e-invoicee-invoiceThe role of the Public Administration in the

promotion of e-invoice in SMEs

Electronic invoicing in EuropeApril 2010

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1. The role of the Spanish Ministry of Industry in the promotion of e-invoice

2. E-invoice adoption by SMEs as part of the general ITC uptake: Public Consultation

3. Equality of treatment and mandatory use of e-invoice

4. The need for strong normalization and the national factor

5. Active policies of the Public Administration

Summary

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1. The Spanish Ministry of Industry (Information Society and Telecommunications) and its experience in the use of e-invoicing

1. Competences in Information Society Promotion (Plan Avanza: subsidies for einvoice in SMEs and municipalities)

2. Competences in the Regulation of Telecommunications

3. Competences in the Regulation of the Industry and Energy Sectors

4. Author of Information Society Promotion Law of 2007, regulating –among others- use of einvoice in entreprises.

5. Competences in the promotion of national id e-card (e-DNI)

6. The Ministry can receive einvoices from public purchases in a e-signed XML format (national facturae) since end 2008 and has adapted accordingly its internal ERP systems.

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2. Are the SMEs equipped to shift to e-invoincing (Consultation): Use of Internet by micro-SMEs

(*): Spanish data. ONTSI Red.es

Information search

E-banking

E-learnig

Watch markets

Warranties

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2. Are the SMEs equipped to shift to e-invoincing (Consultation): Use of automated data interchanges by micro-SMEs

(*): Spanish data. ONTSI Red.es5

E-banking

E-Government

Product information

Orders to providers

Logistics

E-invoicing reception

E-invoicing sending

Orders reception

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1. Low e-invoice cost and cycle time savings by SMEs: Driving force shall be general ITC uptake and legal regulations in the national market, since very low cross-border activity

2. No technologycal or mindset problem, but ROI analysis. E-invoice as a service vs paper invoices

3. Some discouraging data about SMEs and e-services(*):

1. Micro-SMEs: 56% wideband access to Internet

2. Micro-SMEs: 1,5% Extranet service

3. Micro-SMEs: 49% email service (average)

4. Worst wideband situation in sectors like construction, retail shopping, transport

4. E-invoice drivers and enablers for SMEs:

1. Popular software packages: ERPs

2. Already outsourced services like accounting, payroll, taxes

3. Affordable service providers: < 3.000 € economic threshold for micro-SMEs.

2. Are the SMEs equipped to shift to e-invoincing (Consultation): E-invoice adoption by SMEs as part of the general ITC uptake

6(*): Spanish data. ONTSI Red.es

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1. Equality of treatment (paper-electronic) difficult be achieved due to different nature and different processing requirements and expectations.

2. E-Invoice promotion events show slow response in the short term (see case of tax e-clearance wirh exponential uptake curve), specially in a crisis situation:

1. Mandatory use for certain enterprises according to size and sector

2. Mandatory use for the Public Sector in public procurement

3. Role of professional associations in the promotion of einvoice

4. Role of the banking system

5. Lack of mass adoption and unaddressed market segments need specific national legal initiatives

3. Equality of treatment and mandatory use of e-invoice

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1. Annex 7 of Expert Group on e-invoicing insufficent for automated machine-to-machine communication.

2. UN/CEFACT CII convergence not expected in the short term

3. Until VAT full harmonization, national regulation in the Public Administration is decisive for einvoice

4. Existence of National Public Procurement legislation

5. Format and protocol deluge is inhibitor

4. The need for strong normalization and the national factor

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5. Active policies of the Public Sector

(*): Spanish data

1. Zero cost entry for micro-SMEs:

1. One-time subsidies and loans

2. Free of charge software for einvoice management (send/receiving, e-archiving).

3. Creation of Einvoice service providers until affordable market for SMEs (see role of Spanish FNMT-RCM)

2. Creation of national einvoincing bodies to develope transition solutions and overcome sectoral interests and fragmentation

3. Creation of public reception-hubs for public procurement in national and regional level

4. Define data subsets for 80% cases

5. Supply authentity and integrity tools until market established 9

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Thank you very much!

camaza@mityc.es

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