoice
processing occurs through the central platform, whereas other documents like orders or dis-
patch advices are managed directly between trading parties or their service providers.
Countries exemplifying this model include Italy, Serbia, and Turkey.
2.2.6 Decentralised CTC and Exchange Model (5 corner)

Recently, a new model has emerged that satisfies both the fiscal demands of tax authorities
and the requirements for business automation: the Decentralised CTC and Exchange model.
This model distinguishes itself by having data validation and exchange conducted by certified
service providers, unlike other models. For certification, these providers must comply with a
minimum set of technical and financial standards.
The primary document flow is managed between service providers using an established in-
teroperability standard. A selected portion of the invoice, or possibly other business docu-
ments, is extracted and reported to the central tax authority platform using a specific stand-
ard. This data subset is transmitted immediately after the issuance of the business document,
facilitating an uninterrupted trade cycle. Only certified service providers (referred to as cor-
ner two and three) have access to the tax authority platform, which serves as corner five.
Both sellers and buyers interact with their chosen service provider through a single, individual
interface. This approach enables businesses to capitalize on their existing investments in e-
invoicing and trade cycle automation technologies.
Additionally, the model is available in both simplex and duplex versions. In the simplex version,
only sellers are required to report to the platform, whereas in the duplex version, buyers also
need to report the received business documents.
The primary advantages of the five-corner model include:
April 2024 20
+ Modular Deployment: The model's various flows

can be implemented in stages. The initial focus typi-
cally lies on the compulsory B2B and B2G exchange
of business documents, utilizing the advantages of
business automation. Once this is established and de-
ployed, a separate flow between the certified service
providers and the central platform can be introduced
with minimal impact on business partners.
+ Tax Control Customization: Different countries

may have varying requirements for the data they
need under a tax reporting scheme. This might in-
clude different invoice data sets or additional trade
cycle documents. In every scenario, only a subset of
the document is used, ensuring data confidentiality
and minimization. Changes in requirements do not
impact the economic operators as the extraction is
managed by the certified service providers.
+ SME Friendly: Considering the prevalence of

SMEs in many countries, these models often incorporate low-cost or complimentary
services mandated for service providers as part of the certification process. This
typically relates to a specific number of invoices (e.g., up to 50 invoices per year) and
is contingent on the company's size.
+ No Single Point of Failure: The main exchange of business documents occurs be-
tween certified service providers. The central platform receives only a minimal data
set, once data quality and compliance are assured. Consequently, the platform only
has to maintain and support a limited number of interfaces.
These findings have significantly propelled interest among a wide range of nations to-
wards adopting the Continuous Transaction Controls (CTC) framework, particularly
the 5-corner model, in pursuit of achieving similar economic benefits. Consequently, it
is anticipated that numerous countries worldwide will have established the 5-corner
CTC model by 2030.
2.3 Private Exchange Models

Next to tax driven models there exist private exchange models that can be offered by service
providers or used by companies in order to exchange business documents with their trading
partners. Starting from early days of e-invoicing until today, there is a clear evolution of mod-
els in B2B/B2G beginning with two corner models up to four corner models.
April 2024 21
The main advantage for companies to use e-invoicing or Integrated Digital Trade is business
efficiency and cost savings. Obviously for end users the focus is rather on automated payment
transactions and avoiding the usage of different portals. As payment (and also financing) is
getting more and more aligned with e-invoicing, related models emerge in the area of B2C.
2.3.1 2 Corner Model (Buyer or Supplier direct/EDI)

A purchaser incorporates an electronic invoicing and/or invoice management solution into
their operational framework to receive electronic invoices through various channels:
+ Receives invoices directly as a data stream

for seamless integration into their Accounts
Payable (AP) solution, primarily preferred for
invoices from major suppliers.
+ Smaller suppliers input invoice data into a
web template on the buyer's corporate invoice
portal (webEDI). This data can be automatically
processed and imported into the AP system.
This model is favored by larger organizations with

a limited supplier base. It can also prove effective
for smaller suppliers when electronic orders are
exclusively transmitted to them (e.g., via an
extranet portal). Numerous solution providers
offer functionality to easily convert these
electronic purchase order data into invoices for
submission back to the buyer.
On the supplier side, an entity implements an e-

billing/e-invoicing solution within its environment
to disseminate electronic invoices through
various channels:
+ Sends invoices to customers via email, Apps, etc.

+ Provides e-invoices on its customer portal, allowing customers to log in, view, and
download them.
April 2024 22
The supplier direct model is particularly popular in high-volume industries such as

telecommunications, utilities, card companies, and online shopping portals. Small businesses
also prefer exchanging e-invoices directly with their trading partners. Due to their scale, these
businesses may lack the capacity to host e-invoices on their own portals, opting instead to
exchange them as PDF attachments to emails.
Over time, large organizations employing biller or buyer direct models have found that the
marketing rollout is more challenging than anticipated, and the maintenance of their
applications is ultimately too costly. Consequently, some service providers offer white-label
services, operating under Software as a Service (SaaS) or Platform as a Service (PaaS)
models. These providers manage the direct model on behalf of large issuers and recipients of
invoices, handling software development, maintenance, and operations. Customers pay a fixed
integration fee along with a volume- or time-based fee.
2.3.2 3 Corner Model (network)

The three-Corner Model emerges as a comprehensive framework for orchestrating e-invoic-
ing processes among buyers, suppliers, and service providers. This model delineates the in-
teractions and responsibilities of these three key
entities within the e-invoicing landscape, offering
a structured approach to facilitate seamless and
secure electronic document exchange.
The first corner of the model represents the

buyer, where initiation and reception of e-invoices
take place. By leveraging a single interface to the
service provider based on a defined data format
and communication protocol, buyers can seam-
lessly integrate e-invoicing into their procure-
ment systems, automating the invoice approval
workflow and expediting payment processes. This
happens regardless of how suppliers transfer
their documents to the service provider. Central
databases are usually used to ensure that incom-
ing documents in various formats (PDF, XML, por-
tals, etc.) are converted into the data format
agreed with the recipient. Increasingly, the neces-
sary data is extracted using Artificial Intelligence,
meaning that traditional document scanning or
data mapping is no longer required.
The second corner focuses on the supplier, responsible for generating and delivering e-in-
voices. The model emphasizes the importance of compliance with established e-invoicing
standards, ensuring uniformity and interoperability across diverse business ecosystems.
Based on one single interface to the service provider the model still caters for individual re-
quirements imposed by large buyers. Suppliers benefit from reduced processing times, in-
creased accuracy, and improved cash flow management through the adoption of the Three-
Corner Model.
The third corner introduces service providers, acting as facilitators in the e-invoicing pro-
cess. These entities play a crucial role in offering e-invoicing solutions, such as platforms for
invoice creation, validation, and transmission. Intermediaries contribute to the scalability of e-
invoicing adoption by providing a bridge between diverse systems and ensuring a smooth ex-
change of electronic documents. The service provider supports the main legal requirements,
authenticity, and the end-to-end data integrity. An increasing number of operators offer addi-
tional services such as tax compliant long-term archiving.
April 2024 23
2.3.3 4 Corner Model (Interoperability)

The four-corner model operates as an exchange framework facilitating the transmission of in-
voice messages, with distinct service providers supporting both the sender and the receiver.
This model can be viewed as an extension of the two and three-corner models, where service
providers of the former models connect to each
other, resulting in the establishment of a four-
corner model.
A notable advantage of the four-corner model lies

in affording flexibility to both buyers and suppliers
in selecting their preferred service providers.
Simultaneously, it broadens the reach for each
service provider and their customers, as engaging
with an additional service provider can expand
the electronic business partner network for a
company.
To enable interoperability within a four-corner

model, service providers must reach consensus
on various standards, including legal agreements,
service level agreements, data formats, proto-
cols, and potentially commercial agreements.
Such agreements can be bilateral or based on in-
ternational standards. Currently, three prominent
global associations—GENA (Global Exchange
Network Association), OpenPeppol, and DBNA
(Digital Business Networks Alliance), the latter
recently started operations — are instrumental in setting these standards. The adoption of
international standards streamlines the process, allowing seamless access to the entire cus-
tomer base of another service provider through a single interface, whereas bilateral agree-
ments may entail individualized setups for each customer.
As the global trend towards e-invoicing implementation continues, a surge in companies

adopting these solutions is anticipated. This necessitates a value proposition focused on re-
ducing complexity, consequently saving time and costs associated with achieving business
process interoperability among trading partners. In response to this, OpenPeppol and GENA
have initiated a collaborative incubation project to harmonize their existing interoperability
frameworks, creating a unified framework for seamless business cooperation.
The Global Interoperability Forum (GIF) extends the concept of interoperability between di-
verse frameworks, including associations such as DBNA and ConnectONCE in the United
States. This collaborative effort aims to establish common standards, fostering a more cohe-
sive and efficient global business environment.
2.3.4 Consumer Driven E-invoicing Models

The various two, three, and four corner models are evidently well-suited for processing con-
sumer (B2C) invoices as well. However, the advantages of employing electronic invoices for
consumers differ significantly from those in B2B or B2G contexts. Rather than navigating di-
verse IT systems for invoice processing, consumers prioritize a convenient method for making
payments and managing their invoices. The same principle applies to the receipt and storage
of invoices, leading consumers to seek streamlined processes and avoid downloading or re-
ceiving invoices from disparate sources.
In response to these consumer-centric requirements, additional B2C models have emerged

that closely integrate the e-invoicing process with payments, invariably involving payment and
April 2024 24
financial institutions. The role of these supplementary intermediaries is to bridge the gap be-
tween invoice senders and end users by incorporating information about the end user's bank
account, which is typically not available to the sending party.
This process typically encompasses the following components:
+ Access to the intermediary platform for invoice senders is restricted to certified ser-
vice providers.
+ End users receive e-invoices through existing Online Banking solutions to adhere to se-
curity and accessibility requirements.
+ Payments are facilitated without the need for re-entering payment information, lever-
aging the existing Online Banking process.
Comparable solutions have been deployed in Finland, Belgium, and Switzerland. The integra-
tion of the upcoming Request-to-Pay scheme by the European Payments Council into the so-
lution remains uncertain. It is yet to be determined whether the new scheme possesses the
capacity to supplant existing models.
The imposition of B2C mandates for e-invoicing is anticipated to influence the model. In an op-
timal scenario, this model could potentially be connected to a centralized tax administration
platform, facilitating the seamless onboarding of B2C transactions.
2.4 Supporting Associations and Initiatives
2.4.1 Global E-invoicing Associations
2.4.1.1 Global Exchange Network Association (GENA)
The Global Exchange Network Association (GENA), initially established as the European E-in-
voicing Service Providers Association (EESPA), is an international trade association that fo-
cuses on the digital exchange of data and documents related to business transactions.
GENA's transformation from EESPA to its current form occurred in October 2023, reflecting
a shift from a European to a global focus establishing local chapters in different regions world-
wide. The organization aims to develop best industry practices and influence public policy,
particularly in the realm of electronic invoicing.
GENA comprises over 100 member organizations, including service providers from various
sectors such as network services, business outsourcing, financial services, technology, and
Electronic Data Interchange (EDI) services. These members create a vibrant, competitive
market, and do so by collaboration in the non-competitive space, striving to develop common
standards and best practices. GENA provides a platform for its members to engage in net-
working, sharing knowledge, and developing interoperable systems for efficient electronic in-
voicing and data exchange.
The association's activities revolve around three main pillars: influencing business efficiency
and innovation, informing members and the public about e-invoicing and related issues, and
April 2024 25
facilitating interaction and cooperation among members. GENA's governance structure in-
cludes an Executive Committee and various working groups focusing on interoperability, pub-
lic policy, compliance, and other key areas.
Overall, GENA plays a critical role in advancing the efficiency and standardization of electronic
invoicing and business document exchange on a global scale.
2.4.1.2 OpenPeppol
OpenPeppol is an organization that was established in 2012 to support the expansion and
adoption of the Peppol specifications. These specifications were initially developed as part of a
large-scale project funded by the European Commission to facilitate electronic procurement
and invoicing processes across different European countries. The main goals of OpenPeppol
and the Peppol specifications are:
+ Interoperability: Peppol specifications ensure that different eProcurement and e-in-

voicing systems can communicate with each other globally. This interoperability is cru-
cial for efficient domestic and cross-border transactions.
+ Standardization: By standardizing the formats and protocols for electronic procure-

ment documents (like invoices, purchase orders, etc.), Peppol simplifies the process of
electronic transactions between businesses, and between businesses and govern-
ments.
+ Connectivity: Peppol provides a network (known as the Peppol Network) that enables
the secure exchange of business documents. This network is supported by Peppol Ac-
cess Points, which are service providers that connect users to the Peppol Network.
+ Governance: the OpenPeppol legal and compliance framework ensures that the
Peppol specifications and Peppol Network facilitate a trusted and secure implementa-
tion of eProcurement and e-invoicing processes across different jurisdictions.
Beyond electronic invoicing, Peppol is increasingly relevant for the exchange of other elec-
tronic business documents, such as tax reporting, logistics, catalogues, and procurement.
With the growing emphasis on digital transformation globally, the role of OpenPeppol in stand-
ardizing and promoting electronic business document exchange is increasingly important in
the B2B and B2G sectors.
2.4.1.3 Digital Business Networks Alliance (DBNA)

The Digital Business Networks Alliance (DBNA) is an initiative aimed at enhancing the elec-
tronic exchange of business documents, particularly e-invoices, in the United States. Estab-
lished in 2023, it represents a significant effort to address the challenges and inefficiencies
associated with the B2B payments industry in the country, which has been heavily reliant on
manual processes.
The core mission of the DBNA is to create a secure and standardized electronic delivery net-
work for the safe exchange of business information, including e-invoices and supply chain doc-
uments. This is achieved through an exchange framework that the DBNA oversees. This
framework is designed to standardize how businesses connect, what information they send,
and how they electronically deliver this information.
One of the key features of the DBNA's exchange network is its support for a variety of elec-
tronic payment methods, such as instant payments, ACH, wire transfers, and card payments.
This network is developed to resolve issues arising from the lack of a centralized system for
sharing supply chain documents in the U.S. It ensures secure information sharing between
businesses, even if they use different software systems.
April 2024 26
The DBNA uses a Four-Corner Model for its exchange framework, which means that e-docu-
ments are received through an Access Point service provider that connects the network to its
users. Once connected, users can securely exchange electronic invoices and other electronic
supply chain documents. The communication protocol used on the network is AS4.
This initiative was tested through a pilot project implemented in three stages throughout
2022, which went into production and is available to all U.S. businesses since January 2024.
2.4.2 E-invoicing Initiatives

2.4.2.1 Relevant Global E-invoicing Initiatives
In the meantime, e-invoicing is reflected in almost every organisation or initiative that is re-
lated to trade and commerce. For example, it became a topic in bi- and multilateral trade ne-
gotiations like the Indo-Pacific Economic Framework (IPEF), the EU-US Trade and Technology
Council (TTC) and the Digital Trade Agreement negotiations between EU and Singapore/Re-
public of Korea/Japan.
The OECD's international VAT policy dialogue encompasses discussions on various aspects
of VAT, including digital reporting and e-invoicing. The organization seeks to promote interna-
tional cooperation, standardization, and best practices to ensure that VAT systems are effi-
cient, transparent, and adapted to the challenges posed by digitalization in the modern econ-
omy. This helps countries harmonize their tax policies and facilitate cross-border trade while
maintaining effective tax collection and compliance.
As part of the EU-US Trade and Technology Council in April 2024, e-invoicing has been ex-
plicitly mentioned. It underlines the ambition of the two regions to foster interoperability be-
tween the different local frameworks, as some differences have been determined. The joined
declaration stated the decision to choose a group of experts to continuously work on aligning
business and technical interoperability. This work includes the standardisation of the data
structure and content as well as the interoperability between service providers.
The primary objective of the Global Interoperability Forum (GIF) is to build consensus and
demonstrate how the member organizations Business Payments Coalition (BPC), Connect
ONCE, Digital Business Networks Alliance (DBNA), Global Exchange Network Association
(GENA) and OpenPeppol share a common vision for convergence to the maximum extent pos-
sible in the design and delivery of interoperable networks. This vision includes the belief in the
power of the four-corner e-delivery model and in its positive impacts on supply chain effi-
ciency for all actors. The GIF will also work to progress architectural alignment between in-
teroperability frameworks and their components.
GS1, known for its standards in supply chain management and global data synchronization,
also plays a role in the area of e-invoicing. Their activities typically include:
+ Standardization: GS1 develops and promotes standards for electronic invoicing. This
includes standardizing the format and content of e-invoices to ensure consistency and
interoperability between different systems and organizations.
+ Global Data Synchronization: GS1's Global Data Synchronization Network (GDSN) al-
lows companies to share standardized and synchronized data, including pricing infor-
mation, which is essential for accurate and efficient e-invoicing.
+ Barcoding and Identification: GS1 is renowned for its barcode standards, which can be
used in e-invoicing for product and service identification. This ensures that the items
on an invoice can be accurately identified and matched to a product database.
April 2024 27
+ Electronic Data Interchange (EDI): GS1 supports EDI standards, which are often used
for transmitting e-invoices between companies. These standards help streamline the
invoicing process and integrate it with other supply chain functions.
+ Education and Training: GS1 provides resources, training, and support to businesses
implementing e-invoicing. This includes guidelines on best practices and the use of GS1
standards in the invoicing process.
2.4.2.2 VAT in the Digital Age (ViDA)

In general, the European Union (EU) has always been highly supportive seeing e-invoicing and
e-procurement as key elements of the Digital Agenda and Single Market. The EU VAT Di-
rective 2006/12/EU, as amended by Directive 2010/45/EU created a harmonized and sup-
portive legal environment for e-invoicing focused on authenticity, integrity, legibility, and ar-
chiving. The Directive 2014/55/EU required that public sector contracting entities must be
able to receive and process e-invoices.
Now, on the 8th of December 2022 as part of the VAT Directive 2006/112/EC, the European
Commission (EC) announced the adoption of a new initiative - VAT in the Digital Age - that de-
mands mandatory intra-community electronic invoicing and business-to-business (B2B) digi-
tal reporting [7]. This will require all businesses, without any thresholds or exemptions, to ex-
change intra-community invoices electronically by 2028 and in parallel fulfil the requirements
for tax reporting. Within a ten-year period, the European Commission expects an additional
VAT revenue of 111 billion € and savings for businesses of about 41 billion €.
The main elements of ViDA affecting electronic invoicing:
+ Once the digital reporting is introduced recapitulative statements or sales lists will no
longer be required.
+ The definition of an electronic invoice will be changed to specifically make clear that it
must have structured data i.e., a standard PDF will not be considered an e-invoice any-
more. The required data elements and reporting format for the new intra-EU digital
reporting will be based on EN16931, the existing European e-invoicing standard.
+ It includes the removal of the buyer consent. An invoice sender no longer needs to ask
for the acceptance of electronic invoices by its customers.
An interesting additional aspect of the initiative is, that taxpayers will submit the required
transactional data to the relevant national tax authority. Tax authorities will then share data
with other member states by reporting it to the European Commission’s new central data-
base. This will encourage many countries to analyse their existing e-invoicing regulations and
also evaluate the introduction of mandatory e-invoicing for B2B transactions on a national
level. As a consequence, all EU countries will have initiated or implemented national tax plat-
forms and mandatory e-invoicing schemes by 2028.
The final approval of the initiative is anticipated to occur by May/June 2024, with a potential
deferment of the implementation date to 2030.
2.5 The Global Dissemination of Data Format Standards

Numerous standardization initiatives have historically struggled to gain acceptance among
stakeholders due to insufficient awareness of existing standards and the reluctance of certain
insular organizations to adopt external protocols. This has led to the proliferation of numerous
specialized standards with either domestic or industry-specific applications, particularly in re-
cent years. Such standards are likely to sustain only if they adapt to form a subset of widely
recognized global standards such as Oasis UBL or UN/CEFACT, or at least conform to a simi-
lar foundational model.
April 2024 28
In Europe alone, an estimated 10,000 ERP and accounting solutions are currently in opera-
tion. The integration of diverse e-invoicing standards generally falls outside the capabilities of
ERP providers. Consequently, many e-invoicing network operators have emerged to offer any-
to-any data formatting services. These services not only address legal and networking chal-
lenges but also significantly contribute to the central role of third-party providers in the e-in-
voicing sector across various nations. By utilizing such services, both issuers and recipients of
invoices are liberated from dependency on any single standard and are no longer constrained
by the pace at which a market-dominant standard emerges.
E-invoicing and procurement are critical elements of contemporary business operations, and
the development of various international and industry-neutral standards has been central to
enhancing these processes. These standards are designed to ensure efficiency, compatibility,
and security. Below is an overview of some of the most prominent standards currently in use:
Standard Description
UBL 2.x Developed by the Organization for the Advancement of Structured
ISO/IEC 19845:2015 Information Standards (OASIS), UBL is a widely accepted standard
that provides a complete suite of XML-based business documents,
including invoices. UBL, the Universal Business Language, is the
product of an international effort to define a royalty-free library of
standard electronic XML business documents such as purchase
orders and invoices. UBL provides the standards for the Peppol
framework and public procurement initiatives in several countries.
UN/CEFACT UN/CEFACT (United Nations Centre for Trade Facilitation and
Electronic Business), a United Nations body, has a global remit. It
encourages close collaboration between governments and private
business to secure interoperability for the exchange of information
between the public and private sector. It has developed:
+ XML Industry Invoice D.16B, this XML format is widely
used for cross-industry digital data interchange.
+ Cross Industry Invoice (CII) - This format focuses on ge-
neric invoice requirements, suitable for any industry
globally.
+ The UN Layout Key for Trade Documents, which is the
foundation for the EU’s Single Administrative Document
(SAD)
+ Numerous trade facilitation recommendations
PDF/A-3 PDF/A is an ISO-standardized version of the Portable Document
ISO 19005-3 Format (PDF), tailored specifically for the digital preservation of
electronic documents. Unlike standard PDFs, PDF/A eliminates
features that are not conducive to long-term archiving, an essen-
tial consideration for business documents that must be legally pre-
served over an extended period.
PDF/A-3, building on the PDF/A-2 (ISO 19005-2) standard, intro-

duces a critical enhancement allowing the embedding of files in any
format, such as XML, within a PDF/A document. This capability is
pivotal for integrating non-PDF data within the archival format.
European Norm 16931 Directive 2014/55/EU mandated the creation of a European stand-
CEN/TC 434 ard for electronic invoicing within public procurement to eliminate
cross-border barriers.
The outputs from the project group encompass a European stand-

ard detailing the semantic data model for core components of an
April 2024 29
electronic invoice, along with a technical specification that limits

the number of invoice syntaxes and includes additional elements.
The two syntax formats endorsed by CEN are UBL and
UN/CEFACT.
This standard is required to be implemented by all EU public ad-

ministrations. Its architecture accommodates national usage
specifications which dictate the mandatory use of certain ele-
ments while excluding others. Moreover, it facilitates national or
industry-specific modifications. This foundation not only complies
with current requirements but also establishes a robust frame-
work for future business-to-business (B2B) applications.
CEN/TC 440 The primary goal of these standards is to enhance and streamline
the electronic public procurement processes and the associated
informational flows within the physical and financial supply chains.
They encompass standardized messages for e-notification, e-ten-
dering, e-ordering, and e-fulfilment.
Industry specific standards are:

+ ETIS (Electronic Telecom Invoice Standard): Developed by the ETIS community, it’s
used for electronic data exchange in telecom invoicing, addressing industry-specific
aspects like data roaming and interconnect billing.
+ EANCOM: A subset of EDIFACT, specialized for retail industry invoicing, providing
standards for electronic data interchange in global retail.
+ ISO 20022: Multi-industry standard for electronic data interchange between financial
institutions.
+ LITIG (Legal IT Innovators Group): Used primarily by law firms for billing clients. It
helps standardize the electronic exchange of cost information between law firms and
their clients.
+ PIDX (Petroleum Industry Data Exchange): Developed by the American Petroleum In-
stitute, this format is used globally for all transactional data in the petroleum industry,
including electronic invoicing.
+ Rosetta Net: Uses XML-based messaging to standardize electronic business pro-
cesses and transactions in the technology, electronic components, and semiconductor
industries.
+ HL7 (Health Level Seven International): HL7 CDA (Clinical Document Architecture) for
invoicing, which is used for clinical documents but can be adapted for invoicing in
healthcare services.
+ ODETTE: Used for automotive industry invoicing in Europe, facilitating supply chain
and logistics operations data exchange.
Some country specific standards are:

+ Austria: ebInterface
+ Denmark: OIOXML (based on UBL)
+ Finland: Finvoice
+ Germany: XRechnung, ZUGFeRD
+ India: GST INV-1
+ Italy: BTW, FatturaPA
+ Spain: facturae
+ Sweden: Svefaktura, SFTI
+ Switzerland: swissDIGIN
+ Turkey: UBL-TR (based on UBL)
+ USA: ANSI ASC X12 810
April 2024 30
3. Market Development and Drivers: Watch the Tornado!

3.1 Watch the Tornado!
Current market trends indicate a significant impact resulting from the delayed implementa-
tion of new electronic e-invoicing mandates and frameworks on a global scale. The majority of
countries have not adhered to their initial timelines for introducing e-invoicing. Despite these
delays, it is evident that transformative changes are imminent. This shift, akin to a silent revo-
lution, remains largely unobserved at present but is poised to fundamentally alter the eco-
nomic landscape.
Consequently, the theme of this report has been inspired by Geoffrey Moore's seminal works,
‘Inside the Tornado’ and ‘Crossing the Chasm’, reflecting the anticipated profound and rapid
changes in the business environment.
‘Inside the Tornado’ by Geoffrey Moore is a seminal work in understanding the dynamics of
market development for technological innovations. The book extends the concepts intro-
duced in Moore's previous work, ‘Crossing the Chasm’, and focuses on the stages following
the early adoption of technology. Moore outlines a technology adoption life cycle that includes
several distinct stages: Innovators, Early Adopters, Early Majority, Late Majority, and Lag-
gards. This cycle forms a bell-curve, starting small with Innovators and peaking at the Early
Majority before declining.
The book delves into three major phases of the technology adoption life cycle:
+ The Bowling Alley: A phase of niche adoption following the chasm, where companies
must use their initial customers to attract further niche markets.
+ The Tornado: This phase occurs when a product gains rapid mainstream ac-
ceptance. Companies need to shift strategies drastically here, focusing on mass
market appeal and commoditizing their product.
+ Main Street: After the excitement of the Tornado, demand stabilizes. Companies
must then focus on differentiating their commoditized product to appeal to niche
markets and individual customers.
In 2024, the market landscape continues to be shaped by numerous delays, with a limited
number of multinational corporations initiating strategic planning in response to expected de-
April 2024 31
velopments. Nevertheless, based on numerous upcoming B2B mandates, the electronic in-
voicing sector is transitioning into a phase of widespread market adoption, referred to as the
'Tornado' phase.
This signifies a pivotal shift to a new infrastructural paradigm, necessitating a deep

understanding among both service providers and businesses. The anticipated in-
crease in demand underscores the importance for service providers to offer rele-
vant products and services, while businesses must proactively adapt to ensure
readiness, often underestimating the requisite changes.
In parallel to the development of the e-invoicing market, the nascent market for Integrated
Digital Trade is on the brink of evolution. Presently in the 'Bowling Alley' phase, as per Moore's
concept, it encompasses solutions such as Invoice Finance, Payment, and Procurement. Small
and Medium-sized Enterprises (SMEs) and larger corporations are expected to navigate dif-
ferent routes towards embracing Integrated Digital Trade. SMEs, facing fewer transactions
than their larger counterparts, may find limited benefit from automation, such as ERP system
integration. Instead, SMEs are likely to prioritize integrated solutions focusing on payments or
financing to leverage financial gains over automation benefits.
This trajectory is steering SMEs towards the 'Embedded Finance' market, characterized by
the incorporation of financial services within non-financial customer experiences, platforms,
or journeys. Embedded finance integrates financial products into daily digital interactions,
ranging from digital wallets to e-commerce platforms, most of which are fundamentally finan-
cial (e.g., banking, payments, lending, insurance). Originating in the US, where payments signif-
icantly drive the market, this segment is predominantly led by various payment providers. The
US market for embedded finance is projected to grow from $22 billion in revenue in 2021 to
$51 billion by 2026, with embedded B2B payments expected to quadruple from $1.9 billion to
$6.7 billion in the same timeframe [8].
Now, the integration of e-invoicing and tax compliance solutions represents an additional sig-
nificant component of embedded finance. This integration, particularly when embedded within
accounting, ERP, or eCommerce solutions, is poised to efficiently serve the SME market by
enhancing accounting software capabilities, thus streamlining the reconciliation of payments
and invoices.
April 2024 32
For larger enterprises, the evolution beyond e-invoicing involves integrating and automating
supply chain processes, including order and dispatch advisories, which promise greater sav-
ings than financial processes alone.
Ultimately, businesses of all sizes will adopt Integrated Digital Trade, merging all discussed
processes. Exceptions will exist, such as companies with a significant Business-to-Consumer
(B2C) focus prioritizing payment integration or SMEs adopting financial services early due to
B2B e-invoicing mandates. Legal mandates will also significantly impact the adoption timeline,
especially for SMEs, potentially leading to mass adoption close to mandate introductions.
Additionally, market dynamics such as Environmental, Social, and Governance (ESG) consid-
erations and Artificial Intelligence (AI) are influencing the different market segments. Subse-
quent sections will delve into these drivers more comprehensively.
3.2 Invoice Finance as Key Accelerator of Supply Chain Finance

The International Finance Corporation (IFC), a World Bank affiliate, highlights electronic in-
voicing as a pivotal technology in Supply Chain Finance (SCF) within its ‘Handbook on Technol-
ogy and Digitization in Supply Chain Finance’. E-invoicing significantly streamlines processing,
facilitates immediate triggers for acceptance and financing, and aids in data storage and anal-
ysis for understanding sales trends and forecasting future needs.
And indeed, e-invoicing and SCF exhibit a mutually beneficial relationship. E-invoices enable
efficient information capture about receivables for financing, often through automated pro-
cesses. Additionally, e-invoices offer delivery confirmation and buyer response messages, sim-
plifying invoice approval and reducing non-payment risks unrelated to buyer creditworthiness.
Automated invoice systems show a higher percentage of on-time payments compared to pa-
per-based systems. 33% of transactions with automated systems are paid on time, while only
24% of paper-based invoices are paid on time [9].
The overall global supply chain finance market is expected to grow from $6 billion in 2021 to
$13.4 billion by 2031, at a CAGR of 8.8%. The global split is approximately 55% North America,
24% Europe, 19% Asia and 2% Africa. This growth is being driven by a surge in the acceptance
of supply chain finance in emerging economies and an increase in competition in the supply
chain finance business, along with new agreements pertaining to the domain of supply chain
finance. The integration of advanced technologies like blockchain in online supply chain finance
business activities is also creating new opportunities in the market [10]. Still McKinsey esti-
mated that the SCF market only covers around 10% of its full potential. There is still much po-
tential to exploit, in particular in combination with electronic procurement and invoicing.
These figures highlight the dynamic and rapidly expanding nature of the supply chain finance
market, reflecting its growing importance in global trade and finance. Currently, two develop-
ments will further increase the usage of SCF solutions as they negatively impact the working
capital: increasing interest rates and extended late payments. The pandemic has exacerbated
late payment issues. In 2020, Italy had about 43.9% of its B2B invoices unpaid with up to 30
days delay, and France recorded a 56% delay in on-time payments. South Africa also experi-
enced a rise in late payments, with 91% of surveyed SMEs affected by late payments, averag-
ing 18 days delay [11].
Suppliers, particularly small and medium-sized enterprises (SMEs), are adversely affected by
delayed payments for their goods and services. To mitigate this issue, they are progressively
offering discounts to their clients. However, these incentives have limited impact on shorten-
ing payment terms, such as a 15-day window to avail discounts, due to the inability of many
large invoice recipients to expedite the processing of paper invoices beyond 23-25 days.
April 2024 33
A client reported a loss of discounts amounting to EUR 1.50 per paper invoice. It was observed
that the savings accrued from these discounts significantly outweigh the costs and invest-
ments associated with implementing electronic invoicing in this specific project.
Invoice Finance, a subset of SCF, leverages financing and risk mitigation to optimize working
capital and liquidity in supply chain transactions. SCF techniques, defined by the Global Supply
Chain Finance Forum, encompass various domestic and international trade finance methods.
Among the eight identified SCF techniques, four are pertinent to invoice finance: Receiva-
bles/Invoice Discounting, Factoring, Early Payments and Payables Finance.
The distinction between buyer-centric and supplier-centric SCF models is critical. Suppliers
primarily prioritize access to financing, assurance of timely payments, and the security of
guaranteed transactions. On the contrary, buyers emphasize optimizing working capital and
leveraging discounts to their advantage. It is imperative for providers to offer solutions that
cater to the distinct needs of both parties, ensuring these solutions are adaptable and suitable
for small enterprises. Additionally, the flexibility to apply these solutions selectively, tailored to
individual circumstances, is essential.
In supplier-centric SCF, suppliers directly seek financing, focusing on receivables discounting,

factoring, and loans against receivables, with the primary risk being the buyer's payment obli-
gation. Suppliers access credit against receivables due from customers as evidenced by their
outstanding invoices. Businesses pay a percentage of the invoice amount to the finance pro-
vider as a fee/discount for obtaining the funds.
Conversely, in buyer-centric SCF, buyers collaborate with financiers to enable suppliers to

discount receivables, known as Payables Finance or reverse factoring, where the main risk is
the buyer's creditworthiness. The major advantage is that is relies on an approved invoice of
the buyer which reduces the risk of fraud and disputes.
Regarding the Global Exchange Network Association (GENA), four key areas have been identi-
fied where service providers will present solutions [12]. GENA distinguishes the function of a
service provider into two distinct roles: ‘Activator’ and ‘Enabler’. In the activator capacity, a
service provider may offer invoice finance to suppliers, leveraging receivables or invoice dis-
counting. This may involve utilizing their own funding sources or collaborating with a financial
partner to provide capital. Typically, this funding is offered on a selective basis or per individ-
ual invoice, employing various methods for initiating transactions, such as automated or man-
ual selection.
April 2024 34
Conversely, the enabler role opens a second category of opportunities for service providers
in invoice finance, encompassing three areas: factoring, early payment discounts, and paya-
bles finance. In this role, a service provider might collaborate with a factoring company to fa-
cilitate transaction flow for financing by the factoring entity. They could also enable early pay-
ments for suppliers via a portal or dashboard, based on static or dynamic discounts from a
buyer. Additionally, a service provider might assist a bank or another institution in organizing a
payables finance or reverse factoring program. This would involve onboarding suppliers and
integrating invoices into the buyer’s platform. In these scenarios, the financing or discounting
is primarily driven by an entity other than the service provider.
3.2.1 Receivables/Invoice Discounting

Receivables/Invoice Discounting, an advanced supplier-focussed financial instrument, is tai-
lored for businesses that engage with a wide-ranging customer base and issue invoices on
open account terms. This process involves a business selling its accounts receivable (invoices)
to a finance provider at a discount, in exchange for immediate cash. This enables businesses
to free up capital tied in unpaid invoices, enhancing cash flow and operational liquidity.
The end-customer is afforded a set period to pay the supplier for the invoice, offering a bal-
ance between immediate cash flow needs and customer payment terms. A key feature of this
arrangement is the ability for a company to set up a 'master' invoice discounting facility. This
facility allows the selective discounting of invoices for specific customers, subject to a prede-
termined maximum value of outstanding invoices.
Focus is placed on the combined value of the discounted invoices, their inherent credit quality,
and in some cases, the availability of credit insurance to cover outstanding balances. While it's
possible to discount invoices on a one-time, selective, or 'spot' basis, such 'single invoice' dis-
counting is generally less common and often handled by banks under specialized arrange-
ments or by FinTech firms.
In this setup, all receivables represented by the discounted invoices are typically sold or as-
signed to the finance provider, conforming to the legal requirements of the jurisdictions in-
volved. This financial solution offers notable flexibility, allowing businesses to adapt their in-
voice discounting practices to their fluctuating funding requirements. It serves as a strategic
tool for managing cash flow, providing immediate access to funds while waiting for customer
payments.
3.2.2 Receivables Factoring

Factoring is a comprehensive supplier-centric financial solution for businesses, blending ele-
ments of debt financing and outsourced credit control. It involves a business selling its ac-
counts receivable (invoices) to a third party (the factor) at a discount. This method is a well-
established, supplier-focused approach to invoice financing, facilitating the mobilization of
April 2024 35
funds through a revolving portfolio of outstanding invoices. Typically, these invoices come with
predetermined payment terms, such as 30, 60, 90, or 120 days.
The factor evaluates the seller's overall business strength, the borrower's credit risk profile,
and the quality of the receivables represented by the invoices being factored. Upon approval,
the factor usually advances a percentage of the invoice value to the seller shortly after their
issuance. This advancement process, contingent on legal jurisdictions, is conducted through
the sale or assignment of the underlying receivables indicated by the invoices.
In addition to providing immediate capital, factoring offers businesses the advantage of dele-
gated credit control. The factor manages the entire process of collecting payments from the
end customers, which includes issuing reminders, managing the sales ledger, and pursuing
overdue accounts. By taking over these administrative tasks, the factor allows the business to
focus on core operations without the burden of managing credit and collections.
Upon collection of the payments, the factor deducts a fee for their services and remits the re-
maining balance to the business. This model not only improves cash flow for the business but
also transfers the risk of bad debts to the factor, thereby offering a dual benefit of liquidity
and credit risk management. Factoring is particularly beneficial for businesses looking to opti-
mize cash flow, manage credit risk, and outsource the administrative burden of credit control.
3.2.3 Early Payments/Dynamic Discounting

Early payment discounts, often referred to as cash or prompt payment discounts, are an ad-
vantageous commercial arrangement between buyers and sellers, distinct from traditional fi-
nancing methods. In this setup, buyers utilize their own liquidity to settle invoices prior to the
stipulated due date. By doing so, they benefit from a reduced payment amount, while sellers
gain the advantage of receiving funds earlier than the standard payment terms would allow.
An example of such an arrangement is the '2% 10 Net 30' term, where the buyer is entitled to
a 2% discount if payment is made within 10 days.
These discounts serve as a financial incentive for buyers to pay early and help suppliers im-
prove their cash flow. It's a win-win situation: buyers save money, and suppliers get faster ac-
cess to cash. This is particularly beneficial for suppliers, as it provides a more predictable cash
flow and reduces the reliance on external financing.
Dynamic discounting takes this concept further by introducing a flexible, variable discount
scale based on how early the payment is made. This model allows for more nuanced control
over the timing and amount of discounts, providing additional flexibility for both parties. Fi-
nance providers support these arrangements through electronic invoicing and interactive
dashboards, making the process more efficient and transparent.
Dynamic discounting allows buyers and sellers to dynamically change the payment terms to
accelerated payment based on a sliding discount scale. The buyer allocates a ‘pool’ of liquidity,
determines liquidity limits, and establishes the interest rate for early payments. Once invoices
are approved, the suppliers are automatically informed about new early-payment options.
Through the portal, suppliers can view their approved invoices and trigger payments prior to
the nominal due date, accepting the corresponding discounts.
The dynamic discounting functionality may be directly implemented as a Plug-In in the ERP or
accounting application of suppliers and buyers. Another smart way is a ‘Pay me early button’
on the buyer’s e-invoice portal (in case of direct exchange) or on the portal of the e-invoicing
network operator.
Utilizing corporate liquidity for early payments is often considered a strategic use of funds, as
it not only meets the payment obligations but also potentially yields a higher return compared
to traditional money market investments.
April 2024 36
3.2.4 Payables Finance

Payables Finance, alternatively referred to as reverse factoring, represents a buyer-centric
financial mechanism. This arrangement enables suppliers to finance their accounts receivable
monies owed for delivered goods or services. It is initiated by the purchasing entity, typically a
large organization with robust creditworthiness. This setup allows suppliers to access more
favourable financing terms, leveraging the buyer's superior credit standing instead of the
terms available through direct lending sources.
The operational framework involves a finance provider collaborating with the purchasing com-
pany to establish a master facility. This facility is then extended to a select group of the buy-
er's suppliers. Part of this arrangement may include revising the payment terms on the in-
voices issued by these suppliers. Consequently, suppliers are presented with the option to
monetize their receivables, which can be executed either through receivables assignment or
via an advance payment model.
3.3 How New Payment Solutions and E-invoicing are Combatting the Late Payment
Epidemic
3.3.1 Reasons for Late Payments of B2B and B2G Invoices
Looking at the main reasons why invoices are paid late, it becomes obvious that there is a
strong relation between e-invoicing and payments. By late payments we mean payments that
are paid later than the due date requested by the seller on the invoice. There are two main
classes of late payments under this definition:
Firstly, there are scenarios that will result in late payments that arise from actions taken by
the buyer. These could be slow and manual driven processes for approval as well as policies
regarding the scheduling of payments according to internal ‘payment runs” or imposing ex-
tended credit terms on suppliers.
Secondly, sellers may experience payment delays because of issues arising during the invoic-
ing process:
+ Invoices made out to an incorrect legal name or in the wrong legal domicile.
+ Invoices sent to the wrong address for the responsible business unit or individual.
+ Invoices contain the wrong reference data about a transaction, such as a Purchase Or-
der (PO) number.
+ Problems with the actual supply of goods and services described in the line items on
the invoice and requiring correction.
+ Incorrect classification of the goods and services for tax purposes or another problem
with respect to the tax arising in specific circumstances.
+ Inadequate information about the means of payment or destination
This incorrect information on the invoice is a major reason for delays (Asia-Pacific 25,7%,
Americas 26,3%, Europe 15,1%, Australia 21,4%). An example from Australia [13] indicates
that in 2015 only 77% of invoices had the correct legal name, 66% the correct postal address
and 58% the right business address. Sending the invoice to the wrong contact person is an-
other almost equally important reason (Asia-Pacific 19,2%, Americas 21,4%, Europe 11,6%,
Australia 21,9%).
April 2024 37
As already described in both above and in earlier chapters, payments of invoices are all too
commonly late with reference to requested due dates, the majority of which stipulate what
can be described as ‘normal’ payment terms. The average payment delay for B2B invoices is
reported [14] to be 50 days in Asia, 34 days in Western Europe and 32 days in Eastern Europe.
In North America and Mexico about 60% of all invoices are paid late. For Australia this num-
ber is about 54%.
3.3.2 E-invoicing and Regulatory Initiatives to Overcome Late Payments

Typically, supplier related causes for late payments can be overcome by introducing e-invoic-
ing as the following advantages apply:
+ The invoice is populated with static data that can be acquired and preserved in digital
form for repetitive use. This includes addressing and payment data.
+ Where supply chain automation is applied to adjacent processes such as POs and De-
livery Notes there is opportunity for internal checks at all stages of a transaction and
routine reconciliation with the ERP system.
+ Tax management can be automated and linked to the tax declaration process.
+ Electronic invoicing creates the potential for transparency, distributed working, fewer
fraud and errors, and speed of response by both the buyer and supplier.
Buyer related causes however have triggered numerous legal and regulatory initiatives to
tackle the problem. These initiatives should create a more favourable environment for small
and medium sized companies as they suffer most acutely from late payments often leading to
serious liquidity problems and even bankruptcy.
To protect European businesses, in particular SMEs, against late payment and to improve
their competitiveness, Directive 2011/7/EU on combating late payment in commercial trans-
actions was adopted on 16 February 2011 and was due to be integrated into national law by EU
countries by 16 March 2013 at the latest. The main provisions of the initiative are:
+ public authorities must pay for the goods and services that they procure within 30
days or, in very exceptional circumstances, within 60 days
+ enterprises must pay their invoices within 60 days, unless they expressly agree other-
wise and provided it is not grossly unfair
+ provision for the automatic entitlement to interest for late payment and €40 minimum
as compensation for recovery costs
+ statutory interest of at least 8% above the European Central Bank’s reference rate
However, because of unsatisfactory results experienced with existing legislation the Commis-
sion is working on a revision of the Late Payment Directive and launched a call for evidence, a
April 2024 38
public consultation and an SME panel. In March 2023 the European Innovation Council Execu-
tive Agency (EISMEA) in collaboration with the Directorate General for Internal Market, Indus-
try, Entrepreneurship and SMEs (DG GROW) of the European Commission also launched the
EU Payment Observatory. The EU Payment Observatory is a two-year initiative that should
play a crucial role delivering transparency on payment discipline at EU level and will aim to
provide SMEs with a modern and strong legal framework.
Besides those initiatives specifically focusing on late payments, the integration of payments is
becoming an important part of increasingly common e-invoicing mandates. While the specifics
can vary by country or region, the inclusion of payment messages in e-invoicing mandates typ-
ically means that the electronic invoice must contain not just details of the goods or services
provided, but also information that facilitates the payment process itself. This can include pay-
ment terms, payment instructions, and sometimes even payment status updates. Some ex-
amples of regions and countries with e-invoicing mandates that may include aspects of pay-
ment messages and data are:
+ Europe: Italy's Sistema di Interscambio (SdI) for e-invoicing can include payment infor-
mation, such as bank account details and payment terms. In their respective legislative
frameworks, Spain and France have anticipated the necessity for reporting both the
status of payments and the due dates associated with electronic invoicing processes.
Within these jurisdictions, it is mandatory for either the purchaser or the supplier to
notify their business counterpart as well as the tax authorities upon the execution or
receipt of a payment.
+ India: The Goods and Services Tax Network (GSTN) in India mandates e-invoicing for
mid-sized and large taxpayers. While the primary aim is to capture invoice details for
tax purposes, the system also allows for the inclusion of payment information, which
can facilitate the payment process.
+ Latin America: Countries like Brazil, Mexico, and Chile have some of the most ad-
vanced e-invoicing regulations globally. These systems often include detailed require-
ments for invoicing and may include payment information. For example, Brazil's Nota
Fiscal Eletrônica (NFe) system encompasses invoicing and can include payment details.
+ Saudi Arabia: The ZATCA (Zakat, Tax and Customs Authority) e-invoicing system, also
known as Fatoorah, mandates electronic invoicing and includes provisions for including
payment data within invoices.
3.3.3 Dynamic Market Developments in Payments Create New Opportunities

Payment market developments are mirroring those observed in e-invoicing and supply chain
automation, together reflecting a profound evolution in the financial transaction landscape.
This evolution is primarily attributable to technology advances, shifts in business and con-
sumer behaviour, and changes in regulatory frameworks and models.
Key global payment developments in payments are:
+ The move to electronic payments affecting all high value, commercial B2B and con-
sumer payment services. The roll out of new schemes for instant payments are at-
tracting growing volumes in Europe, North America and globally. The use of Internet
Banking is leading to retail branch closures as industry economics change and all bank-
ing services can be accessed online.
+ The explosion in card payments, debit, credit, charge, mobile and ‘virtual’ with massive
proliferation of point of sale (POS) and online infrastructure supported by enhanced
security and authentication mechanisms.
+ New regulatory models that are designed to create a more competitive landscape by
enabling non-bank players and FinTechs to provide payment services and directly
April 2024 39
compete with banks/credit institutions. Such opportunities are discussed in section 4

below.
+ An important category of new model is described as Open Banking whereby a non-
bank player has the right to securely access (with a customer’s consent) a bank ac-
count from which to launch payment and information services. This has so far proved
difficult to implement at the practical level leading to further regulatory developments
to improve the situation.
Not surprisingly, global payment revenues are generating vigorous double-digit growth in
most markets. Various forecasts predict the market will expand from between $1.6 trillion and
$2,2 trillion in 2022 to between $2.2 trillion [15] and $3.2 trillion [16] by 2027 in terms of pay-
ment-related revenues. According to these projections, commercial payment revenues ac-
count for 53% of the total market value, with consumer transactions contributing the remain-
ing 47%. This distribution varies by region, with commercial revenues dominating in the Asia-
Pacific and EMEA regions. Conversely, in North America and Latin America, consumer trans-
actions are the primary revenue source, predominantly through card transactions, accounting
for 63% and 54% of the market, respectively. However, despite the rapid adoption of elec-
tronic payments and a relative decline in the number of economic transactions paid for with
cash, some countries (especially the United States) maintain a substantial volume of transac-
tions via cash and checks, with checks comprising about 40% of transaction volumes [17] in
the United States.
The opportunities and revenue opportunities described above have led to major investments
by incumbents and the emergence of over 5,000 FinTechs [15] offering payment-related ser-
vices. Recent market developments facilitate the adoption of means of payment for recurring
and one-off ‘push’ and ‘pull’ payments operated over real-time electronic rails. Over sixty ju-
risdictions [18] have introduced the transformative availability of instant payment services, en-
abling the immediate availability of funds for small-value transactions, such as the SEPA In-
stant Credit Transfer Scheme.
Enhanced data access and standardization are enabling a diverse array of applications, includ-
ing real-time customer acquisition, faster onboarding, digital identity verification and strong
customer authentication, digital wallets, and the use of QR codes etc. Digital wallets, as both
the source and destination for large element of the instant payment volume, are experiencing
significant growth especially in certain regions.
As B2B and B2G markets embrace instant payments, the cycle of sending an e-invoice, the
initiation of the payment, and their reconciliation are also becoming a 24/7 real-time process.
April 2024 40
As customers seek enhanced user experiences and businesses demand full supply chain auto-
mation, further innovative payment solutions in ‘Embedded Finance’ and ‘Integrated Digital
Trade’ are emerging.
Market dynamics are changing, newer players are complementing head-on competition with
the creation of alliances with banks and large payment users with the objective of embedding
innovative services and access modes in their partner systems (‘coopetition’). All this activity
among FinTechs has not surprisingly prompted banks to refresh their own digital payment
services as a competitive market response.
On the horizon is the potential implementation of Central Bank Digital Currencies (CBDCs);
while still years from widespread implementation, CBDCs are under consideration by over
90% of central banks globally. The Bank for International Settlements estimates that by
2030, up to fifteen retail and nine wholesale CBDCs could be operational worldwide. The in-
troduction of these digital currencies is expected to have a considerable impact on the pay-
ments ecosystem, highlighting the importance of the design and policy decisions in their de-
velopment. CBDCs are the digital equivalent of physical cash and would create the oppor-
tunity to operate electronic payment services outside the scope of the traditional bank ac-
count.
3.3.4 Payment Solutions for New Players that Integrate Digital Payments with the E-
invoicing Process
The payments market is well established and dominated by strongly capitalised incumbents,
mainly banks and supporting infrastructural organisations such as credit card companies. The
entry of FinTechs and e-invoicing service providers into this space requires time, resources,
and carefully crafted value propositions. Such strategies are being executed through alliances
as often as not.
Based on the above discussion in earlier sections on late payments, the role of e-invoicing, new
regulatory models for payments, and rapid market developments, there are a multitude of op-
portunities available. The most compelling one of these is addressing the integration of the e-
invoicing and digital payments processes much more coherently; the relationship between in-
voicing and payment processes is self-evident, but within the Business-to-Business (B2B) sec-
tor, these functions have historically been managed as separate processes. There are chal-
lenges for larger enterprises arising from a similar separation between IT systems for ac-
counting, ERP, payment processing, and customer/ supplier databases. Integrating electronic
invoicing with accounting systems frequently leads to reduced integration with payment
mechanisms. For smaller enterprises there is a need for systems that can directly link invoice
data to the payment interfaces they use.
The Global Network Exchange Association (GENA) has identified an array of opportunities for
integrating e-invoicing and e-payments for businesses [19]. These take advantage of quite re-
cent regulatory licences. They also allow for the achievement of product capability through in-
house development or alliances.
Become a Payment Service Provider: This model offers payment services through various
regulatory licences, such as
+ the Payment Institution or Electronic Money Institution, which enable customer pay-
ment account and the offer of payment services.
+ A Payment Initiation Provider (PISP), which has the right to access customer bank ac-
counts for payment initiation services, and Account Information Provider (AISP), which
aggregates and reports consolidated information, often from different banks.
Offerings could encompass:
April 2024 41
+ The facilitation of initiating and receiving payments, enhancing the invoice to pay-
ment process.
+ A collection service for suppliers to manage multiple sales relationships.
+ Integrated account information services aiding in reconciling payments with invoices
and supporting comprehensive reconciliation processes.
+ Electronic invoice presentment and payment via web services for consolidated in-
voice management.
+ For online commerce and retail point-of-sale, instant invoicing and payment pro-
cesses could enhance the checkout experience and customer satisfaction, offering
an alternative to traditional card payments.
Request-to-Pay (RTP): This model facilitates the coordinated processing of invoices and pay-
ments without handling the payments directly. RTP offers automation and control over the
payment process for both suppliers and customers. It allows suppliers to specify the timeline
for payment acceptance and execution and includes remittance information for reconciliation.
RTP enhances the traceability of invoices and payments, linking the invoice, request-to-pay
message, agreement-to-pay message, and actual payment.
Potential use cases include:
+ For B2B, enabling large suppliers to notify customers, such as retail outlets, to fulfil
their payment obligations promptly.
+ For smaller suppliers, facilitating easy payment completion for goods and services
delivered to SME customers or consumers.
Offer Payment Integration Services: This includes the tight integration of e-invoicing with
payment flows, reconciliation, and transaction-based reporting and monitoring services ac-
cessible to customers. These services can be offered alongside the afore-mentioned services
or independently of any regulatory licence. This rather wide area is very susceptible to alliance
strategies and could involve:
+ E-invoicing service providers partnering with banks or Payment Institutes to offer

payment execution services, focusing on a comprehensive suite of services support-
ing e-invoicing integration, reconciliation, and process optimization.
+ E-invoicing service providers developing strategies to enable payment service pro-
viders, such as banks, to incorporate e-invoicing into their offerings, potentially tar-
geting the SME market.
+ Leveraging e-invoicing as a foundation for supply chain finance, where payment data
triggers invoice financing processes, combining payment services with invoice fi-
nance and facilitating credit management decisions through invoice analytics and
payment data.
3.4 E-procurement Rapidly Evolving into a Crucial Facet of Integrated Digital Trade
E-invoicing has achieved greater prominence and broader implementation across many coun-
tries compared to e-procurement. This disparity stems primarily from the fact that govern-
ments and tax authorities globally have prioritized e-invoicing, whereas e-procurement has
been primarily driven by the private sector. According to data from Eurostat [20], in 2018,
17% of businesses in the EU with ten or more employees received at least 1% of their orders
electronically.
Invoices play a crucial role in the procurement process. Many recurring invoices are linked to
open-ended contracts, such as leases or maintenance agreements. While a large volume of
goods and services are ordered through simplified means like telephone, online platforms, or
email, formally structured purchase orders (POs) are less common, comprising only 6-7% of
all invoices.
April 2024 42
Currently, the full potential for optimization in this sector remains untapped. One significant
barrier is the organizational structure within companies, where approximately 50% of pur-
chasing and finance managers operate under separate reporting lines, often with considera-
ble autonomy over their processes and digital transformation initiatives.
However, the landscape is evolving. The narrow focus on initial e-procurement and e-invoicing
processes is no longer adequate. Formerly concentrated on e-invoicing, businesses are now
progressing towards automating integrated digital trade processes. Similarly, entities initially
focused on e-procurement are expanding their capabilities to include e-invoicing. This conver-
gence is leading towards a more holistic and integrated approach, which could pose substan-
tial challenges during the transition period for many businesses and solution providers. In this
new era, procurement managers will need to engage more actively in e-invoicing projects that
are crucial for leveraging the comprehensive benefits of accounts receivable (AR) and ac-
counts payable (AP) automation.
Issue Impact of procurement managers on invoice process auto-

mation
Heterogeneous pro- + Holistic digitalisation and automation strategy
cesses and systems for
e-procurement and e-in-
voicing
Supplier management + Reducing fraud and identifying bad actors
and engagement + Considering only the master data of tax-registered part-
ners and increasing tax compliance
+ Streamlining and automating supplier interaction from on-
boarding to the processing of invoices and updating of mas-
ter data
Contract and catalogue + Avoiding invoicing with incorrect amounts, ensuring accu-
management racy of prices and compliance with synchronisations and
data validations
Discount management + Applying discounting models that can be reflected in busi-
ness process automation solutions
Fake invoices, no or in- + Establishing tax compliance processes, including evidence
complete supply behind for supplies behind invoices
an invoice
Purchase process + Increasing the proportion of electronic orders and invoices
+ Automating the matching process
Evidence for tax compli- + Storing the documents in a way they can be retrieved in the
ance same index for the entire process cycle
Procurement managers are critical in navigating the challenges and maximiz-

ing the opportunities presented by business process automation. Leveraging
their expertise in negotiation to minimize overall procurement costs, they are
transitioning into roles as comprehensive value managers. Business process
automation is a significant aspect of this transition. Consequently, enhanced
digital collaboration with both internal line-of-business leaders and external
stakeholders, including suppliers and B2B exchange platforms, will become
increasingly vital.
April 2024 43
By 2030, we anticipate significant advancements in the integration and automation of pro-

curement and invoicing processes. This progression will be further supported by public-sec-
tor initiatives throughout Europe.
3.5 VAT and Sales Tax Automation and Filing Inches Towards Integration with E-
invoicing Systems
VAT (Value Added Tax) and Sales Tax (ST) automation in relation to e-invoicing involves using
digital solutions to streamline the process of calculating, reporting, and paying taxes. This is
increasingly important as more countries adopt e-invoicing regulations to enhance tax compli-
ance and reduce fraud. Here are some key solutions and strategies for tax automation in the
context of e-invoicing:
+ Integration with Accounting Software: Implementing e-invoicing solutions that

seamlessly integrate with existing accounting or ERP (Enterprise Resource Planning)
systems. This ensures that VAT/ST calculations are automatically aligned with sales
and purchase data.
+ Real-time VAT/ST Calculation: Utilizing software that calculates VAT/ST in real-time

during the invoicing process. This helps in ensuring accuracy and compliance with local
VAT/ST rates and rules.
+ Automated Tax Compliance Checks: Implementing systems that automatically check

invoices for compliance with tax regulations. This includes verifying VAT and Sales tax
rates, tax identification numbers, and other mandatory fields.
+ Audit Trails and Record Keeping: Maintaining digital records of all transactions, in-
cluding changes and corrections, to provide a clear audit trail. This is essential for tax
audits and compliance checks.
+ Cross-border VAT Handling: For businesses operating internationally, implementing

solutions that can handle multiple VAT regimes and keep up-to-date with varying inter-
national VAT laws and rates is crucial.
+ Use of AI and Machine Learning: Leveraging AI to improve VAT/ST reporting by iden-

tifying patterns, anomalies, and potential areas of non-compliance. This can be particu-
larly useful for large businesses with complex transactions.
+ Cloud-based Solutions: Utilizing cloud-based e-invoicing and VAT/ST calculation solu-

tions for scalability, flexibility, and ensuring that the system is always up-to-date with
the latest tax rules and rates.
+ Data Analytics and Reporting: Advanced analytics can provide insights into VAT/ST
liabilities, opportunities for tax reclaim, and overall tax efficiency.
+ Supplier and Customer Onboarding: Educating and integrating suppliers and cus-
tomers into the e-invoicing platform to ensure seamless transactions and tax compli-
ance across the supply chain.
Each of these solutions plays a role in creating a robust and efficient VAT/ST management
process in the context of e-invoicing, helping businesses to comply with regulations, reduce
errors, and optimize their tax position. It's important to choose solutions that align with spe-
cific business needs and are compliant with the legal requirements in the jurisdictions where
the business operates.
April 2024 44
3.6 Emerging Technologies like Artificial Intelligence are Changing the Market
3.6.1 The Search for New Technologies Supporting Business Automation
Within the invoicing cycle, a significant portion of tasks are both repetitive and time-consum-
ing for both issuers and recipients. Despite this, at least 80% of invoices globally continue to
be processed manually. While there is some utilization of scanning technologies for key data
extraction, invoices are frequently exchanged solely in electronic formats. The validation of in-
voice data occurs on electronic invoice exchange platforms and within some processing sys-
tems, predominantly by the recipients of invoices. These procedures facilitate a decrease in
the necessity for manual intervention in exceptions, generally reducing this requirement to
approximately 20% or marginally less. How might emerging technologies further enhance the
automation of these processes?
Over the past few years, there has been a significant transition towards the adoption of cloud
services. Approximately two-thirds of European electronic invoices are currently being pro-
cessed through cloud platforms, and this percentage continues to grow. Nonetheless, in cer-
tain nations, the adoption rate remains considerably lower, though our projections indicate it
could increase to 70% by 2028. The drive towards cloud adoption is fuelled by its extensive
benefits, including reduced and more flexible costs, enhanced agility and speed, improved
change management, heightened collaboration, competitive edge, and access to cutting-edge
technologies.
Artificial Intelligence (AI) is poised to be the next major disruptor in the business landscape.
The rapid advancements in AI technology over recent years and months have demonstrated
its capacity to significantly impact the e-invoicing sector.
3.6.2 Terms and Definitions for Artificial Intelligence

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are
programmed to think and learn like humans. The goal of AI is to create systems capable of
performing tasks that would require human intelligence, such as reasoning, learning, problem
solving, perception, and understanding natural language.
AI can be categorized into different subsets, each with its own specific focus and methodolo-
gies. The major subsets of AI include:
+ Machine Learning (ML): This subset focuses on the development of algorithms and
statistical models that enable computers to perform specific tasks without using ex-
plicit instructions. Instead, they rely on patterns and inference derived from data. ML
is all about making predictions or decisions from data, thus enabling machines to im-
prove their accuracy over time as they are exposed to more data. ML is the back-
bone of many AI systems, providing the learning capability that allows these systems
to adapt to new data independently. Deep Learning is a subset of Machine Learning
and utilizes neural networks with many layers (hence ‘deep’) to analyse various fac-
tors of data. It's particularly effective for tasks such as speech recognition, image
recognition, and natural language processing.
+ Natural Language Processing (NLP): NLP is another critical subset of AI that deals
with the interaction between computers and humans using natural language. The ul-
timate objective of NLP is to enable computers to understand, interpret, and gener-
ate human language in a way that is both valuable and meaningful. NLP combines
computational linguistics—rule-based modelling of human language—with statistical,
machine learning, and deep learning models. This field enables a wide range of appli-
cations, including translation, sentiment analysis, and chatbots, by allowing machines
to process and understand human language.
April 2024 45
+ Robotic Process Automation (RPA): This is an application of technology that allows

businesses to configure computer software or a ‘robot’ to capture and interpret ex-
isting applications for processing a transaction, manipulating data, triggering re-
sponses, and communicating with other digital systems. RPA is primarily focused on
automating routine, rule-based tasks that require interaction with computer sys-
tems. This can include tasks like data entry, processing transactions, managing rec-
ords, and even responding to simple customer service queries. RPA does not re-
quire the understanding or interpretation of data in the way ML does. Instead, it fol-
lows predefined rules and workflows to automate processes. While it can be en-
hanced with AI capabilities to handle more complex tasks that require decision-mak-
ing or pattern recognition, RPA in its basic form is not about making decisions based
on data patterns but about automating repetitive tasks.
Academic studies [21][22] predict that robotic process automation (RPA) might
start a new wave of efficiency gains. Oxford University [21] speculates that many jobs
in the area of invoice processing may become automated by 2035, especially New
Accounts Clerks, Data Entry Keyers, Order Clerks, Procurement Clerks, Claims Ad-
justers, Examiners and Investigators, Bookkeeping, Accounting, Auditing Clerks,
Credit Authorizers, Checkers, Billing and Posting Clerks, Surveying and Mapping
Technicians, Bill and Account Collectors, Accountants, and Auditors. The common
feature of all these positions is a high proportion of repetitive work in the area of in-
voice processing.
+ Expert Systems: Expert Systems are a branch of AI that focuses on mimicking the
decision-making ability of a human expert. They are designed to solve complex prob-
lems by reasoning through bodies of knowledge, represented mainly in if-then rules
rather than through conventional procedural code. Expert systems are one of the
earliest forms of AI and are used in applications requiring specialized knowledge or
expertise, such as medical diagnosis, engineering, finance, and more. They rely on a
knowledge base and a set of inference rules to simulate the expertise of human spe-
cialists.
All these technologies are interrelated under the broad umbrella of AI, each contributing to
the goal of creating machines that can act and think with some degree of human-like intelli-
gence. While ML provides the learning capabilities, NLP focuses on understanding and gener-
ating human language. RPA automates routine tasks, potentially enhanced by AI to handle
more complex processes, and Expert Systems simulate the decision-making process of hu-
man experts. Together, these technologies demonstrate the diverse applications of AI and its
potential to transform industries by automating tasks, deriving insights from data, and en-
hancing decision-making processes.
‘Generative AI’ is a significant aspect of the next generation of artificial intelligence technolo-
gies. Generative AI encompasses algorithms and models that can generate new content, in-
cluding text, images, music, and even code, that is similar to human-generated content. This
field has seen rapid advancements, particularly with models like GPT (Generative Pre-trained
Transformer) for text generation and DALL-E for image generation, both developed by
OpenAI.
These advancements suggest a shift towards more creative, versatile, and autonomous AI
systems capable of performing tasks that require creativity and innovation, alongside tradi-
tional analytical capabilities. Generative AI models have applications in various domains, in-
cluding entertainment, art, design, content creation, and even scientific research, where they
can generate novel hypotheses or simulate data.
The designation of ‘next generation’ highlights the evolutionary leap in AI's capabilities, moving
from systems that primarily analyse and interpret existing data to those that can create new,
original outputs.
April 2024 46
3.6.3 The Role of Artificial Intelligence within the E-invoicing Process

Artificial intelligence (AI) plays a significant role in enhancing and streamlining the e-invoicing
process. The integration of AI technologies with e-invoicing systems offers several benefits
and opens up numerous future possibilities. Here’s a breakdown of the current applications
and potential future uses:
Current Applications
+ Automated Data Capture and Entry: AI algorithms are capable of extracting data
from various invoice formats automatically, reducing the need for manual data entry.
This not only speeds up the process but also minimizes errors.
+ Fraud Detection: By analysing patterns and anomalies in invoicing data, AI can help
identify potential fraud. This includes detecting duplicate invoices, irregular transac-
tions, and other suspicious activities that might indicate fraudulent behaviour.
+ Compliance Monitoring: AI systems can be trained to understand and monitor com-

pliance with local tax laws and regulations related to invoicing. This helps businesses
stay compliant and avoid penalties.
+ Process Optimization: AI can analyse invoice processing workflows to identify bottle-

necks and inefficiencies, suggesting improvements or automating certain steps to
enhance overall efficiency.
+ Predictive Analytics: By analysing historical invoicing data, AI can provide insights

into future trends, such as predicting cash flow issues or identifying opportunities for
early payment discounts.
Possible Future Applications
+ Enhanced Natural Language Processing (NLP): Future advancements in NLP could

enable AI systems to understand invoices written in natural language, further reduc-
ing the need for human intervention in data extraction and processing.
+ Smart Contracts Integration: Integrating AI with blockchain technology and smart

contracts could automate the entire invoicing and payment process, making trans-
actions more secure, transparent, and efficient.
+ Dynamic Pricing Models: AI could enable dynamic pricing strategies where the in-
voicing system adjusts prices in real-time based on demand, availability, customer
relationship, and other factors.
+ Autonomous Dispute Resolution: AI systems could handle disputes over invoices by

analysing contract terms, service delivery proofs, and communication between par-
ties, suggesting or even implementing resolutions without human intervention.
+ Predictive Supplier and Customer Management: AI could predict supplier or cus-

tomer behaviours, such as risk of late payment or likelihood of order cancellation, al-
lowing businesses to proactively manage relationships and finances.
+ Global Tax Compliance: As businesses expand globally, AI could help manage the
complexity of adhering to diverse tax laws and invoicing regulations across different
countries, automatically updating systems as laws change.
April 2024 47
The integration of AI into e-invoicing represents a significant step towards digital transfor-
mation in finance and accounting. As AI technologies evolve, they will continue to revolutionize
the invoicing landscape, making processes more efficient, secure, and user-friendly.
3.6.4 Blockchain: Integrating Conventional and Decentralised Financial Systems

In the 2019 billentis report, the future impact of blockchain technology was still uncertain—
potentially a pivotal innovation or merely a fleeting trend. However, developments since then
have signalled its increasing acceptance and integration into mainstream finance. Notably, in
January 2024, the U.S. Securities and Exchange Commission approved several Crypto-ETFs,
enhancing their appeal to institutional investors [23]. Earlier, in May 2023, the European Par-
liament ratified the Markets in Crypto-Assets Regulation (MiCA), establishing a regulatory
framework across Europe that promotes the innovative use of crypto-assets while ensuring
financial stability and protecting investors. Furthermore, the introduction of the pan-Euro-
pean Blockchain Regulatory Sandbox in 2023 has facilitated ongoing dialogue between block-
chain practitioners and regulators, aiming to resolve pertinent legal and regulatory issues
[24]. These initiatives collectively demonstrate a committed trajectory for the evolution of
blockchain technology.
Despite these advances, the journey has encountered obstacles. In 2023, the TradeLens joint
venture, a blockchain-enabled digital platform for global trade launched by IBM and A.P.
Moller-Maersk in 2016, was discontinued due to financial untenability. Concurrently, similar
blockchain-based trade finance platforms, we.trade and Contour, also ceased operations, fol-
lowed by the insolvency of the Marco Polo Network in 2023.
Nevertheless, the institutional perspective on blockchain remains positive. A prime example is

the ‘safe Financial Big Data Cluster (safeFBDC)’ project, supported by the German Federal
Ministry for Economic Affairs and Climate Action. As part of this initiative, Fraunhofer Institute
for Material Flow and Logistics IML, has developed blockchain applications that enhance sup-
ply chain financial resilience and efficiency. These applications use smart contracts for auton-
omous invoicing and tokenize trade receivables, which facilitates sophisticated invoicing pro-
cesses, programmable payments, and the foundation for AI-enhanced financial analysis and
risk management [25].
As the technology and its regulatory environment mature, blockchain’s role in asset tokeniza-
tion is poised to significantly alter financial market infrastructures. Tokenization makes both
tangible and intangible assets tradable on blockchain via smart contracts, encapsulating own-
ership in digital form. This innovation is pivotal to the rise of Decentralized Finance (DeFi),
which offers an accessible, open financial system through decentralized networks. DeFi repli-
cates traditional financial services such as lending, exchanges, and insurance, utilizing smart
contracts executed by blockchain networks to maintain integrity and global synchronicity
[26]. The assets managed in DeFi smart contracts surged from under $1 billion in early 2020
to over $45 billion by the end of 2023 [27].
The synergy between asset tokenization and DeFi is set to drive forward the adoption of
blockchain, enhancing the stability and liquidity of the crypto ecosystem with secure, real-
world collateral. This integration is essential for the advancement of decentralized blockchain-
based financial systems and will play a crucial role in future blockchain-enabled business eco-
systems. Properly structured electronic invoice information remains a critical component for
all related applications, ensuring efficient operation and compliance in this evolving space.
3.7 Organisations Boost Environmental, Social and Governance (ESG) Performance

through Strategic E-invoicing Transition
Environmental, Social, and Governance (ESG) constitutes a paradigm through which investors
and corporations assess the operational impact of a business within the broader environmen-
tal and societal frameworks. Electronic invoicing significantly enhances the ESG values, align-
April 2024 48
ing with overarching objectives of sustainability and ethical corporate conduct. While the envi-
ronmental advantages are the most apparent, e-invoicing also substantially contributes to so-
cial and governance improvements. Consequently, organizations may leverage the transition
to e-invoicing as a strategic measure to bolster their ESG performance and reporting.
The environmental implications of invoicing are significantly influenced by considerations

surrounding their carbon dioxide (CO2) emissions. The assessment of a paper invoice's CO2
footprint necessitates a comprehensive analysis encompassing the entire lifecycle of the in-
voice, from paper production through to its final delivery to the recipient. Key factors include:
+ Invoice Production:
• Paper Type: The use of recycled paper is associated with lower CO2 emissions in
comparison to virgin fiber paper.
• Energy Source: Employing renewable energy sources, such as wind or solar, dur-
ing the manufacturing process markedly diminishes the CO2 footprint relative to
the utilization of fossil fuels.
• Manufacturing Efficiency: Advanced, efficient manufacturing facilities are capable
of reducing energy consumption and consequently, CO2 emissions.
• Materials: The environmental impact assessment extends beyond the paper it-
self to include related materials such as envelopes and stamps.
• Number of Sheets: The average number of sheets per invoice also affects the
CO2 calculation. This average can fluctuate based on the customer type (Busi-
ness-to-Business (B2B) vs. Business-to-Consumer (B2C)) and varies across dif-
ferent sectors (e.g., telecommunications/utilities vs. industry). It is posited by
various stakeholders within the e-invoicing sector that the average is approxi-
mately 2.5 pages per invoice.
+ Printing of invoices:
• Digital Printing Efficiency: Employing digital printing techniques can enhance effi-
ciency over conventional printing methods, particularly for smaller quantities.
• Ink Selection: The environmental impact, including the carbon footprint, is influ-
enced by the choice of ink, such as oil-based versus water-based. The environ-
mental detriment arises from the harmful chemicals in printer ink, the non-de-
gradable plastic components, and petroleum oil in some ink and toner cartridges,
leading to significant pollution when they reach the end of their lifecycle. Often
disposed of in landfills or aquatic environments, these cartridges release toxic
metals and volatile organic compounds (VOCs), causing extensive soil and water
contamination. Presently, less than 30% of these cartridges are recycled [28].
+ Invoice Processing and Administration:

• Efficiency of Office Appliances: Utilizing energy-efficient machinery for invoice
preparation tasks like folding, enveloping, and sorting can contribute to the re-
duction of carbon emissions.
• Administrative Energy Use: The energy expended in the invoicing process, partic-
ularly through computer systems, and the additional time required for pro-
cessing paper invoices, should be factored into the carbon footprint calculation
of the personnel involved.
+ Transportation and Delivery:

• Transportation Method: The choice of transportation, with air freight markedly
increasing carbon emissions in contrast to alternatives like trucks, trains, or
ships.
• Transportation Distance: Carbon emissions are also dependent on the distance
between the printing facility and the invoice recipient.
April 2024 49
• Delivery Efficiency: Enhancing the efficiency of the last-mile delivery, especially in

urban areas through the use of low-emission vehicles (for instance, electric cars
or bicycles), can mitigate emissions.
+ Disposal and Recycling:

• Recycling Practices: The potential for recycling used paper can significantly de-
crease the overall carbon footprint of an invoice, as recycled materials necessi-
tate fewer resources for the production of new paper goods.
• Disposal Methods: The technique employed for the disposal of paper invoices
(e.g., landfill versus incineration) influences the carbon balance.
• Digital Archiving: Adopting electronic invoicing eliminates the need for physical
archiving, thereby saving on the energy and space required for storage.
Determining the exact carbon dioxide (CO2) footprint of a paper invoice requires a compre-
hensive analysis of various factors, encompassing the emissions from production, printing,
shipping, and disposal processes. Given the complexity of quantifying several of these ele-
ments, numerous studies have concentrated solely on the emissions saved by foregoing pa-
per.
The CO2 emissions associated with producing one kilogram of paper can significantly fluctu-
ate based on the paper type, raw material sources, manufacturing process, and the energy
utilized during production. Typically, paper production entails tree harvesting, transportation,
pulping, paper manufacturing, and, in some cases, recycling—each phase adding to the total
CO2 emissions.
The carbon footprint of paper is commonly estimated to range from 1.45 kg to 3.6 kg of CO2
per kilogram of paper, reflecting the diversity in production techniques. Recycled paper gen-
erally exhibits a lower carbon footprint compared to virgin fibre paper. The lower end of this
spectrum is indicative of modern, efficient, and environmentally friendly production methods
that often leverage renewable energy and a greater proportion of recycled content. Con-
versely, the higher end may reflect less efficient production methods, reliance on fossil fuels,
and the use of virgin wood fibres.
Adopting a conservative estimate of 2 kg CO2 per kilogram, the CO2 footprint for a single
20g paper invoice would be approximately 40g. This figure acknowledges that the CO2 foot-
print from electronic invoicing is not sufficient to offset the emissions from printed invoices
other than paper production (including transport, ink, archiving), thus maintaining the 40g
CO2 estimate as a cautious approach.
Furthermore, the conservation of paper also contributes to the preservation of trees, which
are capable of sequestering additional CO2. On average, a mature pine tree, commonly uti-
lized in paper production, can yield about 8,333.3 sheets of standard office paper [29]. How-
ever, this simplistic calculation does not account for the complete lifecycle of paper produc-
tion, including yield loss during processing, the incorporation of recycled paper, and variances
in tree size and type. Therefore, the actual figures may significantly differ. Assuming an invoice
uses an average of 2.5 pages, approximately 3,000 invoices equate to the usage of one tree.
The capacity for CO2 absorption by a single tree is highly variable, influenced by the tree's
species, age, environment, and health. A general estimate from the United States Department
of Agriculture (USDA) suggests that a mature tree can absorb about 22 kilograms of CO2 an-
nually. This average acknowledges the variability in absorption rates due to the previously
mentioned factors. Based on this, 3,000 invoices, each comprising 2.5 sheets of paper, would
result in the absorption of approximately 22 kg of CO2 annually. Assuming a minimum lifespan
of ten years for a mature tree prior to harvest, this equates to an absorption of 80 grams of
CO2 per invoice.
April 2024 50
The implementation of electronic invoicing offers numerous social advantages, particularly

benefiting Small and Medium Enterprises (SMEs) in the following ways:
+ Accessibility and Inclusivity: E-invoicing enhances accessibility for individuals and

businesses globally, including those in remote or underserved regions. It facilitates
quicker and more efficient transactions, bolstering the economic sustainability of
SMEs and potentially aiding in broader economic growth.
+ Transparency and Traceability: Electronic invoices offer superior tracking and stor-
age capabilities compared to traditional paper invoices, enhancing transactional
transparency and facilitating easier audits and verification processes. This improve-
ment aids in combating fraud and ensures adherence to regulatory standards, bene-
fiting all parties involved.
+ Financial Efficiency: E-invoicing introduces significant financial benefits. Primarily,

electronic invoices tend to be settled 5-7 days sooner than paper invoices, diminish-
ing the need for external financing. This is particularly crucial for SMEs, which often
face challenges in accessing financial resources. Additionally, the advent of new In-
voice Finance solutions, such as those allowing for the financing of individual invoices
and those not requiring a historical financial track record as they are based on ap-
proved invoices, simplifies and accelerates the financing process, making it less bu-
reaucratic and more accessible.
+ Impact on the Shadow Economy: As outlined in previous chapters, the initiation of

tax reporting mechanisms significantly boosts a country's tax revenue. This increase
in revenue benefits society as a whole by potentially reducing the size of the shadow
economy.
E-invoicing significantly enhances governance benefits across several dimensions:
+ Compliance and Standardization: It streamlines adherence to regulatory frame-

works by simplifying compliance with tax laws and invoicing standards. As many juris-
dictions increasingly mandate e-invoicing for tax purposes, electronic systems offer
April 2024 51
the flexibility to promptly adapt to legislative amendments, ensuring that governance

standards are consistently upheld.
+ Improved Internal Controls: The integration of e-invoicing systems bolsters internal

oversight of financial transactions. By automating invoice processing and reconcilia-
tion, it diminishes the likelihood of inaccuracies and fraudulent activities, thus ensur-
ing more reliable financial reporting.
+ Enhanced Efficiency and Accountability: E-invoicing enables organizations to opti-

mize their invoicing procedures, reduce administrative burdens, and enhance ac-
countability. This automation not only leads to more efficient operations but also
promotes a culture of transparency and responsibility within enterprises.
+ ESG Reporting Enhancement: An increasing number of companies are mandated to

conform to ESG reporting standards. While in the UK and US, this requirement pre-
dominantly applies to capital market participants, the European Union's Corporate
Sustainability Reporting Directive (CSRD) extends it to nearly 50,000 companies
from January 2024. The CSRD aims to bridge the gaps in existing reporting frame-
works and broaden the scope of sustainability reporting, marking the introduction of
compulsory reporting standards at the EU level for the first time, thereby elevating
the accountability of European businesses in sustainability matters.
The implementation of e-invoicing is particularly pivotal in this context, especially as

it pertains to the intricate task of ESG reporting, which becomes significantly more
demanding for SMEs. Reporting on scope 3 emissions, which necessitates integrat-
ing supplier data, presents a notable challenge. E-invoicing stands out as a crucial
tool in this regard, potentially providing essential data, including the Product Carbon
Footprint and Scope 1, 2, and 3 emissions according to the Greenhouse Gas Proto-
col. Should such information be incorporated into the European standard for e-in-
voicing, companies could leverage an established process to extract all requisite
data, facilitating comprehensive reporting across various supply chain levels.
April 2024 52
4. The Global Market

4.1 Invoices and Electronic Invoice Penetration in 2024
4.1.1 Total Volume of Bills and Invoices
The issuance of both paper-based and electronic bills and invoices across Europe and Latin
America has been systematically recorded over multiple years. Recent disclosures of data
from credible entities regarding China, coupled with robust signals from the Russian market-
place, have enabled a fairly precise estimate of transaction volumes within the Asian sector.
Estimations for the volumes pertaining to additional global areas have been meticulously de-
rived through the application of critical metrics from the previously mentioned world regions.
Estimate for global bill/invoice volume 2024:
Globally, the average distribution of bills/invoices, as strictly defined legally, is about 70 per
individual per year. Although metrics vary widely by region, an overall upward trend is evident.
It is projected that roughly 50% of this volume relates to service supplies, with the balance
being attributed to the exchange of physical supplies.
Within the broader legal framework, the proliferation of documents resembling invoices, often
referred to as ‘invoice-like documents and messages’, including receipts, can vastly outnum-
ber traditional invoices, potentially by a margin of 5 to 15 times, with variations depending on
the jurisdiction. We are receiving progressively accurate volume data from Latin America;
however, comparable statistics from other regions remain unavailable. Consequently, we are
referencing this range broadly in the document but have excluded these figures from the data
presented in this chapter.
4.1.2 Maturity and State of Play of Electronic Invoices

Market maturity differs across continents and within the countries of each continent.
Expected status for all bill/invoice streams - B2B, B2G, G2B, B2C and G2C -
Digitally issued by suppliers & received by buyers
April 2024 53
The terminology ‘Laggards’ depicted in the preceding chart should not be construed as indic-
ative of a complete absence of e-invoicing initiatives in these nations. Rather, it signifies that
these countries are generally at a nascent phase or are presently concentrating on specific
invoicing channels. The classification ‘Developing’ refers to nations that have initiated e-invoic-
ing practices, usually within the B2C domain and/or involving Electronic Data Interchange
(EDI) among larger enterprises.
Worldwide, billentis expects a total volume of 125 billion by 2024, of which 90 billion
will be e-invoices and the remaining 35 billion will be e-receipts.
April 2024 54
4.1.3 Regions Diverge in Focus: Tax Optimization and Trade Automation Trends Vary
Globally
Numerous parallels exist in the utilization of invoices globally. The endeavour to adopt elec-
tronic invoicing and persuade trading entities presents a similar challenge. Nonetheless, sig-
nificant disparities arise from diverse legislation, languages, cultures, and the current empha-
sis on optimization. While not universally applicable across all countries and organizations, it
has been determined that the focus on optimization can generally be summarized as follows:
Focus Description
1 Africa, Asia, LATAM and some European countries: Tax authorities are initiating
nationwide initiatives focused on minimizing tax evasion. These require taxpayers
to submit either detailed invoice data or, at the very least, electronic invoice ex-
tracts for validation and audit purposes.
In a departure from conventional paper-based methods, tax authorities are creat-
ing and instituting an entirely new framework. This introduces a CTC system for
trading entities, which is relatively complex. While this transformation may not im-
mediately enhance the efficiency of companies' internal invoice processing or the
electronic collaboration between suppliers and buyers, it significantly simplifies
and improves the process of VAT declarations and tax filings.
2 North America up today: Large and medium-sized enterprises primarily focus on
optimizing their internal processes. Automation of Accounts Receivable and Ac-
counts Payable, along with Trade Finance and Working Capital Management, are
key areas of concentration. However, the market is progressively maturing, mak-
ing it a ripe time to prioritize focus area three.
3 Major parts of Europe, Japan, Southeast Asia, Pacific Region and increasingly
the U.S.: Traditional invoicing and processing techniques have not been subjected
to rigorous examination; instead, they have been substituted with an equivalent
functional digital alternative. Where necessary, either a portion or the entirety of
the invoice details may also be shared with tax authorities.
April 2024 55
Despite the market remaining considerably segmented, the strategy within Eu-
rope is characterized by a comprehensive and unified approach, underpinned by a
pronounced willingness to cooperate among all involved parties. Furthermore,
previous investments in business process automation are safeguarded.
In the long term, suppliers, purchasers, and tax authorities universally seek advantages
through electronic invoicing. This dynamic fosters an environment where continents may mu-
tually benefit from shared best practices and adopt superior components from one another.
Presently, there is significant momentum toward the adoption of the 5-corner model across
numerous countries in Europe, the Middle East, and Southeast Asia. This movement stems
from the belief that the solution should not only address the requirements of tax authorities
but also establish a foundational framework for the comprehensive automation of Integrated
Digital Trade.
4.2 Global Progress in the Adoption of Electronic Invoices and Receipts

4.2.1 Africa
Electronic Data Interchange (EDI) is gaining prominence within industries characterized by
high volumes, such as retail, for the purpose of exchanging commercial invoices and other
business communications. This adoption seeks to enhance automation and reduce operational
costs. Nevertheless, adoption rates remain relatively low.
A significant challenge in many African regions involves generating tax-compliant invoices via
electronic means following each sales transaction.
It's critical to acknowledge the limited digital infrastructure within these regions. Nonetheless,
mobile devices are emerging as a viable foundation for many African countries, with notable
acceptance within the Small and Medium Enterprise (SME) sector and amongst consumers.
Digital finance and electronic point-of-sale (POS) invoicing are perceived as the most viable
strategies to boost e-invoicing adoption in the African mass market. Mobile phone adoption
stands at approximately 60%, while internet penetration is around 36%. Beyond mobile appli-
cations, cloud-based platforms also offer a solution for generating invoices.
The VAT compliance gap in Africa is close to 50%, as reported by the United Nations Eco-
nomic Commission for Africa [30]. Consequently, approximately one-fourth of African coun-
tries have initiated or implemented electronic oversight mechanisms for business transac-
tions. This starts with the fact that companies have to record all business transactions digi-
tally internally. This creates the basis for transmitting relevant data to the authorities for re-
porting purposes. Reporting requirements often begin with transaction data generated by
electronic or virtual financial devices.
Egypt is at the forefront in Africa regarding the implementation of e-invoicing and e-receipts.
In recent years, Egypt has developed a central government platform for B2B e-invoicing and
has progressively introduced it across the business sector. This system imposes stricter re-
quirements than many other platforms abroad, necessitating Global Product Code classifica-
tion for invoice content and digital signatures verified by hardware-based certificates. Fur-
thermore, suppliers are required to generate e-receipts with QR Codes at the point of sale
and submit this data to the tax authority.
The drive to combat tax fraud remains a primary motivator for the digital transformation of
invoice and receipt processing in African nations. It is anticipated that an additional 25 African
countries will implement Continuous Transaction Controls (CTC) systems by 2030.
4.2.2 The Asia and Pacific Region

Leaders in the field, such as Kazakhstan, Singapore, South Korea, Taiwan, and Turkey, have al-
ready achieved significant market adoption rates. Following their footsteps, India, Indonesia,
April 2024 56
Russia, Thailand, and Vietnam have embarked on nationwide initiatives. Simultaneously, vari-
ous nations are either launching new endeavours or broadening the scope of their existing
electronic invoicing and tax reporting projects to encompass additional user demographics.
Australia and New Zealand are vigorously advocating for electronic invoicing across a wide
spectrum. These nations are advancing e-invoicing as a component of the Single Economic
Market agenda, which is designed to enhance productivity and decrease business operational
costs for both the government sector and the industry, through the establishment of an in-
teroperable single digital economic market based on the Peppol interoperability framework.
The majority of government agencies are now equipped to handle e-invoices. Moreover, both
countries are proactively promoting e-invoicing within the B2B sector, with a B2G mandate
also anticipated in the foreseeable future.
China, the nation with the highest volume of invoices, sees over 200 billion invoices generated
annually, as per local reports. In 2021, a national service platform for electronic tickets and
unified invoices was inaugurated. The introduction of the fully digitalized special e-fapiao rep-
resents the Chinese government's latest initiative towards the digital enhancement and intelli-
gent overhaul of tax collection and administration processes, aiming to lower the cost of tax
management. By the end of 2023, all Chinese provinces had rolled out their e-fapiao pro-
grams, setting the stage for enterprises to eliminate paper invoices and streamline their in-
voice processing workflows. A nationwide B2B mandate is expected by 2025.
The Gulf region is poised to become a global focal point for CTC and e-invoicing projects in
2024 and 2025. In 2024, Saudi Arabia is continuously extending its e-invoicing mandate to en-
compass companies with revenues ranging from SAR 25 to 30 million (approximately 6.2 to
7.4 million Euros). The governments of Bahrain, Jordan, Oman, and the UAE are also advanc-
ing their respective projects.
In recent years, India has expanded its e-invoicing mandate. Companies with revenues ex-
ceeding INR 50 million (approximately 0.55 million Euros) are now mandated to submit B2B e-
invoices to the Goods and Services Tax Network (GSTN). It is anticipated that this require-
ment will extend to B2C invoices by 2026 or 2027.
Since July 2016, nearly all taxable entrepreneurs in Indonesia are obliged to issue their VAT
invoices (Faktur Pajak, FP) electronically and complete tax payments exclusively online. On the
purchasing side, the received e-invoice must be validated either through the VAT input fea-
ture in the e-invoice application or by scanning the invoice's QR code. Nonetheless, it is com-
mon practice for many buyers to request a paper version of the Faktur Pajak from suppliers
before proceeding with payment, ensuring that the Faktur Pajak has been duly reported to the
Indonesian tax authority.
In 2023, Japan introduced a new so-called Qualified Invoice System, facilitating the accelera-
tion and automation of business processes. The 'E-Invoice Promotion Association' (EIPA) was
established with the goal of developing and promoting a standardized e-invoicing interopera-
bility framework based on Peppol, leveraging the usage of the qualified invoices.
The Malaysian government has imposed centralised e-invoicing CTC mandates for B2B, B2C,
and B2G transactions, with a phased implementation commencing in the second half of 2024.
By mid-2025, all taxpayers are expected to fall in the obligation. In parallel MDEC (Malaysia
Digital Economy Corporation) has been given the responsibility to define local Peppol specifi-
cations and technical standards and to accredit Peppol service providers and Peppol-ready
solution providers, in order to foster the commercial uptake of e-invoicing in Malaysia. In addi-
tion the agency is overseeing compliance with the overall framework.
Pakistan is in the process of introducing a combination of centralized e-invoicing and fiscal

systems or registers for B2B and B2C invoicing, respectively [31].
April 2024 57
During a pilot phase in 2022, approximately 100 large taxpayers in the Philippines partici-
pated in testing the e-invoicing/e-reporting program, which is modelled after South Korea’s e-
Tax invoice system.
4.2.3 North America

In the business-to-business (B2B) and business-to-government (B2G) sectors, the strategies
and goals widely vary from those observed in European and Latin American contexts. Pres-
ently, U.S. companies are prioritizing the enhancement of internal processes, specifically in the
areas of 'order-to-cash and accounts receivable (AR) automation' along with 'purchase-to-pay
and accounts payable (AP) automation'. Research indicates that the United States has moved
beyond the initial stages of adopting electronic invoicing, with a growing interest in this area.
Because the U.S. does not have VAT, but a sales tax system, invoices are not considered any
different from other business documents. This has delayed the acknowledgment of the bene-
fits provided by e-invoicing network operators within the U.S. market. However, a steady in-
crease in the number of such operators is now anticipated. International corporations operat-
ing in the U.S. are mandated to adhere to local regulations, often engaging third-party service
providers for compliance.
There is a scarcity of surveys that include or relate to e-invoicing, with most concentrating on
the AP aspect and largely targeting significant enterprises.
The findings from various sources for larger corporations are summarized as follows:
+ Approximately two-thirds of businesses send invoices as PDFs via email, but less than
20% dispatch structured e-invoices through Electronic Data Interchange (EDI). Major
suppliers are either willing or obliged to transmit electronic files in the format pre-
ferred by their customers, establishing connections on an individual basis. These sup-
pliers do not show a preference for any particular network, being part of many.
+ Over half of the invoices are still received in unstructured formats, such as paper or
PDF, making the extraction of data from machine-readable PDFs increasingly popular.
+ Supplier portals have been established.
+ Commercial Cards, including purchasing cards, ePayment, and virtual cards, are exten-
sively used for high-volume, low-value purchases, with a moderate trend of increase
and expansion into high-value transactions.
+ The use of third-party services, such as e-invoicing networks or Software as a Service
(SaaS) platforms, is growing, offering substantial cost savings over significant in-house
investments.
+ There is a noticeable trend towards invoice financing and novel payment solutions.
It is important to note, however, that the majority of U.S. businesses employ fewer than 500
people, and their practices and preferences are not adequately represented in findings as
mentioned above. Should the market trends align with those in other countries, a significant
surge in the adoption of third-party cloud services is anticipated.
Outside of North America, tax authorities and the public sector play a significant role in driving
e-invoicing adoption, a trend not as prevalent in North America despite the U.S. Federal Ad-
ministration's previous announcement of an e-invoicing mandate. Following a pilot program
that evaluated the advantages and feasibility of e-invoicing within the public sector, the Office
of Management and Budget issued a directive for federal agencies to transition to electronic
invoicing. The goal was for these agencies to start processing all invoices electronically by the
end of the 2018 fiscal year. Although digitalization has begun within federal administration, it
has yet to significantly influence B2B e-invoicing as seen with B2G mandates in Europe.
To facilitate the increase in B2B efficiency, the Federal Reserve initiated a program aimed at
boosting e-invoice adoption across U.S. businesses of all sizes. This initiative led to the estab-
lishment of the DBNA.
April 2024 58
The market evolution in Canada mirrors that of the U.S.
4.2.4 Latin America

Chile is recognized as the foundational model for market development in Latin America, serv-
ing as a pivotal influence on regional market structures. Brazil and Mexico, as early adopters,
have seen some markets surpass Chile, attributed to their rigorous enforcement of electronic
invoicing regulations. Concurrently, the vast majority of Latin American nations are undergo-
ing swift evolution in this arena.
The Argentine tax authority, AFIP, instituted a compulsory e-invoicing mandate across all
economic sectors in the spring of 2019, marking a significant shift towards the obligatory
widespread adoption of e-invoicing through the Electronic Invoice Issuance System (RECE)
from April 2019.
Brazil mandates e-invoicing for all businesses, with approximately 2.1 million entities issuing e-
invoices for goods, a testament to the effective implementation of these requirements years
prior. Brazil's innovation extends to retail users through the NFC-e project, offering an elec-
tronic solution alternative to traditional fiscal printers. This project aligns with Brazil's broader
commitment to electronic reporting and auditing, increasingly incorporating comprehensive
tax-relevant documentation and operational tracking.
Chile was and still is a very innovative country. After several years of following a voluntary ap-
proach, the tax authority meanwhile declared electronic invoicing as mandatory for all busi-
nesses. Where it is not uncommon to declare the issuance of e-invoices, Chile is more ad-
vanced than the average also to consider the receipt of e-invoices. In 2018, the government
also launched an innovative mobile app that permits the issuance and validation of e-invoices.
Bolivia initiated its VAT e-invoicing rollout in 2021, with successive taxpayer groups being in-
corporated in 2024 and 2025.
Colombia began its e-invoicing mandate for large businesses in 2018, entering a transitional
phase in 2019-2020, culminating in a requirement for all businesses to issue pre-validated
electronic sales invoices from August 2020.
Mexico leads globally in the digitization of tax-relevant processes, exchanging approximately

10 billion e-invoices annually. It has expanded its digital efforts to include mandatory e-ac-
counting for businesses and individuals, significantly reducing tax evasion through compre-
hensive digital tracking and reporting.
Peru's approach to e-invoicing aligns with international standards, facilitating integration with
European Union and APEC trading partners. Its system resembles Brazil's, incorporating ship-
ping documents into its electronic invoicing process.
In Latin America, governmental initiatives primarily drive market activities towards e-invoic-
ing, aiming to reduce tax evasion through immediate or near-immediate invoice validation. De-
spite stringent legal requirements, several Latin American countries have emerged as global
leaders in e-invoicing adoption, inspiring nations abroad.
Key characteristics of electronic invoicing practices within Latin American countries include:
+ Mandatory allocation of unique and sequential invoice numbers (folios) by the tax au-
thorities.
+ Utilization of digital signatures, authenticated through certificates issued by recog-
nized or government-operated Certification Authorities.
+ Enforcement of standardized XML formats for obtaining clearance from the tax au-
thorities.
April 2024 59
+ Compulsory submission of reports to the tax authorities, which must be done in real-
time before the invoice is issued or, at the very least, on a monthly basis.
+ Inclusion of traditional invoices and other fiscal documents such as credit notes, debit
notes, and receipts (also referred to as ‘boletas de ventas’ or ‘tickets’) in the e-invoic-
ing system.
+ Enhanced integration with the physical supply chain, including the simultaneous print-
ing of auxiliary transportation documents based on a pre-authorized invoice.
+ Upon reviewing and approving suppliers' invoices, tax authorities may apply a visible
'stamp' on the generated PDF invoices. This 'stamp' could be a country-specific alpha-
numeric code or a barcode/QR code. Alternatively, a verifiable electronic token, such
as a digital signature, might be added to the structured invoice file.
+ Invoice recipients are frequently required to verify that the invoice has been pre-ap-
proved by the tax administration.
+ Tax authorities either validate invoice data in real-time or employ data-mining tech-
niques for subsequent invoice verification.
+ A general requirement for the archiving period of invoices is set at five years.
Service providers play a crucial role in facilitating these regulated functions, with many oper-
ating across multiple Latin American countries and processing significant invoice volumes.
These providers not only comply with local regulations but are also expanding into the Ameri-
can and European markets.
4.2.5 Europe
At the turn of the millennium, legislative frameworks across nearly all European nations had
already embraced electronic invoicing, leading to an accelerated adoption of e-invoicing by
businesses, surpassing adoption rates in other global regions.
European Union regulatory bodies primarily focused on eliminating legal barriers to e-invoic-
ing, initiating standardization projects, establishing the Peppol interoperability framework, and
advancing Business-to-Government (B2G) e-invoicing. In this context, approximately
300,000 public entities were mandated a few years back to upgrade their systems and work-
flows in order to accommodate standardized e-invoices. Subsequently, several nations have
progressed to mandating e-invoicing for transactions with the public sector by suppliers.
Current developments like ViDA are aimed at combating VAT fraud within the EU through fu-
ture reporting of invoice data to tax authorities. This measure also seeks to streamline busi-
ness processes for taxpayers across a diverse and international context, a notable challenge
given the distinctive composition of the European market. The complexity of the European
market is underscored by its:
+ Over 40 countries, including 27 European Union members,

+ More than 40 legal frameworks,
+ Over 100 languages, and
+ In excess of 22 million Small and Medium-sized Enterprises (SMEs).
The fragmented market structure has posed significant challenges for companies, leading to a
preference for utilizing cloud services or external service providers for e-invoice processing
and Business-to-Business/Government (B2B/B2G) exchange. Currently, approximately 1,000
service providers are operational within Europe, handling over more than half of all B2B/B2G
e-invoice transactions. The volume of e-invoices processed through these providers has seen
a higher growth rate than direct data exchange for about the past five years, a trend expected
to notably increase in the forthcoming years.
April 2024 60
Regulatory bodies aim to safeguard the investments made by taxpayers and service providers
while accommodating the current landscape. Their initiatives significantly contribute towards
achieving mutually beneficial outcomes for both tax authorities and taxpayers. There are es-
tablished standards for electronic invoicing and interoperability networks for the transmission
of business messages such as GENA and Peppol have been operational for some time already.
The pan-European project ViDA (VAT in the Digital Age) marks a significant step forward in ad-
vancing intra-community electronic invoicing and tax reporting.
The market harmonization through community projects is a gradual process. Consequently,

several European nations have leveraged their flexibility to either adopt or are in the process
of adopting legislative measures for electronic invoicing and reporting for domestic transac-
tions.
Our database provides valuable insights into the adoption rate of paperless invoicing in Euro-
pean countries for the year 2024:
In addition to this current status, the outlook for the coming years should be more interesting:
Belgium has enacted a comprehensive B2G e-invoicing mandate, with a B2B mandate sched-
uled for 2026. Similar to practices in other European countries, businesses are required to
prepare their systems for receiving and issuing structured e-invoices. While an e-reporting re-
quirement for invoice data is not yet planned for this phase, it is expected to be implemented
by the time the ViDA deadlines are established.
April 2024 61
In France, a complete B2G e-invoicing mandate has been implemented across all governmen-
tal levels, with the initial phase of a B2B mandate set for 2026. By Q4, all French companies
should be capable of receiving e-invoices, with large and mid-sized companies also issuing
them. The obligation extends to small and micro businesses in 2027. The e-reporting of invoice
data is an integral part of the B2B mandate from its inception, rolling out with the same dead-
lines.
Germany has B2G e-invoicing mandates targeting the federal administration and the majority
of the states. A B2B e-invoicing framework was adopted as part of the Opportunity Growth
Act in the beginning of 2024. Starting in 2025, all businesses must be 'e-invoicing ready' to re-
ceive and process e-invoices in a structured format based on the European Norm. From 2027,
companies with revenues exceeding 0.8 million euros, and from 2028 all businesses, will be re-
quired to issue structured e-invoices. The timeframe for the tax reporting of invoice data is to
be determined later, most likely aligned with the ViDA deadlines.
Italy stands as the pioneer in European B2G e-invoicing, having mandated B2G e-invoicing
across all governmental levels for nearly a decade. Since 2019, the B2B mandate has been pro-
gressively implemented, now encompassing the majority of businesses for both issuing and re-
ceiving e-invoices. The government employs a centralized pre-clearance model.
Poland has had an electronic reporting model for invoice-related data for several years. The
initiation of a comprehensive B2B mandate was initially slated for 2024 but has been post-
poned to February 2026 for taxpayers whose turnover exceeded PLN 200 million in the previ-
ous year and to April 2026 for all remaining taxpayers.
Romania's e-invoicing system necessitates the pre-clearance of B2B e-invoices via the central
government platform. The first half of 2024 serves as a transitional phase for the invoicing
mandate in the form of e-reporting, with the RO e-invoice system becoming fully operational
for sending and receiving invoices in July 2024, eliminating the acceptance of paper invoices
for tax compliance.
Spain has implemented a nationwide B2G e-invoicing mandate. Previously, the tax authority
introduced the SII electronic invoice data reporting system for both issuers and recipients. A
B2B e-invoicing mandate is under consideration, with a draft law already in circulation. In the
initial phase, businesses with revenues exceeding 8 million euros will be implicated, followed by
all other taxpayers 12 months later, with a potential start in the summer of 2025.
The UK maintains a comparatively liberal market, allowing the private sector to evolve the
electronic invoice market. Until 2019, the development in the B2G sector aligned with EU
strategies, with central government departments supporting the EN16931 e-invoice standard
and the National Health Service adopting the Peppol interoperability framework. The 'Making
Tax Digital' initiative aims to digitize the tax system, requiring digital record-keeping and the
use of compliant software, thereby narrowing the tax gap and bringing tax reporting closer to
real-time.
Additionally, several smaller European countries are adopting or planning to implement B2G
and digital record-keeping requirements within the next three years.
4.3 Market Predictions for 2024-2028

4.3.1 Expected E-invoice Volume Growth
In light of the accelerating market dynamics within several major Asian countries, we recog-
nize that the integration of electronic Point of Sale systems and mobile invoicing solutions (e-
receipts) is set to substantially increase transaction volumes in the coming years. This surge is
anticipated to significantly affect overall metrics, with projections suggesting that global e-re-
ceipt volumes may equal those of e-invoices by 2027. Predominantly, this expansion is ex-
pected to occur within the Business-to-Consumer (B2C) sector, although notable growth is
April 2024 62
also anticipated in the Business-to-Business (B2B) space. The anticipated growth in the B2B
sector will primarily be propelled by forthcoming regulations already disclosed in approxi-
mately 40 countries globally.
Due to the absence of qualified and localized projections for e-receipt volumes, we are cur-
rently unable to provide precise forecasts for this category and will instead continue to con-
centrate on traditional e-invoices.
With respect to e-invoices, we anticipate the following global volume trends:
4.3.2 Increasing Value of the E-invoicing Market

The electronic invoicing sector has established itself over the past two decades, with digital
documents progressively supplanting traditional paper invoices. Initially, the growth of the e-
invoicing market in Europe was predominantly spearheaded by the private sector. Subse-
quently, it expanded on a global scale, particularly within high-volume industries. Presently, the
expansion is primarily driven by an increasing mandate from governments worldwide for or-
ganizations to adopt electronic invoice exchanges. Notably, Latin America leads in this adop-
tion, with significant progress also observed in various European and Asian countries. This
global trend is accelerating the growth of the market for e-invoicing solutions and integration
services, fuelled by additional governmental requirements.
billentis estimates that the size of the global e-invoicing and enablement
market in 2024 is EUR 8.3 billion (USD 8.9 billion), and that it will reach ap-
proximately EUR 22.2 billion (USD 23.7 billion) in 2028 (CAGR 27.9%).
It is projected that by 2028, numerous nations in Asia and Europe, will have implemented a
CTC model. Generally, this will involve requiring the exclusive use of electronic formats for do-
mestic business-to-business (B2B) invoice exchanges. Furthermore, it is anticipated that a
substantial portion of previously generic receipts will be upgraded to comprehensive invoices.
This forecast encompasses solutions and services directly associated with e-invoicing, as de-
lineated in this analysis, including but not limited to exchange networks, communication gate-
April 2024 63
ways, Software as a Service (SaaS), Platform as a Service (PaaS), initial setup costs, and di-
rectly related value-added services such as data validation, formatting, and synchronization. It
is important to note that this projection excludes workflow or archival solutions and the pro-
cessing of invoice-related data (e.g., purchase orders, catalogues, sourcing, and payment).
Looking ahead, the solution and service market for electronic invoicing and tax reporting pre-
sents a lucrative opportunity with steady growth potential in the forthcoming years. However,
it is crucial to acknowledge that market values and growth rates significantly vary across dif-
ferent global regions:
Asia, Africa, and Latin America are projected to experience the highest annual growth rates.
Currently,
Europe has the largest market value, but annual growth rates are expected to be only single
digits until 2028. This moderation in growth can be attributed to Europe's already mature
market conditions. Additionally, a significant factor is the potential decrease in transaction
prices, given that the current average cost of transmitting an e-invoice in Europe is substan-
tially higher than the global average. This discrepancy arises from Europe's highly fragmented
market, characterized by a multitude of small-scale providers primarily serving national mar-
kets, and the diversity in languages, legislations, and standards. Conversely, jurisdictions
adopting CTC models and mandatory e-invoicing regulations benefit from a standardized ap-
proach, which results in a larger share of electronic invoices and facilitates economical and ef-
ficient interconnectivity between e-invoicing network operators. Consequently, the average
cost per e-invoice in countries with CTC models is significantly lower, typically in the low two-
digit Euro cents range.
In regions such as LATAM and Asia, mandates for e-invoicing have been either implemented
or announced, predominantly based on simpler CTC models. However, the revenue from
transactions for solution providers began at a modest level due to the typically brief imple-
mentation timelines, leaving the optimization of business process automation for the entire
trading cycle far from realized. Therefore, solution providers in these areas still possess sub-
stantial opportunities for additional revenue. Looking ahead, it is anticipated that they will en-
hance transaction revenue per e-invoice by delivering added value.
April 2024 64
5. Successful Implementation of E-invoicing and Integrated Digital

Trade Projects
5.1 Holistic Assessment of Existing Prerequisites
The exchange of invoices without paper is legally authorized in the vast majority of countries
globally. This enables organizations to adapt their internal frameworks and automate their op-
erations. The strategy for implementation is influenced both by the organization's internal ob-
jectives and capabilities, and significantly by external factors.
This section aims to provide insights that will assist readers in effectively establishing or ad-
vancing their electronic invoicing and Integrated Digital Trade initiatives.
An essential initial move is to conduct a comprehensive evaluation of the current situation and
needs across several areas:
+ Internal organizational and technical landscape

+ Digital collaboration with business partners
+ Regulatory requirements and compliance
5.1.1 Asses your Internal Organizational and Technical Landscape

In the context of large organizations, our observations have highlighted the diverse nature of
customer environments, characterized by a multitude of challenges such as:
+ The presence of numerous, disparate ERP systems.

+ Decentralized processes for the issuance and receipt of invoices.
+ Lack of control and oversight over paper invoice workflows.
+ Absence of transparency in invoice processing streams, volumes, and methodolo-
gies.
+ Multiple decentralized long-term archives.
+ Ambiguity regarding the identification of original invoices versus copies.
+ Concurrent, yet isolated, initiatives across departments focused on scanning, work-
flow management, archiving, tax compliance and electronic invoicing.
Early adopters embarked on their journey toward electronic invoicing without a comprehen-
sive long-term strategy. Subsequently, post-implementation, the responsibility shifted to IT
departments for ongoing operational management.
Frequently, major trading partners mandate specific formats for business communications,
funnelled through designated service providers. Similarly, tax regulations in various jurisdic-
tions necessitate the use of accredited service providers for invoice data submission. Histori-
cally, IT departments have rapidly and pragmatically responded to new business and tax re-
porting mandates, leading to the proliferation of diverse solutions, services, and processes.
Our analysis indicates that many multinational corporations engage with 3 to 20

distinct electronic invoicing service providers for incoming invoices. The scenario
is more fragmented on the outgoing invoice and tax reporting front, with organiza-
tions navigating between 20 to 160 different platforms, services, and portals.
Managing this complex web of heterogeneous solutions and processes poses a significant
challenge in change management. Global entities are required to incorporate hundreds of new
requirements annually into their systems and workflows. For medium-sized businesses, par-
ticularly those with international engagements, maintaining tax-compliant systems and pro-
cesses is becoming increasingly untenable.
April 2024 65
The deluge of new mandates is expected to continue, underscoring the need for
organizations to re-evaluate their existing fragmented infrastructures to align
more closely with future demands. Electronic invoicing and tax reporting should
be viewed not as a project with an end date but as an ongoing journey towards full
Integrated Digital Trade.
From our consultancy perspective, we have observed that many organizations' solutions and
process frameworks are not ideally positioned for future challenges. We recommend a proac-
tive assessment and strategic realignment towards the automation of Integrated Digital
Trade to ensure readiness for upcoming developments.
5.1.2 Digital Collaboration with Trading Partners

To enhance digital collaboration with trading partners, it is imperative to assess their capabili-
ties and constraints.
While the Pareto Principle (80:20 rule) holds validity across various sectors, it does not gen-
erally apply to invoice flows, with rare exceptions in certain industries. A more representative
scenario for inbound invoices in medium to large organizations is as follows:
Typically, between 20 to 50 suppliers issue over 100 invoices annually. Around 1,000 suppliers
may send between 10 to 100 invoices yearly, whereas the vast majority dispatch fewer than 10
invoices. Large corporations usually engage with approximately 10,000 suppliers and, de-
pending on their product portfolio, a significant number of customers. Most of these suppliers
and customers are small and medium-sized enterprises (SMEs) characterized by a highly
fragmented IT infrastructure, with limited abilities in structured invoice data exchange and
electronic archiving. Furthermore, these entities may operate across different jurisdictions,
each with its unique legal requirements for tax-compliant invoicing, archiving, and adjustments
for language and cultural differences.
The success of e-invoicing initiatives heavily depends on a thorough consideration of the trad-
ing partners' contexts. This includes identifying their motivations and facilitating their VAT-
compliant connection in a straightforward manner.
April 2024 66
While large entities often seamlessly incorporate electronic invoicing into their systems, the
needs of small and medium-sized businesses may vary.
Requirements of organisations:
Size Issuer requirements Recipient requirements

Large + Full ERP integration + Full ERP integration
+ Two-way communication + Two-way communication
+ Cloud archive (sometimes + Cloud archive (sometimes
shifted to inhouse in step 2) shifted to inhouse in step 2)
Medium + Full ERP integration + Full ERP integration
+ Export tools (CSV, ...) + Import tools (CSV, ...)
+ Cloud archive + Cloud archive
Small + WebEDI (type in invoice on a + Browser presentation & down-
portal) load, e.g. via home banking
+ Electronic forms + PDF (including several layers
+ PDF (including several layers with image, XML data and other
with image, XML data and other features)
features) + Cloud archive
+ Cloud archive
5.1.3 Legislation and Compliance

The evolving landscape of compliance and the requisite electronic submissions to tax authori-
ties are increasingly becoming predominant. Such requirements for tax reporting are pro-
gressively being integrated with B2B e-invoicing mandates. The objective of tax authorities in
developed nations is to fully digitize all documents and procedures pertinent to taxation.
For the purpose of automating business processes, organizations utilize over 150 messages,
of which approximately 30 have fiscal significance and are, eventually, required for digital sub-
mission to tax authorities. A majority of business operations are either directly or indirectly
influenced by tax and audit regulations. Consequently, various items listed in the forthcoming
chart may be targeted for digitization and data exchange Continuous Transaction Control
(CTC) models.
The digitization process encompasses numerous aspects of business, significantly impacting

the handling of tax-relevant documents:
April 2024 67
The anticipated evolution of compliance and tax requirements is set to encompass a wide
range of fiscal documents, including but not limited to invoices, payments, payment receipts,
credit notes, debit notes, waybills, and monthly salary statements. Below is a comprehensive
overview of the expected developments:
+ The entire lifecycle of invoices, from issuance to settlement, will be subject to metic-
ulous tracking and tracing.
+ There is an anticipated transition from periodic post-audit reporting mechanisms
towards the implementation of real-time electronic Continuous Transaction Con-
trols (CTC) systems.
+ The obligation to participate in the electronic cycle is expected to extend to buyers,
marking a shift from initial regulations that primarily targeted suppliers. This change
is already being observed in multiple jurisdictions.
+ Mid-term directives will also encompass cross-border invoicing, as demonstrated by
the European Union's ViDA project.
+ The scope of regulatory oversight is poised to expand to include inventory reporting,
ensuring seamless integration with the physical supply chain. This entails tracking
and tracing supplies from their point of entry into the domestic market or produc-
tion phase through to their sale and correlating this data with Integrated Digital
Trade documentation such as invoices.
+ Tax authorities in several jurisdictions are mandating that businesses utilize only ac-
credited service providers for CTC reporting or message transmission to trade
partners.
Despite potential initial hesitations regarding the adoption of an e-invoicing and e-reporting
CTC model, the benefits to taxpayers are significant:
+ The use of e-invoices within CTC models is shown to reduce tax compliance costs by
37-39% for corporate businesses and by 8-56% for private businesses, compared
to traditional paper invoicing. This efficiency gain encourages the adoption of e-in-
voice initiatives by multinational corporations.
+ The process's legal robustness is enhanced by mechanisms ensuring the authentic-
ity of documents and preventing the repudiation of origin, thus reducing the risk of
fraud.
+ Compared to legacy post-audit systems, real-time compliance verification signifi-
cantly lowers the risk of penal fines that could be levied years after the transaction.
+ Automation replaces manual and periodic reporting, eliminating the need for VAT
declarations and deductions and enabling automated collections and refunds. This
transition also leads to a substantial reduction in paper-based documentation.
+ The implementation of these systems significantly narrows the VAT gap, setting the
stage for potential reductions in future tax rates.
+ It promotes the establishment of unified messaging standards nationwide, minimiz-
ing heterogeneity.
+ Additionally, it simplifies or eliminates issues related to interoperability among ser-
vice providers and accelerates widespread market adoption, significantly reducing
transaction costs compared to fragmented, bottom-up market developments.
+ This regulatory environment fosters the emergence of innovative invoicing and trade
finance mechanisms.
5.2 Impact of Third-Party Solution Offerings and related Technology Trends

Pursuing in-house development has become increasingly impractical for multiple reasons:
+ The feasibility of a favourable business case is diminished due to substantial initial

and ongoing project costs.
+ The process is overly time-intensive.
April 2024 68
+ There is no justification for creating solutions that are readily available and opera-
tional through numerous solution providers.
+ Regulatory mandates from many governments necessitate the use of accredited
service providers for e-invoice transmission. Moreover, key trading partners may
stipulate the use of specific service providers for electronic invoice and business
message exchanges, rendering the use of a service provider obligatory.
Consequently, the viable alternatives are the acquisition of third-party applications or the
adoption of external cloud services. The selection between services and applications/solutions
entails:
The decision-making process for selecting the appropriate scenario hinges on:
+ The organization's Make or Buy policy

+ The existing IT and processing environment
+ Invoice volume
+ The overarching business case
+ Internal operational requirements
+ The requirements and capabilities of business counterparts
Typically, larger organizations evaluate 2-3 scenarios, conduct comparative analyses, and fi-
nalize their decision. This decision-making process is followed by issuing a Request for Pro-
posal (RFP) to 2-4 potential providers.
5.3 Comprehensive Strategy Encompassing Entire Scope of Objectives

5.3.1 Internal Objectives
The internal goals and requirements can be delineated and executed with a significant degree
of autonomy. The following domains, among others, may serve as focal points for setting ob-
jectives:
+ Integrated Digital Trade: This extends well beyond simple automation of invoice
processes to encompass all pertinent activities before and after source-to-pay and
order-to-cash processes. Based on our experience, foundational elements often
need to be established in a preliminary project, especially in terms of maintaining an
accurate database for trading partners and products. Master data cleansing be-
comes a necessary step in many instances. Streamlined processes are crucial for
adding new trading partners, and efforts should be made to eliminate or synchronize
redundant data across different systems in real-time.
April 2024 69
+ Enhancement of Working Capital: Automation of invoices plays a critical role in this

area. Electronic invoicing facilitates the reduction of exceptions, expedites pro-
cesses, enables discount utilization, lowers days sales outstanding (DSO), enhances
cash management transparency, reduces capital expenditure, and supports the use
of Supply Chain Finance.
+ Environmental, Social, and Governance (ESG): The shift towards electronic invoic-
ing can be strategically employed to improve ESG reporting and performance.
+ System and Process Harmonization: Aim for a fully digital internal transition
through suitable initiatives.
+ Future-Ready and Agile Solutions and Process Design: Adapt to existing and po-
tential future legal mandates as well as real-time interactions with tax authorities
and trading partners, which are essential for future solution frameworks. Character-
istics such as platform openness, agility, interoperability, and the adoption of new
technologies are vital. Despite the difference from the current and organically devel-
oped environment, these elements should not deter preparations for the future. It
may be necessary to overhaul existing internal systems and processes to stay ahead.
When outlining the strategy, the following inquiries may emerge:
+ Do we aim to automate solely the invoicing process, or should we extend this to in-
clude purchasing, the complete procurement, and the sourcing process?
+ Is our goal to initiate with the order-to-cash or purchase-to-pay automation?
+ What strategies do we have to prevent or minimize the existence of parallel systems
and processes in business process automation and tax reporting?
+ Which company divisions, systems, and processes will this project impact, and how
can we transition from existing solutions?
+ How should B2B networks and other cloud services be integrated into our ap-
proach?
5.3.2 Improve Digital Collaboration with Trading Partners

Strategic considerations Influencing the business direction:
+ The necessity for compliance with the stringent mandates set forth by principal
trading partners, which may include the adoption of designated electronic market-
places or B2B service providers.
+ A rising demand among trading partners for the capability to facilitate the transmis-
sion of various business and trade communications.
+ Enhancements in global interoperability to enable a seamless and cross-platform ex-
change of diverse business messages.
+ The expansion of service provider operations internationally, with an increased
scope of geographical coverage.
+ The dichotomy in the service provider landscape, where numerous providers are in-
terconnected, enabling the cross-platform sharing of messages, contrasts with the
presence of several B2B solution providers now operating in upwards of 110 coun-
tries. For enterprises, the ideal scenario entails a unified point of contact managing
all trade cycle transactions, both inbound and outbound. While feasible for busi-
nesses operating within a limited geographical span, even globally active entities
should aim to consolidate their solution providers to approximately five.
5.3.3 Ensure Tax Compliance

Given the diverse nature of regulations and frequently tight timelines for implementation, nav-
igating this domain presents significant challenges.
April 2024 70
Outlined below are essential questions that organizations must consider prior to formulating a
strategy:
+ Are we operating in jurisdictions that currently or will shortly adopt a Continuous

Transaction Controls (CTC) model for invoices, receipts, and other fiscal documents
or tax reporting?
+ Are we engaged in commerce within countries that currently or will soon require a
Business-to-Government (B2G) or Business-to-Business (B2B) electronic invoicing
mandate?
+ What measures can be taken to guarantee tax compliance within a global frame-
work?
5.4 Implementation, Migration and Onboarding

5.4.1 Scenario for Gradual Internal Implementation
Approximately 30% of larger organizations continue to manage their invoices in a decentral-
ized manner, frequently employing multiple ERP and accounting systems. Such a setup re-
stricts financial managers from achieving comprehensive visibility regarding the quantity, total
value, and status of invoices.
Adopting electronic invoicing typically establishes a centralized gateway for both sending and
receiving invoices, significantly enhancing the transparency available to finance managers.
This centralization is a crucial step towards optimizing working capital.
In a dispersed and extensive operational landscape, the greatest benefits are realized by ad-
hering to these specific procedural steps:
Given that achieving this objective may be time-intensive (for example, requiring up to two
years), an effective alternative involves migrating within a decentralized framework. If the limi-
tations associated with future centralization are anticipated, they can be incorporated into the
system and process planning and execution phases.
5.4.2 Determine the Best Scope for your Organisation

In approximately 50% of nations, the implementation of electronic invoicing is optional, yet le-
gally sanctioned. For the majority of organizations, transitioning to e-invoicing represents the
April 2024 71
initial step towards achieving an Integrated Digital Trade framework. This underpins the ra-
tionale behind many organizations prioritizing e-invoicing, often referred to as the ‘Queen of
messages'. Typically, initiating the digital transition with the invoicing message and subse-
quently expanding the electronic quotient within the organizational framework is considered a
strategic approach (left arrow of next chart).
Transitioning to electronic and automated processes is generally beneficial.

Nonetheless, within most organizations, it is recommended to conduct a thor-
ough review and refinement of current processes before implementation. It is
often possible to eliminate up to 30% of legacy inefficiencies without sacrific-
ing functionality.
Determine the appropriate migration path to exploit the full optimization potential:
E-invoicing, in isolation, presents a compelling business case, offering tangible benefits. None-
theless, the potential for additional future cost savings is amplified through the realization of a
fully automated trade cycle. A secondary group of users seeks to extend digitization and auto-
mation beyond mere invoicing to encompass a broader spectrum of trade-related communi-
cations, such as orders.
The strategic approach to e-invoicing varies across organizations, influenced by the dominant
nature and optimization potential of different invoice streams. It is advised that projects be
aligned with these areas of potential.
April 2024 72
Prioritizing Digital Transition of Invoice Streams:
Inbound Invoices: Organizations with substantial purchasing power may prioritize the digital
transition of inbound invoices to leverage their position and encourage suppliers towards
electronic invoice submission.
Intercompany Billing: The potential for optimization within intercompany billing is often over-
looked. This stream offers complete control to the organization and, in scenarios where all en-
tities are within the same tax jurisdiction, invoices can be efficiently processed electronically
or through account transfers. In instances of diverse tax jurisdictions, adopting a standardized
approach to electronic invoices, mirroring external processes, ensures authenticity, integrity,
and readability.
Outbound Invoices: Organizations with a high volume of consumer transactions (B2C) have
begun issuing electronic invoices directly. Despite this, widespread adoption remains modest;
achieving a 60% client utilization rate is deemed successful, with most organizations reaching
only 45-60%, and the highest performers achieving 85-97%.
To enhance electronic participation, organizations should consider implementing an opt-out

model and/or leveraging networks (e.g., online banks or other popular consumer portals) for
distribution. The use of PDF invoices, transmitted via email or portals, has gained popularity,
with some organizations advancing by adopting push methods over portal-based strategies.
This approach is equally applicable to B2B invoices for smaller entities, where PDF invoices
transcend mere paper replicas by incorporating structured (XML) data layers and enabling
dynamic interaction functionalities (e.g., dispute resolution, payment options) within the docu-
ments. E-invoices are crafted to comply with VAT regulations, including digital signatures for
crucial sections, verification processes, and, occasionally, provisions for long-term online ar-
chiving.
5.4.3 Stricter Internal Data Accuracy Mandated to Meet Tax Obligations

5.4.3.1 Compliance Challenges
In response to the utilization of both lawful and unlawful strategies for tax optimization by nu-
merous corporations, there is a heightened focus on tax compliance. The Organization for
Economic Cooperation and Development (OECD) along with the G20 nations have consented
to bolster the requisites for both reporting and ensuring the tax compliance of corporate doc-
umentation. This necessitates companies to furnish more detailed proof affirming the genuine
April 2024 73
existence of their trading partners and that such corporate documents are indeed under-
pinned by tangible goods or services transactions. The current standards for the precision of
invoices and associated business documents might no longer meet these enhanced require-
ments.
Enhancing the accuracy of invoicing can be achieved through the refinement of address infor-
mation for both issuers and recipients, alongside all data pertinent to the transactions (goods
and services).
One of the primary sources of Accounts Payable (AP) fraud includes the issues of phantom
trading partners (non-existent corporate entities), undelivered supplies, and fraudulent in-
voicing.
Many of these obstacles can be surmounted by adopting measures aimed at the augmenta-
tion of data accuracy and the validation of this data in real-time or near-real-time. The deploy-
ment of artificial intelligence capabilities presents new avenues for the identification of fraudu-
lent invoices. Employing electronic invoicing, predicated on precise data, establishes an excel-
lent groundwork towards achieving these objectives.
5.4.3.2 Accurate Addresses and Master Data

Ensuring tax compliance necessitates the veracity of both trading entities and the accuracy of
their addresses, aligning with their business register entries.
The deployment of electronic IDs and digital certificates offers a method for the technical au-
thentication and unequivocal identification of trading parties. These tools are being utilized in
certain jurisdictions to achieve this purpose. However, such identification mechanisms do not
inherently assure the alignment of invoice issuer and recipient addresses. Instead, alignment
can be achieved through the synchronization of master data with authorized registers, such as
national business registers, which are commonly established for internal governmental use
but may require modifications prior to the implementation of CTC systems. Furthermore, the
creation and maintenance of public sector directories at various governmental levels are ad-
vocated, although access to these directories is often restricted to protect privacy. Legisla-
tion may be revised to facilitate online access to these directories. For operational efficiency,
these registers should support various structural specifications, including those for headquar-
ters, branches, and subsidiaries. Upon meeting these conditions, market participants can em-
ploy lookup routines to dynamically synchronize essential elements of their master data within
their Enterprise Resource Planning (ERP) solutions or within the directories of e-invoicing net-
work operators.
While direct data synchronization between trading entities' systems remains crucial in high-
volume industries, it is anticipated that, in the medium term, this could be augmented or sub-
stituted by synchronization with national registries.
5.4.3.3 Accurate Product and Service Information

In accordance with compliance mandates, enterprises are required to substantiate that their
business documents originate from legitimate transactions involving goods or services. This
measure aims to deter tax optimization strategies such as over-invoicing, where the price of
goods or services is artificially inflated, and under-invoicing, which involves reporting lower
prices than actual, to evade proper tax liabilities.
Moreover, companies have a vested interest in ensuring that invoices accurately reflect the
descriptions of goods or services provided. Particularly in the context of standardized or
mass-produced goods and services within regulated sectors, it is feasible to align such infor-
mation with a centralized database. An illustrative case is TARMED, which serves as a tariff
framework within the Swiss healthcare sector, facilitating the verification of invoiced supplies
against standardized data sets.
April 2024 74
Nevertheless, a majority of enterprises operate within frameworks that are not as rigorously
standardized. For these entities, viable solutions exist to enhance the precision of invoice data.
The adoption of integrated purchase-to-pay systems that support catalogue data matching
exemplifies such an approach.
The Global Data Synchronization Network (GS1 GDSN) stands as a notable initiative enabling
trading partners to uniformly share product information on a global scale.
In Mexico, the adoption of the United Nations Standard Products and Services Code (UN-
SPSC) taxonomy by the ‘Servicio de Administración Tributaria (SAT) for classifying goods and
services has been instrumental in enabling the use of electronic invoicing since December
2017.
It is anticipated that data synchronization services will become increasingly pivotal in the fore-
seeable future. Currently, however, the predominant preference among organizations is to
place orders and receive invoices electronically. In many instances, the details contained in
these electronic documents can be automatically aligned, simplifying the process.
5.4.4 Designing and Implementing Agile Systems and Processes for Enhanced Efficiency
The regulatory landscape and digital requisites for trade partners are evolving rapidly and
with increasing frequency. To effectively navigate these changes within the constrained time-
lines necessitated, it is imperative for systems and processes to exhibit a high degree of agil-
ity. Presently, we are witnessing a significant wave of innovation in systems, highlighted by the
proliferation of services facilitating cross-border electronic invoicing and tax compliance.
Moreover, the emergence of solutions leveraging cutting-edge technologies are becoming
more feasible and financially accessible.
This evolution presents lucrative opportunities for enterprises. Nonetheless, it is critical for
these entities to strategically realign their internal mechanisms and workflows to fully capital-
ize on the potential benefits, thereby advancing towards the complete automation of the Inte-
grated Digital Trade.
Subsequent to optimizing the internal infrastructure, the enhancement of the electronic in-
voicing proportion introduces an additional complexity.
5.4.5 Initiatives to Boost the Adoption of Electronic Invoicing

A growing number of nations and governmental entities are mandating B2G and B2B elec-
tronic invoicing, inclusive of detailed requirements for structured exchange formats and fre-
quently, the transmission channels. These mandates, necessitating comprehensive invoice
content and incorporating tax reporting as an integral component, provide businesses with a
solid foundation to automate their invoice processing.
Nevertheless, substantial regions across the globe remain where the implementation of ad-
vanced mandates that benefit both tax authorities and businesses alike is not foreseeable in
the near term.
In several jurisdictions, mandates are limited to the electronic submission of sales invoice
summaries. While the structured electronic data from the supplier is adequate for tax report-
ing purposes, it falls short in enabling buyers to automate their invoice processing workflows.
In other regions, while electronic invoicing is legally acceptable, the decision to adopt e-invoic-
ing and the choice of format rest with the trading partners.
The extent to which electronic invoicing can be adopted varies widely but can be significantly
enhanced through strategic interventions. The success rate of adopting electronic invoicing is
contingent upon the effectiveness of the onboarding methodologies employed.
April 2024 75
Phase Description
Classic ap- Primarily, large corporations serve as the pioneers in adopting electronic
proach invoicing, exerting influence on their substantial trading counterparts to
embrace the exchange of invoices digitally. The approach of Opt-In
onboarding is utilized, wherein efforts are made to persuade each entity
individually to join the electronic invoicing community. However, for the
majority of organizations, achieving a significant portion of electronic in-
voices with large trading partners plateaus at approximately 25-30%
even after several years.
Subsequently, these pioneering large enterprises endeavour to extend

their push towards mid-sized and small trading partners to adopt elec-
tronic invoicing practices. Despite intensifying marketing efforts, a large
organization alone cannot dictate market trends. Their influence is contin-
gent upon the overall market's maturity. Consequently, the annual growth
rates of electronic invoicing adoption remain constrained.
This pattern of market evolution has been prevalent historically and con-
tinues to unfold in numerous countries to this day. Nonetheless, it has not
led to a widespread breakthrough in the markets thus far.
Pressing For most major corporations, attaining a minimum electronic invoice pen-
etration of 60% within three years is feasible. However, this target is not
achievable through passive or merely amicable strategies with trading
partners. Instead, proactive engagement and strategic marketing efforts
are essential to elevate the adoption rate of e-invoicing. Additionally, it is
imperative to refine standard contractual terms to furnish a legal frame-
work that compels trading partners to transition towards e-invoicing.
While the adoption strategy predominantly relies on assertive tactics, it

remains a legitimate approach provided that the initiating company or its
service provider extends suitable e-invoicing solutions that accommodate
the diverse needs and sizes of trading partners under equitable terms.
April 2024 76
The process for registration and use should be streamlined to the maxi-
mum extent, aiming for minimal barriers to entry. For instance, initial en-
gagement could be simplified to online registration, with each trading
partner having a pre-assigned account that can be activated effortlessly
with a single click, followed by the completion of their primary data.
An increasing number of prominent firms are adopting this strategic ap-

proach.
Powerplay For the majority of large-scale enterprises, attaining a minimum of 80%
electronic invoicing within three years is feasible. This is facilitated
through the implementation of the 'Pressing' strategy, which incorporates
penalties for parties that persist in utilizing paper invoices. Electronic in-
voicing is established as the standard mode of transaction, with penalties
enforced for the issuance of paper invoices. The structure of these penal-
ties is as follows:
+ Suppliers typically impose charges ranging from EUR 1 to EUR

3.50 on consumers and EUR 5 to EUR 25 on businesses for each
paper invoice issued.
+ Buyers are inclined to deduct between EUR 15 and EUR 25 from
the invoice value for each paper invoice received, particularly if
the supplier is either unwilling or unable to facilitate electronic
invoice transmission.
Closed In numerous large organizations, a minimum of 40% of invoices are de-
electronic rived from Purchase Orders. These enterprises have the opportunity to
loop for transition receiving all PO-based invoices electronically within a few
orders and months.
invoices
Suppliers are eager to obtain purchase orders. Should the prospect arise
for them to exclusively receive these orders through electronic means in
the future, they are likely to swiftly embrace this new method of commu-
nication. Moreover, this approach also enables them to submit invoices
electronically. Consequently, this paradigm fosters a rapid and mutually
beneficial scenario for both suppliers and purchasers.
Given the established facts, it is noteworthy that numerous organizations have yet to transi-
tion to more effective onboarding methodologies. The technique represents merely a fraction
of the journey towards electronic invoicing. Far more critical to achieving success and a sub-
stantial digital adoption rate is the rollout strategy, specifically the onboarding of trading part-
ners.
Different rollout models in use:

Opt-In An issuer or recipient enhances their electronic invoicing system. They notify
their counterparts of this advancement, encouraging them to adopt electronic
invoicing for sending and/or receiving invoices. Persuading each participant to
transition to electronic invoicing requires robust arguments, incentives, and/or
moderate pressure. While traditionally, a more congenial approach was em-
ployed to onboard companies, increasingly, the Opt-Out model is being favored
where applicable.
Opt-Out An issuer or recipient enhances their capabilities for processing electronic in-
voices and notifies their business partners of this new facility. They communi-
cate that beyond a specified deadline, all invoice exchanges will be conducted
electronically. Parties interested in maintaining traditional paper-based invoic-
ing are required to formally request exclusion from this electronic process, po-
tentially incurring a fee for opting to continue with paper invoices.
April 2024 77
The adoption of the Opt-Out model significantly accelerates the transition to

high-volume electronic invoicing. This approach is viable for any large organiza-
tion, particularly those that engage in regular transactions with a consistent
group of partners, such as leasing companies, the transport and logistics sec-
tor, telecommunications, utilities, providers of credit and customer cards, of-
fice supplies, maintenance, repair and operations (MRO) goods, consumer
packaged goods, online services, and communities utilizing extranets or stand-
ardized client software.
Presently, many issuers employing this model opt for signed PDF invoices, with
or without accompanying XML data. This ensures immediate legibility for the
recipient, although the advantages may be somewhat limited in the case of
PDFs alone.
Success rate for an organisation and the electronic proportion one year after launch
Model Electronic proportion of all invoices
Issuer driven ‘Opt-In’ 1-5% with free market range
5-50% within existing supplier-buyer networks
Issuer driven ‘Opt-Out’ 85-90%
Recipient driven ‘Opt-In’ 1-5% for organisations without much purchasing power
50-70% for organisations in strong purchasing position
Recipient driven ‘Opt-Out’ Up to 90% for organisations in strong purchasing position
and providing electronic orders
Many businesses do not operate in conditions that are conducive to adopting an Opt-Out ap-
proach. Nonetheless, the model should be customized to suit the feasibility within each spe-
cific context. Undoubtedly, some of your peers will eventually implement this strategy, which
will have a tangible effect on your circumstances.
5.5 Overcoming Potential Barriers: Strategies for Success
The barriers differ greatly for enterprises in various countries and depending on the company
size. Some known obstacles and possible measures to overcome those barriers:
Known obstacles Possible actions to overcome barriers

Legal requirements are un- The multi-stakeholder forums and/or federal admin-
known or confusing istrations have the privilege of proactively dissemi-
nating relevant information to the broader market.
Some of these entities organize informational
events and roadshows or engage evangelists to fur-
ther their reach. Additionally, many operate infor-
mation portals that house key information for public
access.
Missing market transparency Multi-stakeholder forums and federal administra-
about the solutions offered and tions are afforded the opportunity to proactively
the collaboration among various disseminate relevant information to the broader
service providers market. Several of these entities have established
comprehensive information portals. Leading provid-
ers tailor their offerings with segment-specific infor-
mation, enabling small businesses, for instance, to
choose options like ‘I am a small biller’ or ‘I am a
small invoice recipient.’ This facilitates an interactive
dialogue that precisely delivers the pertinent infor-
mation in a streamlined manner.
April 2024 78
Change/adoption of internal or- It is inherent to human behaviour that established

ganisation processes (40% of habits are resistant to change. This holds particu-
larger organisations) larly true when a project impacts multiple depart-
ments, necessitating adaptations. Consequently, fo-
cused management oversight and decisive actions
are essential.
Divergent requirements of trad- In the context of bilateral (direct) exchange of struc-
ing partners regarding formats, tured electronic invoices, leveraging standards can
methods and processes alleviate the challenges involved. Additionally, opera-
tors of e-invoicing networks possess the capability
to substantially decrease complexity for end-users.
Trading partner does not sup- From a statistical perspective, there is a considera-
port the electronic invoice ble probability that your trading partner is already
equipped to support electronic invoicing. This sce-
nario may be attributed more to an information defi-
cit rather than a lack of capability. Numerous federal
administrations, multi-stakeholder forums, and pro-
vider associations have taken the initiative to main-
tain publicly accessible user directories.
In addition to enhancing transparency, trading part-

ners frequently require motivation to adopt elec-
tronic invoicing promptly and guidance on its imple-
mentation.
Task sharing for accounting and These external parties exhibit apprehension or lim-
invoice processing with external ited enthusiasm towards transitioning from labour-
parties (trustee, tax consultant, intensive (paper-based) processes to more efficient,
commercial auditor, etc.); is in electronic, and automated workflows. It may pose a
some countries practised by up significant challenge for multi-stakeholders to eluci-
to 50% of (smaller) enterprises. date and demonstrate the risks associated with re-
sisting the adoption of new electronic methodolo-
gies.
Lack of budget Internal development initiatives often result in sub-
stantial initial and subsequent expenses. Con-
versely, applications and services that have been
validated in the field from external providers tend to
be considerably more cost-effective. Opting for on-
demand services or Software as a Service (SaaS)
models can lead to relatively moderate upfront in-
vestments.
Lack of understanding of cur- Some market analysts enhance market transpar-
rent available solutions ency through their publications and events. Solution
providers are urged to excel in market communica-
tions.
Lack of resources to manage Elevate electronic invoicing to the enterprise's top
automation priority.
Supplier resistance Avoid enforcing a uniform approach and mandating
a singular data format in alignment with your busi-
ness process across all suppliers. Suppliers vary
considerably in their capabilities and requirements.
If those receiving invoices (or the electronic invoic-
ing network operators involved) accommodate mul-
April 2024 79
tiple invoice formats, support any-to-any data con-

version, and offer advantages (such as trade finance
opportunities and early payment options), supplier
acceptance is likely to markedly improve.
5.6 Success Factors

In our globally innovative landscape, it's evident that the propensity for behavioural change
among the majority hinges on external pressures. Consequently, merely extending an invita-
tion to trade partners to adopt e-invoicing might not swiftly yield the anticipated success.
Given the unpredictable economic climate, which exacerbates cost pressures, it's likely that
such conditions will serve as catalysts for modifications in invoice processing methods. It's ad-
visable for organizations not to await coercion from customers or suppliers but to proactively
embark on e-invoicing initiatives. This approach allows for the resolution of details without un-
due haste, facilitating a smooth transition from traditional paper invoicing to digital formats.
Historically, the immediate success of e-invoicing projects has been hampered by several fac-
tors:
+ Insufficient recognition of the project's impact across various processes and depart-
ments.
+ Inadequate project management.
+ An excessive focus on technical aspects rather than on critical challenges such as
process automation and the integration of a significant number of suppliers or cus-
tomers in a brief timeframe.
For e-invoicing initiatives to succeed, several critical factors must be considered:
+ Recognition by top management of e-invoicing's extensive potential, beyond mere

savings on printing and postage or the manual entry of invoice data into ERP sys-
tems.
+ Support from management, given the cross-departmental nature of such projects.
+ Designation of a committed project lead.
+ Establishment of a three-year plan with phased implementation, starting with an ini-
tial phase that delivers immediate benefits (ideally, involving a single invoice stream
within one division of a large organization).
+ Effective internal and external communication with all stakeholders involved.
+ Excellence in rollout strategy, aiming for a high adoption rate among suppliers/cus-
tomers through preferable opt-out policies coupled with dynamic marketing efforts.
+ Realistic assessment of the organization's mid- to long-term technical capabilities in
terms of workflow and archiving, making informed decisions on in-house develop-
ment versus purchasing, and choosing between direct or networked solutions.
+ Avoidance of unnecessary development of solutions that are readily available at a
fixed price and have been successfully tested in other organizations.
+ A practical understanding of the technical abilities of partners to send, receive, and
archive electronic invoices, often significantly lower than anticipated. Simple, cost-
effective interfaces and, if necessary, third-party archiving services are crucial.
5.7 Benefits and Business Case
For the past two decades, the momentum for the adoption of electronic invoicing has been
predominantly driven by the private sector. Organizations have been transitioning to digital
processes to leverage multiple benefits, including:
+ Enhancement of process innovation and automation

+ Increased operational efficiency and reduction in discrepancies and manual interven-
tions
April 2024 80
+ Enhanced accuracy of master data and invoice content, ensuring alignment with or-
ders and contracts
+ Improved compliance with tax regulations
+ Optimization of cash flow management
+ Enhanced business flexibility
+ Minimization of invoice fraud
+ Enhanced transparency and accountability
+ Environmental benefits
+ Meeting digital interaction demands from key trade partners
+ Cost reduction
The shift towards e-invoicing is, to a significant extent, an information technology (IT) initiative.
This reality has compelled especially larger enterprises to conduct comprehensive business
case analyses historically.
These analyses have generally validated a fundamental principle: By adopting

electronic and automated invoicing processes, businesses can achieve cost re-
ductions of 60-80% compared to traditional paper-based systems, with a re-
turn on investment typically realized within 0.5 to 1.5 years.
Contemporary surveys indicate that approximately 90% of major corporations in developed

economies have adopted e-invoicing to some degree. Although in some cases the electronic
exchange of invoices might represent a small fraction of their total invoicing, these companies
likely still perceive a positive business case. Exceptions to satisfactory outcomes are relatively
rare, with common issues including the continued operation of traditional paper-based sys-
tems alongside digital processes, attempts by companies to develop proprietary solutions ra-
ther than deploying proven third-party systems, and a reactive rather than strategic ap-
proach to e-invoicing implementation. These challenges often arise from the complex and var-
ied IT, process, and compliance landscapes that develop over time.
It is projected that by 2030, up to 90% of organizations will be compelled to adopt e-invoic-

ing, driven by legislative mandates or requirements from key business partners, making the
necessity of a traditional business case less critical. Instead, the focus may shift towards eval-
uating the value proposition offered by various solution providers.
For those interested in a more detailed analysis of e-invoicing business cases, additional infor-
mation is available at http://www.billentis.com/e-invoicing-businesscase.pdf.
5.8 Shifting Strategies: Moving from Reactive to Proactive
Certain government initiatives, such as the EU ViDA project, may experience delays in their
implementation beyond the initially scheduled timelines. Nonetheless, this should not serve as
a justification for postponing the acquisition of further details or specifications. Rather, it pre-
sents an opportunity to proactively prepare for various potential developments.
Employing a nimble internal solution or engaging with a versatile third-party service provider
ensures sufficient adaptability to meet future requirements, irrespective of changes in legisla-
tion or the expectations of trade partners.
Now is the time to take the next step!
April 2024 81
6. Service Providers in an Ambigious Market Environment

6.1 A Challenging Path to Reach the Promised Land
In light of the global implementation of e-invoicing mandates, this presents a significant oppor-
tunity for service providers. However, to capitalize on this opportunity, there is a necessity to
increase current adoption rates from an average of 50% to up to 100% in countries where
such mandates are in effect. This involves ensuring compliance with existing legislation, which
often mandates the use of structured data formats for e-invoices, moving away from the pre-
dominantly used PDF formats. Consequently, we anticipate a substantial increase in e-invoice
volumes, necessitating companies to establish new connections to ERP systems, transition to
different data formats, and facilitate data exchanges with tax authority platforms.
Furthermore, service providers must undertake considerable investments in their current so-
lutions to meet legal requirements, including integrating with emerging tax authority plat-
forms and e-reporting mandates. This is particularly pertinent for providers aiming to operate
across multiple jurisdictions, as they must navigate varying regulatory landscapes. Beyond le-
gal compliance, service providers must also address technical challenges associated with
adopting new technologies such as AI and managing significantly higher data volumes.
Another challenge is the growing competition within the e-invoicing market. Each new e-in-
voicing mandate sees approximately 50 new market entrants per country, a number that fluc-
tuates with market size. This surge in providers is leading to a decrease in price levels, as new-
comers often adopt low-price strategies, ultimately commoditizing e-invoicing services.
In summary, the initial phase may see a decrease in revenue and an increase in costs for ser-
vice providers, before the benefits of higher volumes materialize.
6.2 Navigating the Tornado: The Urgent Crusade for Innovative Service Providers amid
Regulatory Upheavals
Even for larger enterprises, complying with swiftly evolving regulations via internal mecha-
nisms often presents considerable challenges. As a result, it becomes crucial to engage third-
party solutions and service providers to facilitate their navigation through these transitional
periods.
Providers specializing in these solutions possess the requisite expertise and business acumen
to manage such complexities. However, aiding clients through transitions remains a formida-
ble task for them as well. The competitive landscape among these providers has intensified,
April 2024 82
making customer-centric innovations and services more vital than ever. As standard elec-
tronic invoicing services gradually become ubiquitous, differentiating through unique offerings
and innovations will be essential. Consequently, devising a sustainable and cost-effective
strategy for future business management emerges as a critical concern for these service pro-
viders.
In addition to core electronic invoicing services, we identify several opportunities for the inte-
gration of value-added services. These services can be selected individually, combined in vari-
ous configurations, or fully integrated, depending on the specific needs and preferences of the
target customer segments and geographical regions. The decision to incorporate these ser-
vices, either through partnerships or by developing them internally, will be guided by their
strategic alignment with the business objectives and the requisite time to market.
Future markets radar for service providers – future management
1. The e-invoicing standard service offering may encompass a comprehensive range of

capabilities, including data formatting across various formats, preparation of e-in-
voices that comply with domestic tax regulations, as well as their transportation/distri-
bution and archival. Achieving cost leadership is essential for maintaining competitive-
ness in the future market landscape. Providers that are unable to elevate their pro-
cessed invoice volume beyond the average market growth rate should consider mer-
gers with competitors as a strategy to attain the necessary critical mass.
2. Service providers may strategically select specialized domains to excel as leaders in
deployment and become roll-out champion. One potential approach is to comprehen-
sively address global tax compliance needs, an offering particularly appealing to major
multinational corporations. Given the distinct compliance requirements across various
sectors, including retail, telecommunications, automotive, and others, some providers
may opt to focus on these specific industries on an international level. Additionally, in
the interim where paper invoices remain in circulation, providers can supplement their
offerings with hybrid services such as scanning and printing, thereby ensuring com-
plete coverage for all incoming and outgoing invoices for businesses.
3. The connection between payment processes and electronic invoicing is evident. With
the introduction of new e-invoicing mandates that incorporate payment information,
this link is becoming increasingly significant. Both traditional banking institutions and
April 2024 83
numerous financial technology companies (Fintechs) are now providing a variety of

new payment services. The emphasis is on enabling suppliers to present their cus-
tomers with diverse payment alternatives. These services will be integrated into em-
bedded finance solutions, which are designed to benefit both small and medium-sized
enterprise (SME) suppliers but also large corporations across sectors such as tele-
communications, utilities, and insurance, serving a substantial base of business-to-con-
sumer (B2C) customers.
4. Invoice Financing represents another crucial component of embedded finance offer-
ings. With the ascent of interest rates, the significance of this option is increasingly ap-
parent. It provides suppliers with an accessible means to address immediate financial
requirements through the financing of individual invoices. Overall, a variety of buyer-
focused and supplier-focused solutions exist, enabling businesses to tackle the issue of
delayed payments and enhance their working capital management.
5. In response to evolving tax compliance mandates, solutions specific to tax are in-
creasingly integrating with e-invoicing systems. Tax authorities are tightening the re-
quirements for the electronic submission of tax documents. While the initial focus was
mainly on general ledgers and VAT declarations, there is now an expanding require-
ment for taxpayers to submit electronic versions of audit files, invoices, credit notes,
debit notes, and payment receipt data produced by fiscal printers at points of sale.
Moreover, businesses are pursuing assistance to accurately assess the correct VAT or
Sales tax applicable to both inbound and outbound invoices.
6. Concentrating exclusively on the processing of electronic invoices is no longer ade-
quate. Currently, over 50% of service providers also facilitate support for additional
business communications or multi-messaging, such as orders, order confirmations,
and statements. Initially, these documents are transmitted within an electronic enve-
lope. Leading service providers go further by offering advanced services, including
content validation and correlating information across various messages. The most
sought-after services at present involve the alignment of orders, invoices, and delivery
notes.
7. In the initial phase of supply chain automation, traditional electronic sourcing solu-
tions and online marketplaces are progressively expanding into the domain of elec-
tronic invoicing networks, and conversely, these networks are also extending into the
realms of e-sourcing and electronic marketplaces.
8. Exporters and importers handle numerous cross-border invoices, in addition to a sig-
nificant volume of customs, trade, and transportation documents. These supplemen-
tary trade documents often contain information that significantly overlaps with that
found in commercial and tax invoices. Tax authorities and auditors are intensifying
their demands for documentation that verifies supplies and customs documentation.
The initial electronic invoicing network operators are venturing into this domain to pro-
vide comprehensive electronic document services to their clientele, offering a full suite
of services for exporters and importers.
9. To achieve full business automation, it is essential to also focus on solutions that iden-
tify the commencement or conclusion of the e-invoicing process. Commonly, this in-
volves integrating Enterprise Resource Planning (ERP), Customer Relationship Man-
agement (CRM), billing, and accounting systems for dispatching invoices, as well as
ERP, accounting, and approval workflow systems for invoice reception. Currently, ser-
vice providers frequently address this need through strategic partnerships with these
vendors. Conversely, these vendors are progressively incorporating e-invoicing solu-
tions into their portfolios.
It is improbable that a significant number of solution providers will possess the capability to
deliver such extensive functionality on a global scale within a feasible timeframe. Rather, it ap-
pears more likely that existing entities will use partnerships to consolidate services and appli-
cations from diverse sources, offering customers an integrated new service.
The architecture of future solutions may critically rely on existing and forthcoming legal man-
dates, in addition to facilitating real-time cooperation with tax authorities and among trade
April 2024 84
partners. The importance of platform openness, interoperability, and the endorsement of nas-
cent technologies like AI and blockchain are key components.
Given the potential for e-invoicing services to become fully regulated over time, the competi-
tive landscape for solution providers might intensify considerably. Distinguishing oneself from
rivals offering basic e-invoicing services could prove challenging. Therefore, acquiring such a
commodity service from third parties and concentrating on providing value-added services
and features that meet consumer demands might be a prudent strategy.
6.3 The Expected Transformation of the Service Provider Landscape

As the market for electronic invoicing continues to grow, an increasing number of providers
are entering the field. This expansion is anticipated to accelerate with each new e-invoicing
mandate, estimating approximately 50 new providers for each obligation. Particularly in Eu-
rope, the implementation of VAT in the Digital Age (ViDA) is expected to see around 1,000 ac-
tive providers in the e-invoicing space.
The influx of new providers primarily stems from industries whose business models are being
replaced by e-invoicing and from adjacent sectors with a direct link to e-invoicing activities.
Notably, traditional postal services, lettershops, and scanning services are examples of sec-
tors partially supplanted by e-invoicing. The shift towards mandatory electronic invoicing
poses a significant challenge for these providers, potentially eroding a substantial portion of
their current business. Consequently, there is heightened pressure within these sectors to
engage in e-invoicing as a means to offset losses and adapt to the evolving landscape.
For traditional Electronic Data Interchange (EDI) providers, the transition may only partly ap-
ply, as they are likely to meet future e-reporting and e-invoicing requirements with minimal
technical adjustments, primarily concerning data formats. However, they too must increas-
ingly adopt four-corner models to remain competitive and relevant in the changing market.
Given that invoices are central to business processes between buyers and sellers, numerous
sectors utilize or process invoice data, including payment and financing, procurement, tax au-
tomation, and Enterprise Resource Planning (ERP) system providers. For all these sectors, e-
invoicing opens up new opportunities to enhance their existing services. Whether through
streamlined processes, improved accuracy, or enhanced data analytics, the shift towards
electronic invoicing not only signifies a change in how businesses manage transactions but
also offers the potential for significant efficiency gains and innovation in business operations.
April 2024 85
In parallel with the increasing number of providers, the market is simultaneously undergoing
consolidation. In the short term, growth will outpace consolidation. Therefore, it becomes cru-
cial for providers to strategically position themselves within the market. This includes under-
standing the distinct roles providers play. The roles of Distributor, Technology Provider, and
License/Risk Provider are identified as key.
The Distributor collaborates with Technology Providers and, where applicable, License/Risk
Providers to create a seamless user experience for customers. This combined offering is inte-
grated into the existing functionality of the Distributor, who then facilitates access to the cus-
tomer. Companies already serving large customer bases are primarily suited for this role.
Technology Providers configure and maintain the technology, typically made available to Dis-
tributors via API. This can involve individual components of the Integrated Digital Trade spec-
trum or already combined solutions. Specialists in areas such as Payment, e-Procurement, or
e-invoicing, who lack access to larger customer groups or are hesitant to make such invest-
ments, find their place in this role.
Lastly, the License/Risk Provider, operating in regulated areas like Payment or Financing, pro-
vides the necessary licenses. This category also includes certified service providers specializ-
ing in licensed access to tax compliance platforms, offering their services to other providers.
At least in the short to medium term, these roles will be distinguished by different customer
segments such as small, medium-sized, and large enterprises, necessitating tailored combina-
tions of offerings depending on the segment.
Ultimately, it is imperative for service providers to be aware of their desired

market positioning and initiate the necessary steps to align with market re-
quirements in a timely manner.
6.4 Consolidation Ahead: Navigating the Evolving Landscape of E-invoicing and the
Emerging Opportunities for Service Providers
As outlined, service providers in the e-invoicing sector are poised to encounter a range of
challenges as the market evolves, including the commoditization of e-invoicing services and
the necessity for substantial capital investments. Concurrently, a significant surge in the vol-
ume of transactions, including invoices and related documents, is anticipated.
Furthermore, the proportion of transactions processed through service providers, as op-

posed to direct buyer or supplier models, is expected to witness a marked increase. This shift
April 2024 86
is primarily attributed to the escalating complexity of tax compliance regulations across vari-
ous jurisdictions, coupled with a dynamic marketplace characterized by rapidly changing re-
quirements.
However, the primary driver for this transition is the growing adoption of four and five-corner
models globally, significantly influenced in Europe by the ViDA initiative, which promotes these
models across all EU member states. Even countries traditionally dominated by two-corner
models, such as Germany and Austria, are transitioning towards a model that emphasizes the
use of service providers. In Asia, the adoption of Peppol standards by tax authorities is foster-
ing a similar shift, as Peppol inherently supports four and five-corner models. Similarly, the
North American market is beginning to embrace these models, driven by initiatives from
DBNA and collaborations with associations like OpenPeppol and GENA.
A defining feature of the four and five-corner models is their reliance on service provider net-
works, facilitating document exchange among all network participants. This characteristic po-
sitions the e-invoicing market as highly advantageous for early adopters, as a more extensive
network user base significantly enhances the network's value for new participants, who are
likely to find a majority of their business partners already on the network.
Given the anticipated increase in transaction volumes, coupled with the need
for higher investments and the benefits of being an early adopter, a signifi-
cant consolidation of the e-invoicing service provider market is expected in
the near term.
From the current count of approximately 5,000 e-invoicing service providers worldwide, this
number is projected to decline substantially over time. It is imperative for service providers to
act swiftly to achieve a critical mass within their target market segments to remain competi-
tive.
7. OpenPeppol
Read on to discover more about how Peppol enables globally interoperable eInvoicing and
consumption tax reporting to meet the needs of businesses and governments.
April 2024 87
Discovering Peppol
eInvoicing – what problem are we trying to solve?

Trade is the key driver of economic growth at both domestic and global
levels, and business success is critical for economic growth.
Every trade transaction results in a financial exchange between the buyer

and seller. In the Business-to-Consumer world (B2C), payment is almost
instantaneous, utilising either cash or the highly developed payment card
system. But in the Business-to-Business (B2B) and Business-to-
Government (B2G) sectors, almost every transaction results in an invoice,
with payment following, often weeks or months, later.
These slow payment cycles can negatively impact business. Faster invoice
processing improves cashflow and reduces business operating costs,
improving efficiency and competitiveness.
• eInvoicing helps to improve business efficiency
At a national level, the collection of consumption tax (VAT, GST etc)

typically equates to around 30% of government income. Nevertheless,
most countries experience a shortfall in their expected consumption tax
income. As an example, in the European Union, this tax gap equated to
€93bn in 2020, equivalent to 9.1% of the expected income.
Collecting the expected amount of consumption tax helps governments

to reduce borrowing and/or increase public spending, thereby improving
economic performance and competitiveness on the international stage.
• eInvoicing helps to reduce the tax gap
At Peppol, we believe that the global opportunity from eInvoicing equates:
• to around 1% of GDP from improved business efficiency
• to around 1% of GDP from increased consumption tax revenues

As businesses search for greater efficiencies and governments search for
greater income, eInvoicing provides a proven path to achieve both.
You may rightly ask why these benefits have not already been universally
realised. Read on to find out why and to discover how Peppol provides a
solution to resolve these conceptually simple problems.
About eInvoicing
eInvoicing needs to be considered in two parts:
• the eInvoice itself
• the mechanism for sending and receiving an eInvoice

An eInvoice can be defined as an invoice that is created in a structured
digital data format, designed for machine-to-machine processing without
the need for manual intervention. To achieve its function, the data
contained in an eInvoice does not need to be human readable.
It is important to recognise that an eInvoice is not a PDF, a digital image,

or a digital document created in a spreadsheet. While these formats are
human readable, they cannot be processed without manual intervention.
eInvoices are created in the IT systems of the seller and received into IT
systems of the buyer. However, since sellers and buyers typically use
different commercial off-the-shelf or customised IT systems, the ability of
the buyer to automatically receive an eInvoice is constrained, unless:
• the invoice meets a standardised data model

The Peppol Business Interoperability Specifications (BIS) utilise the
Universal Business Language (UBL), which is an ISO open standard.
However, while a standardised data model facilitates the creation of an

eInvoice, it still has to be transmitted from the seller to the buyer.
Historically, a method of data exchange was established by attaching a file

to an email, or by a point-to-point connection between each seller and
buyer (a two-corner model). This evolved with third party EDI providers
exchanging eInvoices between buyers and sellers in a three-corner model,
utilising data models individually tailored for each client.
Whilst these two and three corner data exchange methods remain in
widespread use, they either do not provide automation, or they require the
seller and buyer to use the same system or service provider.
In recent years, Peppol has led the way in establishing a four-corner model,
where eInvoices can be created in one system and received in another,
through a network of connected service providers, where the senders and
receivers choose their service provider independently of each other.
The four-corner model
As a business, you want to reach your customers and suppliers by using

your existing systems. Having to run multiple systems and processes
required by different trading partners is expensive and inefficient. The
four-corner model overcomes this problem as shown in the diagram.
In the case of an eInvoice,

the seller is shown at
Corner 1 (C1) and the buyer
is shown at Corner 4 (C4).
The service provider at

Corner 2 (C2) is appointed
by C1 to send eInvoices (and
any other electronic
business document) on his
behalf and, similarly, the
service provider at Corner 3
(C3) is appointed by C4 to
receive eInvoices on his behalf.
On receiving an eInvoice from C1, C2 creates a standardised Peppol

eInvoice for transmission to C3. Before sending the standardised eInvoice,
C2 uses validation tools to ensure that the eInvoice is compliant with the
standardised data model and can be received by C3.
The Peppol eInvoice is received by C3 who converts it to a format required

by C4, enabling the eInvoice to be consumed by the systems used by C4.
Note that both C1 and C4 operate in a non-standardised environment,

which means that they can retain their existing systems and processes.
However, as many software vendors supply systems that natively produce

and consume Peppol eInvoices, their customers at C1 and C4 are already
able to send and receive Peppol eInvoices through C2 and C3, without the
need for transformation, thereby achieving straight-through processing.
Of course, sellers are also buyers, and each use their respective service
provider to both send eInvoices (as C1) and receive eInvoices (as C4).
• only one point of connection is needed to reach the whole network

Discovery
Each service provider acts as an access point to the Peppol Network,
providing the connections in the four-corner model to ensure that each
business only needs one service provider to send and receive eInvoices.
However, in the same way that email connections and telephone networks
need to know how to route the message or call to the intended receiver, so
the access point at C2 in the four-corner model needs to discover where to
send the eInvoice. This requires an addressing service.
Before sending the eInvoice, C2 also needs to discover whether the

intended receiver at C4 is
capable of receiving the
eInvoice, requiring a
capability lookup service.
In Peppol, these addressing

and capability lookup
services are provided
through the Service
Metadata Locator (SML)
and the Service Metadata
Publisher (SMP), as shown
in the diagram.
The SMP is a decentralised registry operated by Peppol service providers.

Most, but not all, Peppol access point providers also offer SMP services,
while a minority of Peppol service providers offer SMP services only. The
SML is a central component in the Peppol Network, and is operated by the
European Commission.
To enable the addressing and capability lookup service to function, each

SMP is initially registered in the SML by the Peppol SMP service provider.
Each C3 access point then uses an SMP to register their C4 customers
(participants) in the SML. The C3 access point then registers their C4
participant receiving capabilities in an SMP, listing the Peppol
specifications that the participant can receive, such as a Peppol eInvoice.
At the transactional level, in near-real time, C2 accesses the SML to locate

the C3 service provider acting for C4, and then accesses the SMP to
discover the receiving capabilities of C4, before sending the eInvoice.
Extending the four-corner model
eInvoicing is increasingly being leveraged by tax administrations to
improve business efficiency and increase consumption tax collection,
through the introduction of Digital Reporting Requirements (DRR), also
known as Continuous Transaction Controls (CTC).
Tax administrations require data at a transactional level from businesses to

enable consumption tax to be reported in near-real time, enabling faster
collection and facilitating a reduction in the tax gap.
The Peppol four-corner model provides a solid foundation for

governments to implement DRR/CTC requirements. By adding a fifth
corner to the model, as shown in the diagram, the eInvoicing model can
simply be extended to meet the reporting requirements of tax
administrations at the same time as meeting the needs of businesses.
NON-STANDARDISED STANDARDISED REGULATED
SML C5
Addressing and
Capability Lookup
TAX
SMP
AUTHORITY
Since the required data already exists in each individual invoice, tax
administrations can leverage eInvoicing to capture the data required for
DRR/CTC. Businesses benefit by re-using a single mechanism to meet
their eInvoicing requirements and meet the needs of tax administrations.
As well as DRR/CTC, governments are beginning to require digital

reporting from businesses for other policy initiatives, such as
Environmental, Social, and Governance (ESG) reporting. By adopting the
five-corner model, businesses and governments can realise their
eInvoicing and eReporting obligations through the Peppol Network.
OpenPeppol participation
The Peppol approach to creating and exchanging eInvoices is increasingly

being adopted around the world. OpenPeppol is the international
membership association that implements Peppol, and any organisation
can apply for membership, subject to due diligence processes, in one of
four categories of membership:
• Peppol Authorities – government agencies that drive the adoption of

Peppol in their jurisdiction
• End Users – commercial and governmental organisations that are

trading partners buying and selling goods and services
• Service Providers – commercial organisations that provide Peppol

services to sellers and buyers, although some End Users may operate
their own Access Point to connect to the Peppol Network
• Observers – typically industry organisations, academic institutions,

consulting firms, and prospective members of other categories
45 20 366 593
Countries with Countries Peppol-certified Total number of

OpenPeppol With Peppol Service OpenPeppol
members Authorities Providers members
While end users are not required to be members of OpenPeppol to send

and receive Peppol messages, approaching one million end users are
registered to receive Peppol messages. Since senders of Peppol messages
do not need to be registered in the network, the total number of
organisations connected to the Peppol Network exceeds one million.
Although OpenPeppol has public and private sector members in 45

countries, Peppol messages can be sent and received by any organisation
in any country, provided they are registered in the network.
The number of registered receivers and service providers rises every week,
while typically two new Peppol Authorities are established every year.
Driving global interoperability
Exporting businesses need real-time automation with their customers to
maximise efficiency and to manage cash-flow, while tax administrations
need real-time automation to maximise consumption and customs tax
collection. The scale of cross-border trade is significant, with global exports
equating to 22% of global GDP in 2021.
Exports from countries with a Peppol Authority €20.568tn

Exports: global
equates to 32% of global exports, and exports
between countries with a Peppol Authority
equates to 39% of their combined exports.
€6.633tn
As Peppol becomes increasingly adopted Exports PA countries
around the world, the need for interoperability

€2.536tn
to support these requirements arising from between PA
countries
cross-border trade becomes ever more important.
To meet this need for global interoperability, Export values 2021 (source. World Bank)
where business can seamlessly exchange eInvoices across borders, Peppol

has developed the Peppol International Invoice, also known as PINT. This
is a development of the Peppol BIS eInvoice specifications, with three key
features that, taken together, facilitate cross-border interoperability.
Peppol has shown that there is a core dataset common to all invoice
transactions. In the PINT data model, this is the shared element, which is
business-driven, with content around trading
PINT DATA MODEL
parties, items, prices and amounts. The shared
element covers around 80% of invoice content.
The aligned element is legally driven, with the

content around tax information that varies
across jurisdictions, but can be aligned. This
typically covers around 15% of invoice content.
The distinct element covers around 5% of invoice

content, typically in relation to organisational
identifiers that are jurisdiction-specific.
Each jurisdiction will have its own PINT specification supporting both
domestic and cross-border exchange. PINT is implemented in several Asia
Pacific countries and will be extended to all jurisdictions over time.
Peppol Interoperability Framework
In isolation, the Peppol Business Interoperability Specifications and the
Peppol Network are not sufficient to create an open, interoperable, and
secure global network for the exchange of electronic business documents.
For sellers and buyers to successfully exchange business documents

across the Peppol Network, a set of rules and specifications are required to
ensure that all organisations involved in the Peppol Network act together
to provide a trusted environment.
These rules are established through the Peppol Interoperability

Framework, which provides a set of agreements, policies, procedures, and
technical specifications that collectively ensure interoperability.
The Peppol Interoperability Framework is governed by OpenPeppol and

regulates use of the Peppol Network through the Peppol Architecture
Framework and the Peppol Governance Framework.
Peppol provides a consistent approach to core specifications that apply

across all jurisdictions. However, there is flexibility, within defined
parameters and approval processes, for Peppol Authorities to introduce
national service domains and complementary message specifications.
In this way, new specifications and service areas can be incubated in a

controlled environment before being made available across the Network.
Governance Framework
OpenPeppol was established in 2012 as a follow-up to the EU-funded 2008
eProcurement/eInvoicing large-scale pilot. As a not-for-profit, member-led
international association, OpenPeppol is the legal organisation that
establishes the governance arrangements for the use of Peppol.
The stakeholders in Peppol are the:
• sellers and buyers and that send and receive eInvoices
• service providers that provide Peppol services to sellers and buyers
• Peppol Authorities that drive Peppol adoption in their jurisdiction
OpenPeppol has established standardised legal agreements that set out

the roles and responsibilities of Peppol Authorities and Peppol Service
Providers, providing an open and transparent community, and ensuring
that the technical specifications and business-level rules are consistently
applied throughout the network.
The Peppol Authority Agreement is established between OpenPeppol and

each Peppol Authority. Within defined parameters, Peppol Authorities are
able to define Peppol Authority Specific Requirements (PASR) for use of
the Peppol Network in their jurisdiction.
The Peppol Service Provider Agreement is established between each

Peppol Authority and the Peppol Service Providers that are domiciled in
their jurisdiction. If a service
provider is domiciled in a
jurisdiction without a Peppol
Authority, the Service Provider
Agreement is established between
OpenPeppol, as the Peppol
Authority, and the service provider.
The Governance Framework

includes comprehensive Policies
and Procedures for Use of the
Peppol Network, and sets out the
specifications and requirements applicable to individual service domains
and jurisdictions.
Architectural Framework
Peppol-certified Service Providers provide Peppol business document
exchange services to sellers and buyers. OpenPeppol has established a set
of technical specifications for Peppol business documents, together with
processes and specifications for the Peppol Network.
These specifications enable Peppol-certified Service Providers to deliver

the necessary semantic and technical interoperability and include:
• Peppol Business Interoperability Specifications (BIS)
• Peppol Authority governed specifications
• Packaging and Security specifications, utilising the AS4 protocol
• Messaging specifications
• Addressing and Capability Lookup specifications
The Peppol BIS standardises electronic documents for validation and

secure exchange between Peppol-certified Service Providers through the
Peppol Network, supporting sellers and buyers around the world.
A set of tools and guidance is provided for service providers to implement

the Peppol specifications and to implement the following components:
• Access Points, which are gateways that provide a standardised and

secure mechanism to exchange a range of document types
• Service Metadata Publishers (SMPs), who provide the location and

capabilities of sellers and buyers registered in the Peppol Network
• the Service Metadata Locator (SML), which maintains participant IDs

and provides a DNS-based mechanism to discover the SMP where the
data and receiving capabilities of a specific participant can be found
The Peppol Directory is a free-to-browse, open source service that makes it

easy for sellers and buyers to find each other in the Peppol Network and
identify the Peppol document types that can be received by each other.
In combination with the governance processes, security is achieved
through the use of a Public Key Infrastructure using digital certificates; the
use of AS4 as the transport protocol; and the use of an ‘envelope’ (SBDH)
to ‘wrap’ the transaction data allowing routing without access to the data.
OpenPeppol organisation
The organisation of OpenPeppol is shown in the diagram. All members of

the Association form the General Assembly which meets at least once
every year to review performance
for the prior year; to approve plans Members
and budgets for the coming year;

General Assembly
and to elect volunteers from the
membership to different positions Operating Office
Secretary Election
General Committee
in the organisation.
Agreements, Policies Managing Security
and Procedures CMB Committee Committee
The Election Committee decides on
Coordinating
the eligibility of candidates that are Committee
proposed for elected positions. CMB eDelivery End Users
Communities
Stakeholder
The Secretary General has day-to- Communities
CMB Post Award
Service
Domain
Providers
day responsibility for oversight and
Peppol
management of the Association. CMB Pre Award
Authorities
The Domain Communities cover CMB Logistics
the different service domains Continuous

Transaction
established in OpenPeppol, and Controls
lead the development of Peppol

Note: CMB = Change Management Board
specifications and related technical development activities. Change

Management Boards decide on updates and amendments to policies,
procedures, and specifications for their area of interest.
Stakeholder Communities represent the interests of their member types.
The leaders of each of the Domain and Stakeholder communities form the
Coordinating Committee, ensuring alignment on cross-cutting activities.
The Agreements, Policies and Procedures CMB is responsible for

development of the governance aspects of OpenPeppol.
The Security Committee is responsible for development of the Peppol

Security Policy and driving the importance of a strong security culture.
The Managing Committee provides oversight of all activities undertaken

by the Association, and comprises the Secretary General and two
members from each of the Stakeholder Communities.
The Operating Office supports the day-to-day activities of the Association.

Join the Peppol journey
Peppol improves business efficiency between organisations by

standardising the way electronic information is structured and exchanged.
Whilst eInvoicing is the key driver of Peppol adoption around the world,
Peppol also offers an ever expanding range of business document
specifications, most recently with the addition of logistics message types.
The Peppol framework enables Peppol CTC is a flexible approach,

interoperability and efficiency meeting the varying needs of
B2G and B2B tax administrations
The Peppol International

Invoice enables cross-border Peppol
and cross-continental Connect once – reach all
interoperability
The Peppol Network was conceived so that individual business do not

need to be members of OpenPeppol to send and receive eInvoices and
other business documents, with Peppol business document exchange
services being provided by Peppol-certified Service Providers.
If you are business and want to utilise Peppol, you can find a listing of all
Peppol-certified Service Providers on the Peppol website here:
https://peppol.org/members/peppol-certified-service-providers/
If you are a government agency and want to find out more about Peppol
and how we can help meet your needs, please email us directly.
If you are a service provider or business software developer and want to

become Peppol certified, comprehensive technical and joining
information can be found on the Peppol website.
More information
Website: www.peppol.org
eMail: [email protected]
The global e-invoicing and tax compliance report: Watch the tornado!
8. Appendix
8.1 Glossary
Throughout this report, several critical concepts are consistently mentioned. To ensure clar-
ity and avoid any confusion, the definitions provided herein apply to these concepts.
Accounts Receivable are monies owed to a supplier by its customers

AR arising in the normal course of business from the delivery of goods and
services. They are usually represented by outstanding invoices.
Accounts Payable are monies owed by a customer to its suppliers arising
AP in the normal course of business from the delivery of goods and services.
They are usually represented by outstanding invoices.
Broader concept of machines being able to carry out tasks associated
Artificial Intel- with humans around learning and problem solving. It has the cognitive
ligence, AI ability to look for and learn on certain patterns and to take appropriate
actions.
In this report includes all tax compliant invoices to corporate as well as to
B2B Invoices
the public sector; B2B & B2G/G2B
Bill Includes all categories of bills sent to consumers (B2C/G2C)
Continuous Under this framework, organizations are mandated to report invoices to
Transaction tax authorities or, at the least, furnish key invoice details electronically.
Controls (CTC) The concept includes different models such as Real-time Reporting,
models Clearance, Centralised Exchange and Decentralised CTC and Exchange.
An efficiency ratio that measures the average number of days a company
DPO
takes to pay its suppliers.
The days sales outstanding is a calculation used by a company to esti-
DSO
mate their average collection period.
E-billing covers in this report the electronic bills from Business-to-Con-
sumers (B2C). Some market participants use this term alternatively for
E-billing
the process on issuer side in general, regardless if the customer is an en-
terprise or household.
Electronic Bill Presentment and Payment; focus in B2C; this acronym is
EBPP
more popular outside Europe
Electronic Invoice Presentment and Payment; focus in B2B/B2G; this ac-
EIPP
ronym is more popular outside Europe
Electronic invoicing is the sending, receipt and storage of invoices in elec-
tronic format without the use of paper-based invoices as tax originals.
E-invoicing
Scanning incoming paper invoices or exchanging electronic invoice mes-
sages in parallel to paper-based originals is not electronic invoicing.
Integrated Digital Trade, transcending previous definitions such as Finan-
Integrated Dig- cial Supply Chain, EDI, Order-to-Cash, Procure-to-Pay, and Business Au-
ital Trade (IDT) tomation. This segment represents a holistic approach to digitally facili-
tated trade, including financial, procurement and e-reporting processes.
Infrastructure of the information society. The inter-networking of physi-
cal devices, vehicles (also referred to as ‘connected devices’ and ‘smart
Internet of
devices’), buildings, and other items - embedded with electronics, soft-
Things, IoT
ware, sensors, actuators, and network connectivity that enable these ob-
jects to collect and exchange data.
Invoice Includes in this report all categories of invoices: B2B, B2C, B2G, G2B
Issuer Invoice issuer, supplier, biller
April 2024 100

Service provider respectively operator with any-to-any model; an invoice

Network issuer or recipient needs just one interface for achieving any other coun-
operator terparty in the same network; In some countries, the terms ‘operator’,
‘service provider’, ‘consolidator’ or ‘supplier network’ are more common.
Is the business process for receiving and processing customer sales. It
follows the sales opportunity, order, delivery, invoice and payment, and
Order-to-Cash
covers both business-to-business (B2B) and business-to-consumer
(B2C) transactions.
Is the process and supporting systems that automate the purchase-to-
payment chain of activities, connecting procurement and invoicing opera-
P2P tions through an intertwined business flow that automates the process
from identification of a need, planning and budgeting, through to pro-
curement and payment.
PO Purchase Order
Point of Sale invoicing; on a classical payment receipt, the included infor-
mation is limited and the customer is normally not identified; if however,
POS and mo- the customer is identified and considered in the content of the resulting
bile invoicing confirmation document, the former payment receipt is upgraded to a
classical invoice that can automatically be processed. The same is valid
for purchases via mobile devices, e.g. train and flight tickets.
Buyer perspective for the processes of selecting vendors, establishing
Procure-to-Pay payment terms, strategic vetting, selection, the negotiation of contracts,
actual purchasing of goods, order, delivery, invoicing and payment.
Purchase-to- Buyer perspective for the processes order, delivery, invoicing and pay-
Pay ment. Purchasing is a subset of procurement.
Supply Chain Finance is defined as the use of financing and risk mitigation
practices and techniques to optimize the management of the working
capital and liquidity invested in supply chain processes and transactions.
SCF SCF is typically applied to open account trade and is triggered by supply
chain events. Visibility of underlying trade flows by the finance provider(s)
is a necessary component of such financing arrangements, which can be
enabled by a technology platform.
SME Small and Medium sized Enterprise
Buyer, Customer; The individual or organization that will receive the in-
Recipient
voice
8.2 Sources
Ref Document and/or hyperlink

European Commission, EMCS: How It Works, https://taxation-customs.ec.eu-
[1]
ropa.eu/emcs-how-it-works_en, 2019
[2] http://www.brasil-id.org.br
[3] Republic of Kazakhstan, Bidding Document
[4] European Commission, VAT Gap report 2023
[5] El Diario, Facturación electronica, un cambio imminente
Expert group (A. Kollmann, B. Koch, C. Bryant, C. van der Valk, N. Paradivskyy, R. van
[6]
Hilten): A next generation model for electronic tax reporting and invoicing, 2022
European Commission: https://taxation-customs.ec.europa.eu/taxation-1/value-
[7]
added-tax-vat/vat-digital-age_en
[8] Bain: Embedded Finance: What It Takes to Prosper in the New Value Chain
[9] https://www.onlineinvoices.com/blog/2022/06/02/late-invoice-payments/
[10] Allied Market Research: World Supply Chain Finance Report 2022
April 2024 101

Ref Document and/or hyperlink

[11] https://late.directory/payments/increase-of-late-invoice-payments/
GENA (formerly EESPA): e-Invoicing & Invoice Finance: opportunities for coopera-
[12]
tion
[13] Report of the Australian Business Registrar
[14] Atradius Payment Practices Barometer 2023
[15] BCG Global Payments Report September 2023
[16] McKinsey Global Payments Report September 2023
[17] InsiderIntelligence.com
[18] Committee on Payments and Market Infrastructures (CPMI) 2021
GENA (formerly EESPA): Opportunities in Payment services for e-Invoicing service
[19]
providers
[20] Eurostat, Enterprises having received orders online (at least 1%)
University of Oxford, The future of employment: how susceptible are jobs to comput-
[21] erisation? https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Fu-
ture_of_Employment.pdf
London School of Economics, Nine likely scenarios arising from the growing use of
software robots, http://eprints.lse.ac.uk/64032/1/blogs.lse.ac.uk-
[22]
Nine%20likely%20scenarios%20arising%20from%20the%20grow-
ing%20use%20of%20robots.pdf
Menon, R.: Bitcoin ETFs: The gateway to mainstream crypto adoption - The Eco-
[23]
nomic Times, 2024
European Commission: Sandbox Project - EBSI -. https://ec.europa.eu/digital-buil-
[24]
ding-blocks/sites/display/EBSI/Sandbox+Project, 2024
Schipp, G.: safeFBDC. Neue Risikomanagement- und Finanzierungsinstrumente für
[25] komplexe Lieferketten und ‘smarte’ Wertschöpfungsnetzwerke der Industrie 4.0.
https://safefbdc.com/index.php/use-cases-safefbdc/, 2023
Statista: DeFi - Worldwide. https://www.statista.com/outlook/fmo/digital-as-
[26]
sets/defi/worldwide, 2024
Schär, F.: Decentralized Finance: On Blockchain- and Smart Contract-Based Finan-
[27]
cial Markets, 2021
http://www.ecyclegroup.com/recycling-facts.aspx#:~:text=Approxi-
[28] mately%201.3%20billion%20inkjet%20cartridges,percent%20are%20cur-
rently%20being%20recycled.)
Ardent Partners: https://payablesplace.ardentpartners.com/2019/01/monday-first-
[29]
thing-safeguarding-environment-einvoicing-epayments/
Report by the United Nations Economic Commission for Africa:
[30] https://www.uneca.org/sites/default/files/chapterimages/era2019_eng_Chap-
ter_3.pdf
VATCalc: https://www.vatcalc.com/pakistan/pakistan-readies-centralised-e-invoic-
[31]
ing-and-fiscal-systems/
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About eInvoicing and Peppol

The global e-invoicing and tax

billentis, April 2024

Disclaimer and copyright notice

+ the source is indicated as billentis;

+ When reuse involves translations of publications or modifications to the data or text,

0. Executive Summary ........................................................................................................................ 5

2. Market Characteristics ................................................................................................................. 8

3. Market Development and Drivers: Watch the Tornado!...................................................... 31

through Strategic E-invoicing Transition .................................................................................... 48

4. The Global Market ......................................................................................................................... 53

5. Successful Implementation of E-invoicing and Integrated Digital Trade Projects ...... 65

6. Service Providers in an Ambigious Market Environment ...................................................82

+ Technology Integration: Emerging technologies such as Artificial Intelligence (AI)

The e-invoicing landscape is rapidly evolving, underscored by technological advancements and

The report draws on a comprehensive base of sources, including:

+ Financial documents that do not reflect a commercial transaction, accompanied by a

2.1.2 From Tickets to Core Invoices

Reflecting on developments a decade prior, it is observed that customers in certain forward-

Examples of ‘invoice-like documents and messages’ include:

2.1.3 E-invoicing versus E-reporting

E-reporting to tax authorities: E-reporting includes reports of business transactions, extracts

2.1.4 From E-invoicing to Integrated Digital Trade

2.1.5 How Tax Authorities Drive Integrated Digital Trade

This digital transformation encompasses approximately 25 to 30 fiscal documents, now in-

Cause Digital solution

Cause Digital solution

The impact of the VAT/ST Gap

Similar positive outcomes have been observed in Latin American nations:

2.2.2 From Periodic to Continous Transaction Controls

2.2.3 Real-time Reporting Model

The framework of this model encompasses several

Beyond adherence to fiscal rules, the model recog-

Countries exemplifying this model include Hungary and South Korea.

2.2.4 Clearance Model

+ Pre-Clearance and Post-Clearance: Predominantly, invoices are submitted to the

The process can be conducted through a single,

Countries exemplifying this model include Chile and Mexico.

2.2.5 Centralised Exchange Model

Within this paradigm, a central entity or platform

Vendors transmit their digital invoices to the cen-

However, this model presents certain challenges.

Countries exemplifying this model include Italy, Serbia, and Turkey.

2.2.6 Decentralised CTC and Exchange Model (5 corner)

The primary advantages of the five-corner model include:

+ Modular Deployment: The model's various flows

+ Tax Control Customization: Different countries

+ SME Friendly: Considering the prevalence of

2.3 Private Exchange Models

2.3.1 2 Corner Model (Buyer or Supplier direct/EDI)

+ Receives invoices directly as a data stream

This model is favored by larger organizations with

On the supplier side, an entity implements an e-

+ Sends invoices to customers via email, Apps, etc.

The supplier direct model is particularly popular in high-volume industries such as

2.3.2 3 Corner Model (network)

The first corner of the model represents the

2.3.3 4 Corner Model (Interoperability)

A notable advantage of the four-corner model lies