Directive #3:

Mandatory E-invoicing

What is Mandatory E-invoicing?

E-payment is an upcoming trend to be implemented in B2B landscape. However, a study reveals that 55% of the respondents in EU/UK do not expect a significant change in their B2B customer payment behaviour over the upcoming 12 months. In this backdrop, Italy has made e-invoicing mandatory for all B2B, as well as B2G(Business to Government) transactions. The purpose of this is to introduce e-adoption of payments in Europe. The key aspects of this mandatory e-invoicing include the following:

• All B2B invoices should be transferred electronically through SDI from January 1, 2019.
• All oil and gas sectors should comply this regulation from July 1, 2018.
• All invoices should be generated in XML format with standard FatturaPA.
• Invoices in other formats should be considered invalid, and would result in subsequent penalty.

This regulation is a result of Italian Budget Law† 2018, the decision from EU council is awaited. What it means for your OTC team? Shorter Payment Cycles Adoption of e-invoicing will lead to faster cash conversion cycle, eliminating invoicing issues. Standardized Invoicing If invoicing across EU becomes standardized, it will be easier for the treasury/AP team to accept the payments and reflect them in the books. Elimination of Spesometro The Spesometro report was sent to Agency of Revenue, meant to control tax-evasion, which is no longer required after this mandate is effective. Seamless transition to Automation It is better to experience an exponential growth in automating rather than a disruptive one. E-invoicing facilitates the same. Next Steps: How to drive compliance

1. Ensure ERP compatibility with SDI.
2. Discard all existing invoicing methods except e-invoicing.
3. Enable a customer self-service payment portal.