The 2024 e-invoicing reform
The e-invoicing landscape in France has been undergoing major transformations for several years, and this trend is not about to stop.
E-invoicing, which has already been progressively imposed since January 1, 2017 for transactions with the public sector, will be extended to all business-to-business transactions. The objective of this reform, established by the 2020 Finance Act, is to simplify invoicing and payment processes while optimizing VAT collection.
Companies will be required to be able to receive and issue invoices in electronic format according to a deployment timeline that has been defined taking into account the size of the companies.
Options for transmitting invoicing data
Companies will be required to receive and transmit invoices in one of the formats made mandatory by the reform, no longer directly, but either through a public invoicing platform or through a private platform approved by the Ministry of Economy and Finance.
Depending on the option you choose, different services will be made available to your company.
By opting for the PPF (French Public Invoicing Portal), you select the minimum service level required by the reform. This already includes a number of benefits.
Reduction of administrative burdens
Automation of VAT declaration
The PPF (French Public Invoicing Portal) allows you to automate tedious administrative tasks. This frees up time for administrative staff to focus on other important tasks.
Error reduction
Human errors, such as typos, are common in manual invoicing. E-invoicing minimizes these errors, thereby improving accuracy and efficiency.
Accessibility
Electronic invoices can be consulted at any time and from anywhere. This simplifies the management process for suppliers and customers.
Simplified tracking
With e-invoicing, you can easily track the status of all invoices sent to your customer recipients. You can see who has paid, who still needs to pay, and who is late on their payments.
Reduction of postal delivery and archiving costs
E-invoicing eliminates the need to print and mail invoices, which can lead to significant savings in time and material costs. Furthermore, it also simplifies archiving processes.
Reduction of tax audits and fines
The e-invoicing reform will help reduce the duration and impact of tax audits and fines.
Reduction of human errors
Human error is one of the most common causes of tax errors. E-invoicing eliminates much of this problem because calculations are performed automatically, thus minimizing the risk of error.
Automatic compliance
Invoicing platforms can be updated to reflect changes in tax laws, which means companies can stay compliant without additional effort.
Real-time visibility for the tax authorities
E-invoicing systems enable real-time financial reporting, which means companies and tax authorities can have a real-time overview of the tax situation. This can help prevent issues before they lead to tax audits or fines.
Automatic generation of the reliable audit trail
The reliable audit trail, according to the tax authorities, encompasses all the mechanisms that the company must implement to be able to demonstrate to the tax authorities the economic reality of the invoiced operation. The reliable audit trail will remain mandatory and the objective of the reform is not to eliminate the reliable audit trail, but rather to strengthen it.
Time savings and stress reduction during audits
Tax audits can be extremely lengthy, often requiring intensive preparation, meetings with auditors, and possible correction of discovered errors. Tax fines can also be costly in time and require in-depth analysis to understand what went wrong. Tax audits are also perceived as stressful events by companies, due to the amount of work they involve and the uncertainty about their outcome. With e-invoicing, companies will have greater confidence in the accuracy of their financial documents and will be able to approach these audits with less anxiety.
Fraud protection with the shared directory
To guarantee the identity of companies prior to a transaction, the reform provides for the implementation of a shared directory so that invoices can be addressed to the correct recipients and to simplify KYB (Know Your Business) processes.
The directory has been designed according to 5 key principles:
Centralization: It brings together all identification information for the actors concerned by the reform.
Interoperability: It is accessible to all authorized platforms.
Accuracy: It guarantees the accuracy and completeness of information through regular updates.
Security: It ensures the security and traceability of data and its updates.
Unique identifier: It allows issuing companies to know precisely the receipt level of their partners' invoices and the information to be indicated on the invoices.
Contribution to the environmental effort
According to a study conducted by the EcoInfo Service Group (CNRS, INRIA, ParisTech, etc.), the digital invoice logically proves to be less impactful for the environment if it is never printed and if its online consultation is limited to less than 30 minutes.
E-invoicing reduces paper use and waste production, optimizes resource use, and limits the need for transport. Thus, it contributes to reducing deforestation, water pollution, and greenhouse gas emissions.
Conclusion
All the benefits mentioned are directly tied to the legal constraints imposed by the reform. For a company, implementing the minimum threshold to comply with the regulations, i.e., the use of the PPF (French Public Invoicing Portal), should enable it to benefit from these advantages.
However, it is possible to go even further to fully exploit the benefits of the e-invoicing reform. To do this, you can choose a private dematerialization platform such as Flowie.
To understand how to fully benefit from the reform, I invite you to consult the white paper "The opportunity of the e-invoicing reform for my business".