THE #E-INVOICING BREAK : PART II

In the first part of our e-invoicing #pause series, we looked at what e-invoicing is, what's at stake and what the key dates ahead are.

As a reminder, electronic invoicing will become compulsory from 1 July 2024 in France, with the aim of combating VAT fraud, reducing administrative costs and improving business competitiveness. All the businesses concerned need to start preparing now, so that they are ready to receive invoices in electronic format and benefit from this change.

In this second part, we look at the impact of the e-invoicing reform on invoicing processes. But you also need to be aware of the opportunities offered by this new reform and the risks if you fail to plan ahead.

 

What is e-invoicing and e-reporting?

Firstly, e-invoicing is the process of creating, sending and receiving invoices in electronic form, eliminating the need for physical paper invoices. E-invoicing applies to transactions between entities subject to VAT in France (B2B).

E-reporting (transmission of transaction data) is the obligation to transmit transaction data to the tax authorities to facilitate tax monitoring and the collection of information for statistical purposes. E-reporting applies to transactions not covered by e-invoicing, i.e. transactions with private customers (B2C) or with foreign operators (businesses or private individuals).

In order to determine whether a transaction falls within the scope of e-invoicing or e-reporting, it is therefore necessary to analyse both the geographical scope (France or international) and the nature (B2B or B2C) of the transaction.

The table below summarises the scope of application:

What opportunities does the reform of electronic invoicing offer businesses?

Electronic invoicing offers a number of significant advantages for businesses, including:

• Reduced costs: savings on stationery, printing and mailing invoices, as well as lower management costs by avoiding errors associated with manual data entry.
• Improved efficiency: electronic invoicing processes can be integrated with internal business systems, such as accounting and stock management systems, enabling smoother synchronisation of data and better information management.
• Faster payments: By sending electronic invoices, companies can speed up the payment process. Electronic invoices are generally received more quickly than paper invoices, reducing payment times.
• Improved traceability: Electronic invoices can be easily stored, consulted and archived electronically. This improves the traceability of transactions and makes it easier to retrieve information if necessary, for example in the event of a tax audit or a dispute with a customer.
• Improved quality of service: Between customers and suppliers, thanks to simplified and more reliable invoicing flows.

 

What are the risks of failing to anticipate?

Failure to anticipate e-invoicing reform can entail a number of risks for a company. Here are some of the most common risks:

• Legal non-compliance: A company that fails to comply with the new e-invoicing requirements imposed by the reform could face fines.
• Disruption to business operations: Failure to prepare adequately can lead to disruption to business operations. If a company fails to put in place the necessary systems and processes to manage e-invoicing, this can lead to delays in issuing invoices, errors in their content or transmission, and a deterioration in customer relations.
• Loss of competitiveness: Adopting e-invoicing can offer competitive advantages to businesses that implement it effectively. By automating invoicing processes, businesses can reduce costs, speed up payments, improve data accuracy and deliver a better customer experience. By failing to adapt to this trend, a company risks losing out to competitors who have anticipated electronic invoicing.
• Increased administrative complexity: Moving to electronic invoicing can introduce additional administrative complexity, especially if a company has not planned for the resources and skills needed to manage this change. It may be necessary to set up appropriate IT systems, train staff and review internal processes. Lack of preparation can lead to overwork, errors and increased administrative costs.
• Brand image and customer relations affected: If a company fails to adapt effectively to electronic invoicing, this can have a negative impact on its brand image and customer relations. Customers may perceive the company as lagging behind technological standards and unreliable in terms of administrative management. This can lead to a loss of confidence and a preference for competitors who offer a smoother, more efficient invoicing experience.

It is therefore essential for businesses to take proactive steps to anticipate and comply with the reform of electronic invoicing in France, to minimise these potential risks.

Our team can help you with this.