By 2024-2026, a significant change is on the horizon for micro-businesses and SMBs (small and medium businesses): mandatory e-invoicing. While the majority of them, 70% according to the 2022 France Num Barometer, already use invoicing software, a significant portion still ignores the ins and outs of this reform. Let's see together what this transition involves and how to anticipate it as best as possible.

What Is an Electronic Invoice?

It is important to differentiate a digital invoice from an electronic invoice. An electronic invoice is an invoice issued, transmitted, and received in a standardized electronic format that integrates structured data. The mere fact of sending and receiving an invoice through digital means is not enough to make it an electronic invoice.

E-Invoicing Becomes Mandatory

E-invoicing is becoming widespread. Already mandatory for public procurement since 2020, it will progressively extend to inter-company exchanges and associations subject to VAT and established in France.

  • Starting July 1, 2024, all businesses must be able to receive invoices in electronic format.
  • As of January 1, 2026, SMBs and micro-businesses must be able to issue their invoices in electronic format.

With this format, mandatory information will need to be respected:

  • The SIREN number
  • The delivery address of the goods, when it is different from the customer's address
  • Information on the types of operations giving rise to an invoice: deliveries of goods, services, or both
  • The mention of the option for VAT on debits by the supplier, if applicable.

This obligation is accompanied by another requirement: sharing with the tax administration all data relating to operations that have an impact on VAT.

Beyond the obligation, e-invoicing offers major benefits for businesses: time savings, cost savings, easier invoice tracking, improved payment terms, simplification of administrative procedures, and even improved fraud detection.

Opportunities Associated with the Implementation of E-Invoicing

  1. Efficiency and time savings: With e-invoicing, the invoicing process becomes faster and more efficient. Automating this task reduces the time required to create, send, and track invoices. This can free up valuable time for staff, who can then focus on more strategic tasks.
  2. Cost reduction: E-invoicing can also enable significant cost reduction. By eliminating the need for printing, paper, envelopes, and postage costs, businesses can achieve substantial savings. In addition, time and efficiency savings often translate into reduced operational costs.
  3. Treasury optimization: The reform makes invoice tracking easier, which can lead to improved payment terms. More efficient tracking can contribute to better treasury management, a key element of a company's financial health.
  4. Simplification of administrative procedures: Eventually, e-invoicing can help simplify administrative procedures. For example, the pre-filling of the VAT return could become a reality, thus reducing the time and effort required for this task.
  5. Improved traceability: Electronic invoices offer better traceability than paper invoices. They can be easily archived and retrieved, which facilitates document management and can be useful in case of an audit. In addition, automating the invoicing process can reduce errors, which can improve accuracy and compliance.
  6. Fraud detection and better business intelligence: E-invoicing can improve fraud detection, while offering real-time knowledge of business activity. This can be beneficial for good-faith businesses, as better visibility can help identify and quickly correct anomalies.
  7. Contribution to environmental protection: By switching to e-invoicing, businesses can also contribute to environmental protection by reducing their paper consumption. This is a way for them to demonstrate their commitment to sustainability, which can be appreciated by their customers and stakeholders.
  8. Better data management: E-invoicing allows for better data management. Electronic invoices can be easily integrated into the company's management systems, which facilitates data analysis and data-driven decision-making.

How to Implement E-Invoicing?

The implementation of e-invoicing depends on the volume of invoices your company produces each year. There are several options to consider:

  1. Entrust management to your accountant: If you wish, you can delegate to them the transmission and reception of your electronic invoices, as well as the transmission of transaction and payment data.
  2. Manage manually: For businesses with a low volume of invoices, it will be possible to fulfill its obligations manually using the services made available by certain public platforms.
  3. Use a specialized provider: For businesses with a large volume of invoices, using a specialized provider in e-invoicing can prove interesting. They provide solutions tailored to each business, capable of processing a large volume of invoices and integrating data into their existing systems.

Options for the Transmission of E-Invoicing Data

The successful implementation of e-invoicing requires an appropriate solution for data transmission. Several options will be available for businesses: PDPs (Partner Dematerialization Platforms), the PPF (French Public Invoicing Portal), and ODs (Dematerialization Operators).

PDPs (Partner Dematerialization Platforms): These platforms, which will be registered by the tax administration starting at the end of 2023, will be authorized to transmit invoices to their recipients and invoice or transaction data to the administration.

PPF (French Public Invoicing Portal): This is a system put in place directly by the administration, offering features similar to PDPs, in a minimum service logic.

ODs (Dematerialization Operators): ODs ensure exchanges with a PDP or the PPF.

For businesses that generate a high volume of invoices, the use of services from a registered PDP or a Dematerialization Operator (OD) can be a wise solution.

Preparing for the Transition

For an effective transition to e-invoicing, several steps need to be considered:

  1. Familiarize yourself with e-invoicing standards: To be compliant with the law, electronic invoices must be structured according to a specific standard. In France, the standard in force is the Factur-X standard.
  2. Choose the right solution for your business: As mentioned previously, the choice of solution will depend on the size of your business, the volume of invoices you manage, and your budget.
  3. Plan the transition: The transition to e-invoicing must be planned to minimize the impact on your activities. Set an implementation date, inform your suppliers, your customers, and your team, and plan a testing period before the launch.
  4. Train yourself and your team: It is essential to have a good understanding of how e-invoicing works and to ensure the training of your team. Make sure everyone is comfortable with the new procedures.

In conclusion, the e-invoicing reform is a major step forward for SMBs and micro-businesses. While it imposes a number of constraints, it also opens up new perspectives for efficiency and time savings. By anticipating this change and preparing properly, you will position your business in a strong position for the future. The platform developed by Flowie reinvents accounts receivable and payable management to meet the requirements of the reform while allowing you to improve and accelerate your accounting and financial processes.

‍