Digitalisation of companies is in full swing… and this trend is being accompanied by unavoidable regulatory change. E-invoicing is part of this shift, indeed, it is already mandatory for all professionals in certain markets. In effect, since 1 January 2020, entities working with the public sector are required to transmit their invoices in digital format, via a dedicated platform (Chorus Pro), and use a digital signature to do so. In this article, we provide you with a review of the obligatory requirements of the electronic invoice, and the advantages that companies – particularly small and mid-sized companies – can benefit from.
Electronic invoicing: what are the obligatory requirements (current and future) imposed on companies?
What is an electronic invoice?
An electronic invoice is not just a simple copy/paste of its paper version, even though all of the same data is present!
In fact, the term electronic invoice describes the range of processes involved in printing, transferring and receiving an invoice exclusively by electronic means. This invoice contains a minimum amount of structured data, which differentiates it from an ordinary PDF (in accordance with the French general tax code, Art. 289 bis).
The obligatory requirement to invoice customers electronically
At present, the obligatory requirement for companies to electronically invoice is conditional on the type of market. In fact, only services provided by companies to the public sector require the use of digital invoices, transmitted via Chorus Pro. This obligatory requirement has been in force since 2020 for all private companies.
Nevertheless, the legislator plans to gradually extend the use of electronic invoices to all markets. The amended French Finance Act for 2022 (via Article 26) makes the use of electronic invoices obligatory for exchanges between companies subject to VAT and established in France, based on the following timetable depending on the size of the company:
- From 1 July 2024 for major companies.
- From 1 July 2025 for mid-sized companies (SMEs).
- From 1 January 2026 for small and mid-sized companies, very small companies and micro companies.
What are the benefits of the electronic invoice?
The government’s desire to impose the use of electronic invoicing in commercial exchanges is motivated by a number of advantages. What are they?
What electronic invoicing changes for companies
For all companies, the invoicing reform aims to:
- ease the burden of administration, to boost productivity and strengthen competitiveness;
- strengthen the fight against fraud, to favour a more loyal competitive ecosystem;
- simplify declaration obligations in terms of VAT (via pre-filling of declarations);
- improve knowledge of company business in real time, with bills saved to secure clouds, guaranteeing the identity of the issuer and the integrity of the document;
- reduce costs (according to BVA/Markess, the electronic invoice enables a saving of up to 75% on issuance costs – read here).
The concrete advantages of the electronic invoice for very small and small & mid-sized companies
Very small companies, small & mid-sized companies and micro-companies make up 99.9% of the French corporate landscape. The move to electronic invoicing represents advantages for this ecosystem, particularly exposed to fraud, overdue payments and cyber risk.
As a result, apart from the advantages mentioned above (and an overall gain of more than 4.5 billion euro per year, according to the calculations in the amended French Finance Act), electronic invoicing offers three major guarantees to very small and small & mid-sized companies:
- Compliance with regulations – mentions to be included in invoices and time-stamping to certify the integrity of documents.
- Tighter control of processing and payment times, for optimised cash flow management.
Unchallengeable traceability which, in the event of dispute, balances the burden of proof, notably thanks to the electronic signature.
The role of the electronic signature in ensuring the security of electronic invoices
Within very small and small & mid-sized companies, electronic invoices raise concerns regarding the security of processes. How is the integrity of an electronic invoice guaranteed? For the receiving company, how is the identity of the issuer verified?
It is important to understand that compliance of an electronic invoice is based on three pre-requisites:
- legibility (it must be understandable to all),
- data integrity (no changes to the document are possible),
- and issuer identity (via secure authentication).
This three-fold necessity involves the use of the electronic signature to issue invoices in digital format. Yet, there is a signature format specifically designed for electronic invoicing: the legal person certificate or “server stamp”, which we can equate to an electronic stamp as it contains all of the standard information contained in an invoice.
This is what Oodrive Sign offers to very small and small and mid-sized companies thanks to a new feature: a server stamp compliant with the first level of the general security benchmark (référentiel général de sécurité – RGS*) and the eIDAS regulation, enabling the simultaneous signature of vast volumes of invoices online, guaranteeing the identity of the issuer, the integrity of the document as well as the hour/date of the creation of the invoice.
It should be noted that this functionality is only available in API mode and requires integration into additional third-party software available from Oodrive’s independent software vendors (ISV) partners.