Big changes are coming to the e-invoicing market, thanks to EU directive 2014/55/EU. Public sector organisations in Europe must be able to receive and process EU compliant e-invoices from their suppliers by April 18th 2020, at the latest. The objective is to standardise invoice content, making it easier and cheaper for local government and central government to process them.
Assuming the UK doesn’t crash out of the EU without a deal, public sector entities in the UK will be compelled to receive EU compliant electronic invoices by April 2020. Scotland has already transposed this into law after consultation with various trade and government organisations, including the NHS, and it has yielded an overwhelmingly positive response. This move is long overdue in order to deliver automation and efficiencies in today's supply chains.
In fact, much progress has already been made, with dozens of NHS organisations in the UK adopting Pan European Public Procurement Online (PEPPOL), an implementation of the EU directive which relies on the 4 corner model mandated by the Department Of Health. Adoption is accelerating in the healthcare sector, with 60 NHS Trusts now in a position to receive PEPPOL Invoices, up from only 7 at the start of the year. We expect this to rise to 250 by the summer. You can find a full list of these organisations here.
But PEPPOL is just one implementation of the wider EU directive. In 2018, nearly £50 billion was spent on UK public sector contracts, and the number of contracts awarded grew by around 21% to 40,130. The number of private companies selling to the public sector is growing and we know from case studies in other countries that when the public sector starts to mandate e-invoicing and e-trading standards, the private sector follows. So, the adoption of PEPPOL in the public sector bodes well for automation of supply chains in the private sector.
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Clearly the Brexit situation is very fluid, but many still see a deal as the most likely outcome. This means that public sector organisations in the UK who are already upgrading their e-invoicing operations should continue to do so. For those still on the fence, it would be prudent to take action.
An orderly Brexit, facilitated by some sort of deal with the EU, will be a hugely positive development for e-invoicing in the UK. Compelling public sector entities to take action and join the e-invoicing revolution. It’s not just about invoicing in the NHS – the directive is starting the process of digital transformation of the purchase-to-pay process across both public and private sectors.
The future of electronic invoicing in the UK is in the hands of our politicians. We live in chaotic and confusing times, so to get a better understanding of where you stand as an organisation with regards to PEPPOL and e-invoicing, contact CloudTrade today.