E-billing mandatory from 2020 for all government suppliers

The e-invoice has been a done deal for quite a while. Legislators decided that this should be mandatory for the highest federal authorities from November 2018, and from 2019, all other German public offices will have to follow suit. The final step, scheduled for November 2020, will also be of great importance to many private companies. This stipulates that all suppliers to German public authorities must also use e-billing. According to estimates, about 300,000 businesses will be affected. However, a survey by Wirtschaftswoche magazine revealed that preparations for this change were far from satisfactory and that there is a worrying lack of awareness among companies.

Widespread lack of knowledge about the use of e-billing

In this survey, 88 percent of participants said they understood what an e-bill was. Although this result may initially sound quite positive, the majority of respondents were mistaken: they believed that a PDF document sent as an attachment to an email was an electronic invoice. This is the view offered by 68 percent of all respondents. Taken together with the 21 percent who stated at the outset that they did not know what an e-bill was, this represents an enormous knowledge gap. This ignorance could have serious consequences when the new regulation comes into force.

Change makes sense for many companies

An e-invoice is a dataset that adopts the precise structure prescribed by the government. It is stored and forwarded as an XML document. This approach has the great advantage of enabling simple and automated processing, which has the potential to bring enormous savings for public authorities. However, this conversion also has advantages for companies, regardless of whether they are obliged to comply as suppliers to an authority. In addition to simplified processing, these invoices make archiving a simpler process. It is thus very important for all financial decision-makers to address this new form of invoicing.

This article was originally published on LinkedIn.

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