E-invoicing Mandate | France 2024
by Steve Carter
The biggest change to Accounts Payables since the introduction of double entry journals is about to hit finance departments–but are they prepared? This is a massive and unstoppable inflection point that will both rock and revolutionise how a business processes its Invoices. Whether we’re prepared or not, this game-changer will completely reshape how businesses handle their AP operations.
The first and most visible element of this change are the emergence of Government tax networks or Continuous Transaction Controls (CTC) systems. It’s already hit most Latin American countries, India, China and Italy, but the next big wave hits France in 2024. CTC systems not only enable governments to streamline Supplier Invoice tracking and monitor tax reporting–but keep an eye on unpaid VAT as well; truly revolutionising our approach on how taxes will be collected going forward!
From the outside, France 2024 appears simple–even trivial, but the impact is extraordinary. And France is not alone in Europe. Almost all governments are looking to onboard CTCs, with most of Europe being covered by 2026. Europe will join Latin America, India, China, and other countries already on the path to real-time tax collection. What are the implications? Every supplier will be forced to send Government approved invoices to their clients. In addition, AP teams will need to support both Government tax systems and non-electronic invoices at the same time. With each country presenting different reporting needs, invoice formats, and compliance needs, the process complexity can be overwhelming.
Unfortunately, this just won’t work if the AP process is locked behind “old school” networks like Basware, Coupa, Tungsten, or Ariba. Why? Because a network is an unneeded link in the data chain and it acts as a data barrier to suppliers. The solution is to create an Invoice Hub with gateways to each of the different Governments. This Hub approach gives your suppliers one view of the AP process, enabling them to instantly check invoice receipt, status and payments information. Suppliers can now pre-match invoices, removing the complexity of exceptions in the CTC world.
When done right, this inflection point is a chance for AP teams to go supersonic. Instant invoice approval, no supplier inquiries, and no exceptions. The AP team moves from invoicing to supplier expectation management, becoming an embedded Finance team. As supply chains flip from a buyer to seller driven market, maximising the benefits of CTCs will remove the gaps from the process.
There is a second reason networks are no longer necessary–because anyone who understands Tax knows you can’t pass this risk to a third party. With the modern understanding of Tax, it’s clear that organisations need to own their own risk. To do this securely and efficiently in today’s environment, an AP team needs a continuous improvement platform like Ivalua; one which helps them continuously control, improve, and update their whole payments journey. Critically, they must also work with internal or external tax experts to take control of their own global tax risk.
The European Union has been embarking on a journey to implement new VAT regulations which would enable cross-border tax collection. While this is still in the works, Ivalua remains one step ahead with CTC networks that are ready to revolutionise your AP team’s workflow. Our solutions will make sure you’ll be well prepared for when France 2024 turns into an industry game changer!
The question is not if this is happening, but whether–how are you going to maximise the AP opportunity to bring tax risk and global invoicing under control? Taking control of tax risks and international invoicing can be proactive steps toward success. The time is now – let’s get an action plan together!
Spanning a 30-year career, Stephen has led successful global product marketing launches alongside procurement experts and finance professionals in both the public and private sector. As a longstanding contributor in the ever-evolving sourcing industry—from early OCR—to the establishment of eInvoicing Networks, Stephen now applies his extensive tech experience to Ivalua’s unified Procurement platform. A problem solver and industry thought leader, his product positioning is central to generating long-term customer value while streamlining user experience. In software development, adaptability is the key and Steve’s commitment to the future of procurement is propelling Ivalua toward the next generation of strategic payment solutions. Outside of his professional life, Steve is a published author and 17th Century historian.