Electronic Invoicing in France: From Constraint to Opportunity

The subject of e-invoicing has been on the global scene for some time and the most recent Billentis report provides a relevant overview, categorizing countries according to the state of their adoption of e-invoicing into: Leaders (champions of adoption), Average (average adoption), Developing (being implemented), Laggards (countries lagging behind in implementation).

Global e-Invoicing Market Overview and Forecast 2021

Why is this an important topic? Because the benefits speak for themselves. E-invoicing dramatically reduces the cost of processing an invoice, decreases the likelihood of invoice disputes, eliminates manual entry errors, increases visibility into payment timelines, increases overall tax compliance, and reduces reliance on processing paper bills, and therefore creates a greener and more sustainable workplace.

At the European level, in 2014 the EU published Directive 2014/55/EU on electronic invoicing and public procurement. Some countries such as France, Germany and Italy have made good progress in implementing the directive.

In France, all companies must be able to receive electronic invoices starting from 2024

In France, since January 1, 2020, companies are required to send their invoices to the public sector in electronic format. Later on, the Finance Law of 2020 introduced the obligation of electronic invoicing in exchanges between companies subject to VAT, established in France. The order of September 15, 2021 (Official Journal of September 16, 2021) defines the legal framework necessary for the generalization of electronic invoicing for these transactions.

Electronic invoicing obligations will be imposed:

  • from July 1, 2024, in reception, to all taxable companies
  • from July 1, 2024, in transmission, to large companies
  • from January 1, 2025 to medium-sized companies
  • from 1 January 2026 to small and medium companies and microenterprises.

After having had a positive experience with this system, the French government has developed a balanced framework for B2B (Business-to-Business) as well as B2C (Business-to-Customer) transactions in the future. At this point, exact specs on what the technical implementation will look like have yet to be released. But the official ordinance no. 2021-1190 from September 15th, 2021, set the main lines of this reform:

  • The ordinance provides for a two-component solution mandating electronic invoicing (e-invoicing) and electronic transmission of transaction data (e-reporting).
  • Receipt of e-invoices will be mandatory for all businesses subject to VAT from July 1, 2024. Roll-out of mandatory issuance of e-invoices depends on business size: July 1st, 2024 for all businesses, January 1st, 2025 for medium-sized enterprises and January 1st 2026 for medium and small enterprises and microenterprises.
  • Mandatory electronic reporting will be rolled out on the same extended calendar.

The French government has chosen the “Y” model: companies can choose between a state-certified private dematerialization platform or the public portal, Chorus Pro, which already manages electronic invoicing for the public sector (B2G). This choice will depend on the digital maturity of each company: those already equipped with an electronic invoicing system will be able to make their investment profitable. Others will have to invest in a private solution or choose to work with Chorus Pro. At present, the Chorus portal has about 54 million invoices and it is estimated that from 2026 – when all businesses will have switched to using e-invoicing, this national platform will have to support about 4 billion invoices!

The Y model makes it possible to choose between a private dematerialization platform certified by the State or the public portal.

This reform will concern 4 million French and foreign companies registered for VAT in France. As mentioned, from July 1, 2024, all businesses must be able to receive electronic invoices. This means that they must now focus on this strategic subject to be ready and carry out their project with complete resolution.

How to prepare to switch to this new invoicing system?

First of all, companies should make a full check of their present situation and ensure that, at the tax level, they respect the already existing invoicing legal mentions, that everything is done correctly with regard to the treatment of VAT applied to transactions, to have an overview of the flows of incoming and outgoing invoices, whether the invoices are on paper, or pdf., or images etc. This helps them understand their environment in order to better take advantage of this reform.

There are 26 invoicing rules today that you need to integrate into your system and a huge opportunity to use automation platforms to your advantage. Digitization allows you to make a perfect match between the information mentioned on your supplier invoices and the information required by the State, then between the invoices you receive from your suppliers and the mandatory information requested by your internal system (ERP).

In addition, an external specifications file was published in October last year, with the aim of defining the context and objectives of electronic invoicing, its regulatory framework, the functional description of the solution and the formats relating to the flow of documents. ‘exchange. These specifications describe 3 possibilities for transmitting the electronic invoice to the tax authorities:

1. Directly in the public billing portal. This allows companies to submit invoices, created by them in a structured or mixed format, under the form of a flow:

  • By uploading the file to the portal;
  • By file transfer, using one of the available protocols (SFTP, AS2, AS4);
  • By file transfer, using the API provided.

Upon receipt, the public billing portal checks the data.

2. Through a dematerialization operator (OD) which can offer a value-added service to companies for the management of invoices issued and received. It may replace its customers for all automated actions (EDI or API mode) carried out on invoices with the platforms chosen by them. On the other hand, it will not be authorized to send invoices to recipient platforms, nor to extract data for the administration.

3. Through a partner dematerialization platform (PDP) offering enhanced services compared to the public billing portal with the possibility of using formats that are not part of the minimum base (depending on the platform’s service offer). The partner dematerialization platform chosen by the supplier (issue platform) will have the possibility to directly transmit the invoice to the buyer’s platform. If the latter is also a PDP, then the issuing platform must transmit the data extraction to the administration (to the public billing portal). The partner dematerialization platform chosen by the buyer (reception platform) will be able to update the directory on his behalf, for the management of data which concerns him.

The Y invoicing system chosen as part of the reform requires the implementation of a directory allowing the various partner dematerialization platforms to send invoices to recipients and to secure B2B exchanges. Thus the directory is a key resource of the public invoicing portal made available to companies to send invoices, statuses and invoicing data to the right recipient, whether in portal, EDI or service mode. This service is offered by the public invoicing portal to partner dematerialization platforms to ensure the routing of invoices. It is a reliable database that can feed the directories of PDPs in order to guarantee the reliability of exchanges.

All this to start preparing.

From constraint to opportunity

Like any development, it is important to ask the right questions and not wait until the last moment to launch your project because it will affect the business, tax and IT departments as well. Why not take advantage of this opportunity to reassess and digitize all your processes?

The transition to electronic invoicing represents a great opportunity to stand out, automate many time-consuming tasks and nurture relationships of trust with business partners. The fact of choosing an automation platform capable not only of relieving you of the trouble of dematerializing and processing your invoices, but above all of protecting you from legal compliance with regard to the information which must be contained on a invoice, can offer you many other value-added services.

We have developed an electronic invoicing solution allowing you to gain complete visibility into accounting processes and ensure your global compliance, helping you to optimize your invoice processing. It is also available for B2B transactions.

Your benefits?

  • Sending and receiving invoices: You can exchange all invoices electronically and securely, regardless of your partners’ invoicing capabilities or desired formats (paper, PDF, EDI, XML, etc.).
  • Compliance and traceability: You reduce the risk of penalties related to non-compliance with regulations. You can ensure your tax compliance with advanced tax checks and calculations.
  • Compatibility: You can issue or receive invoices in seconds. Our solution is compatible with Peppol protocols and with more than 200 ERP systems and required file formats.
  • No errors or missing invoices: You ensure the integrity of even the most complex invoices thanks to our advanced reconciliation system which checks the consistency of data between as many documents and types of documents as necessary.
  • Data security and compliance: Protect documents from sending to receiving, thanks to our secure transfer protocols and extensive security measures, as well as a multi-level backup process.

We help you connect to your partner ecosystem to send purchase orders, receive invoices electronically and manage their data, allowing you to eliminate manual processes, reduce processing costs and ensure compliance global with protocols such as Peppol, IDOC, cXML, UBL, EDIFACT, OIOUBL etc.

And since your business operations and processes do not exist in a vacuum and communication between you and your partners runs through complex systems, you need smart solutions to help you take control of your internal processes, as well as on those that connect you to your business ecosystem. Choosing the automation platform that best suits your needs isn’t always easy, but before you decide, don’t forget to consider the major benefit you’ll get in return, which is being able to transform your business ecosystem in a catalyst for growth.

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