PricewaterhouseCoopersSurvey on the take-up of e-invoicing by businesses and related difficulties

Key Findings 2008

Contents

Profiling the participants

Key Findings

- Invoice Handling- Attitudes to Electronic Invoicing- Implementation of Electronic Invoicing

Profiling the participants

Page 4Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Worldwide turnoverProfiling the Participants

1

17

13

34

16

19

0 10 20 30 40 50 60 70 80

Don't know

More than €1 billion

€500 to €999 million

€100 to €499 million

€50 to €99 million

Under €50 million

%

Page 5Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Annual Balance Sheet

Profiling the Participants

25

15

20

15

26

0 10 20 30 40 50 60 70 80

Don't know

€500m+

€100 to €499 million

€43 to €99 million

Under €43 million

%

Page 6Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Number of employees worldwide

Profiling the Participants

2

35

16

19

29

0 10 20 30 40 50 60 70 80

Don't know

1,000+

500 to 999

250 to 499

Less than 250

%

Page 7Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Profiling the Participants

Organisation Size

78

22

0 10 20 30 40 50 60 70 80

Large Enterprise

SME

%

Page 8Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

17

4

5

5

5

6

7

7

7

9

12

16

0 10 20

Other

Energy

Real Estate

Trasportation

Pharmaceuticals

Construction&Engineering

Media&Communication

Automotive

IT/Technology

Business services

Consumer products

Financial services

%

Profiling the Participants

Main line of business

‘Others’ include:Recruitment

Manufacturing

Retail / Wholesale

Industrial

Page 9Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Profiling the Participants

Operating markets

3

59

77

0 10 20 30 40 50 60 70 80

Other

B2C

B2B

%

2008

Page 10Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

7

22

24

28

50

92

0 10 20 30 40 50 60 70 80 90 100

Other

North America

Asia

European marketsoutside of the EU

EU member states

Domestic markets

%

Profiling the Participants

Operating markets

13

22

20

28

55

88

0 10 20 30 40 50 60 70 80 90 100

Other

North America

Asia

European marketsoutside of the EU

EU member states

Domestic markets

%

‘Other’Included:

Africa

Australia

Latin America

South America

Middle East

2005 2008

Page 11Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Profiling the Participants

Number of member states in which it is necessary to comply with VAT legislation

4

15

4

3

13

60

0 10 20 30 40 50 60 70 80

Don't know

20+

16-20

11-15

6-10

0-5

%

Page 12Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

8

45

16

14

13

2

3

0 10 20 30 40 50

Don't know

500+

100 to 499

50 to 99

10 to 49

5 to 9

Less than 5

%

6

23

17

11

13

10

8

8

5

0 10 20 30 40 50

Don't know

100,000+

10,001 to 100,000

5,001 to 10,000

1,001 to 5,000

501 to 1,000

101 to 500

11 to 100

Less than 10

%

Customers

Profiling the Participants

Number of customers and suppliers - Domestic

Suppliers

Page 13Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

26

7

6

3

7

8

8

17

17

0 10 20 30 40 50

Don't know

100,000+

10,001 to 100,000

5,001 to 10,000

1,001 to 5,000

501 to 1,000

101 to 500

11 to 100

Less than 10

%

20

12

15

12

18

10

14

0 10 20 30 40 50

Don't know

500+

100 to 499

50 to 99

10 to 49

5 to 9

Less than 5

%

Customers

Profiling the Participants

Number of customers and suppliers – Within EU

Suppliers

Page 14Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

38

5

5

4

5

1

8

11

24

0 10 20 30 40 50

Don't know

100,000+

10,001 to 100,000

5,001 to 10,000

1,001 to 5,000

501 to 1,000

101 to 500

11 to 100

Less than 10

%

27

10

11

4

12

8

27

0 10 20 30 40 50

Don't know

500+

100 to 499

50 to 99

10 to 49

5 to 9

Less than 5

%

Customers

Profiling the Participants

Number of customers and suppliers – Outside EU

Suppliers

Key FindingsInvoice Handling

Page 16Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Customer InvoicesInvoice Handling

11

28

15

11

15

7

6

7

0 10 20 30 40 50 60 70 80

Don't know/NA

500,000+

100,000 to499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

Less than 1000

%

2005 2008

5

12

11

12

12

13

13

22

0 10 20 30 40 50 60 70 80

Don't know/NA

500,000+

100,000 to499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

Less than 1000

%

Approximately how many customer invoices has your organisation issued in the last 12 months?

Page 17Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

7

4

9

8

31

11

18

5

7

0 10 20 30 40 50 60 70 80

Don't know

500,000+

100,000 to499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

500 to 999

Less than 500

%

Supplier InvoicesApproximately how many supplier invoices has your organisation exchanged in the last 12 months?

5

16

10

10

30

9

16

2

3

0 10 20 30 40 50 60 70 80

Don't know

500,000+

100,000 to 499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

500 to 999

Less than 500

%

2005 2008

Page 18Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

25

2

5

5

4

11

12

38

0 10 20 30 40 50 60 70 80

Don't know

100,000 to 499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

500 to 999

Less than 500

%

Inter-company InvoicesApproximately how many inter-company invoices has your organisation issued/received in the last 12 months?

11

3

7

2

11

7

16

6

38

0 10 20 30 40 50 60 70 80

Don't know

500,000+

100,000 to 499,999

50,000 to 99,000

10,000 to 49,999

5,000 to 9,999

1,000 to 4,999

500 to 999

Less than 500

%

2005 2008

Page 19Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

4

73

7

7

16

0 10 20 30 40 50 60 70 80 90 100

Don't know

None

Receipt ofpurchaseinvoices

Issuing ofsales

invoicing

Archiving

%

Which of the following invoicing functions is outsourced by your organisation?

Page 20Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

4

22

11

4

37

41

0 10 20 30 40 50

Don't know

Other

IT consultancy

Accountancy firm

Shared ServiceCentre (EU)

Other ProfessionalServices firms

%

Which type of provider do you use for the outsourcing of invoicing functions?

Page 21Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

21

26

89

0 10 20 30 40 50 60 70 80 90 100

An alternativebillingsolution

An internallydeveloped billing

platform

A standard ERPsystem

%

SystemsWhich of the following systems does your company make use of?

Page 22Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Invoice Handling

42

4

13

42

0 10 20 30 40 50 60 70 80

Other

JD Edwards

Oracle

SAP

%

Systems

Which Enterprise Resource Planning system is used by your organisation to bill your customers?

‘Others’ Include:

IFS

Resolution

Qvaliac

MS Business Sol.

Attitudes to Electronic Invoicing

Page 24Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Attitudes to Electronic Invoicing

-15

-12

-10

-8

-9

-5

-5

-4

32

34

34

30

15

21

29

38

-40 -20 0 20 40 60 80

Electronic Signatures(both advanced and

qualified)

Electronic DataInterchange (EDI)

Electronic Archiving

Other Means (scanning,PDF, secured website)

%

How well informed do you feel about the following technologies?

Fairly poorly informedVery poorly informed Very well informedFairly well informed

Don’t Know

2%

3%

3%

5%

Neither/Nor

25%

24%

18%

.

19%

Page 25Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

1

23

3

29

20

27

27

0 10 20 30 40 50

None

We have not yet fully consideredEI

We have decided not toimplement EI

We plan to start implementationin the next 12 months

We are in the process ofimplementing EI

We already operate EI with oursuppliers

We already operate EI with ourcustomers

%

Attitudes to Electronic Invoicing

Which of the following statements best describes your organisation’s position in relation to Electronic Invoicing?

2005

5

3

17

4

14

8

29

21

41

0 10 20 30 40 50

Don't know

Other

We have not yet fully consideredEI

We have decided not toimplement EI

We plan to start implementationin the next 12 months

We are in the process ofimplementing EI

We already operate EI with oursuppliers

We already operate EI with inter-company invoices

We already operate EI with ourcustomers

%

2008

Page 26Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

5

12

26

29

29

42

74

79

0 10 20 30 40 50 60 70 80

Don't know

Other

In tune with supplierpreferences

In tune with customerpreferences

Less customer / supplierdisputes

Faster customer payments

Cost reduction

Increased efficiency

%

Attitudes to Electronic Invoicing

What do you regard as the benefits / potential benefits of Electronic Invoicing?

19

21

38

61

71

0 10 20 30 40 50 60 70 80

In tune with customerpreferences

Less customer/supplierdisputes

Faster customer payments

Cost reduction

Increased efficiency

%

2005 2008

Page 27Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

15

14

12

18

21

23

25

25

38

40

0 10 20 30 40 50

Don ' t know

Other

Concerns over return on investment

Reliability of the system

Regulation /legislation /dealing with tax authorities

Complexity

Expensive /high investment required

Readiness /compatibility of internal systems

Supplier compatability /readiness

Customer compatability /readiness

%

Attitudes to Electronic Invoicing

What do you regard as the problems / potential problems of Electronic Invoicing?

10

8

10

23

30

21

35

0 10 20 30 40

Don 't know

Other

Concerns over return on investment

Reliability of the system

Regulation /legislation /dealing with tax authorities

Complexity

Readiness /compatability of internal systems

Supplier compatability /readiness

Customer compatability /readiness

%

2005 2008

Page 28Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

3

1

7

12

15

47

64

82

0 10 20 30 40 50 60 70 80 90 100

Don't know

Other

Tape

DVD

CD Worm

Scanned version ofpaper invoice only

Files stored on aserver

Paper

%

Attitudes to Electronic Invoicing

Which of the following storage formats are used within your organisation for the archiving of invoices?

1

28

15

29

72

80

0 10 20 30 40 50 60 70 80 90 100

Don't know

T ape

DVD

CD Worm

Files stored on aserver

Paper

%

2005 2008

Page 29Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

1

6

93

0 10 20 30 40 50 60 70 80 90 100

Don't know

Abroad

Locally

%

Attitudes to Electronic Invoicing

Are your invoices archived locally or abroad?

2

5

96

0 10 20 30 40 50 60 70 80 90 100

Don't know

Abroad

Locally

%

2005 2008

Page 30Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

2

53

17

24

1

2

0 10 20 30 40 50 60 70 80 90 100

Don't know

10+

7 to 9

5 to 6

2 to 4

<2

%

Attitudes to Electronic Invoicing

For approximately how many years are your invoices archived?

Implementation of Electronic Invoicing

Page 32Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

8

5

27

34

36

45

69

80

0 10 20 30 40 50 60 70 80 90 100

Don't know

Other

Legal department

Procurement department

Tax department

Sales department

IT department

Finance department

%

Implementation of Electronic Invoicing

Which of the following functional areas was / will be involved in the implementation of Electronic

Invoicing in your organisation?

4

3

37

43

43

33

79

85

0 10 20 30 40 50 60 70 80 90 100

Don't know

Other

Legal department

Procurement department

Tax department

Sales department

IT department

Finance department

%

2005 2008

Page 33Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

12

2

10

18

32

21

0 5 10 15 20 25 30 35 40

Don't know

A very significant cost

A significant cost

Neither/Nor

A little cost

No cost at all

%

Implementation of Electronic Invoicing

Indication of the cost related to ensure compliant e-invoicing system

Page 34Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

57

13

6

9

21

21

13

15

9

42

13

15

19

19

19

17

17

15

9

23

68

57

21

32

48

52

64

0 10 20 30 40 50 60 70 80

Don't know

Other means: supplier e-Invoicing portal

Other means: e-mail (PDF)

Other means: scanning

Qualified electronic signatures

Advanced electronic signatures

Electronic Bill Presentment and Payment(EBPP)

Electronic Invoice Presentment and Payment(EIPP)

Electronic Data Interchange (EDI)

%

Already implementedPlanned to implement in the next 12 monthsPlanned to implement in the next 3 years

Implementation of Electronic Invoicing –

Which, if any, of the following e-Invoicing technologies has your organisation ...?

Page 35Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Attitudes to Electronic Invoicing

-17

-17

-24

-42

-39

-14

5

9

23

6

10

31

-80 -60 -40 -20 0 20 40 60 80

Electronic invoicing to non-EU countries

Electronic invoicing toanother Member State

Domestic electronicinvoicing

%

To a little extentTo no extent at all To a great extentTo some extentDon’t

Know/Refused

7%

26%

29%

In your opinion, to what extent do you feel that your organisation is currently involved in Electronic Invoicing in the following areas?

Page 36Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Attitudes to Electronic Invoicing

-15

-18

-13

-32

-23

-6

10

18

34

8

11

36

-80 -60 -40 -20 0 20 40 60 80

Electronic invoicing to non-EU countries

Electronic invoicing toanother Member State

Domestic electronicinvoicing

%

To a little extentTo no extent at all To a great extentTo some extent

Don’t Know

11%

31%

35%

In your opinion, to what extent do you feel that your organisation will be involved in the next 12 months in the following areas?

Page 37Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

5

1

6

14

29

45

0 10 20 30 40 50 60 70 80

Don't know

Other

Oursourced

Supplier-led

Customer-led

Company-led

%

Implementation of Electronic Invoicing

Which of the following best describes the development of your e-Invoicing technology? –

2005 2008

9

2

11

15

64

0 10 20 30 40 50 60 70 80

Don't know

Other

Oursourced

Supplier-led

Customer-led

Company-led

%

Page 38Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Implementation of Electronic Invoicing

20

27

51

38

44

44

38

0 10 20 30 40 50 60

Don't know

Intercompany eInvoicingagreements

Automated approvals

Exchange of order ordelivery codes via EDI

Automated matching

Supplier eInvoicingagreements

Customer eInvoicingagreements

Parallel exchange of paperinvoices

%

Which of the following processes and controls does your organisation operate in relation to

Electronic Invoicing?

17

24

30

30

35

40

44

51

0 10 20 30 40 50 60

Don't know

Inter-company e-Invoicingagreements

Automated approvals

Exchange of order ordelivery notes via EDI

Automated matching

Supplier e-Invoicingagreements

Customer e-Invoicingagreements

Parallel exchange of paperinvoices

%

2005 2008

Page 39Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

Attitudes to Electronic Invoicing

-13

-9

-4

-10

-4

-10

-6

-1

-3

-3

-1

22

41

33

31

42

39

34

19

16

17

19

12

16

28

-40 -20 0 20 40 60 80

Supplier readiness

Tax compliance

Control of implementationcosts

Customer readiness

Performance of outsideconsultants

Legal compliance

Speed of implementation

%

How satisfied are you with the following aspects of implementation?

Fairly dissatisfiedVery dissatisfied Very satisfiedFairly satisfied Don’t Know

11%

19%

17%

19%

16%

16%

16%

N/N

26%

18%

19%

25%

20%

20%

23%

Page 40Order no. TAXUD/2007/AO-009 – A study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC) prepared by PricewaterhouseCoopers – Final first report – Annex 4 – 14 May 2008

This report provides general guidance only and has been produced with the support of PricewaterhouseCoopers’ e-invoicing and e-archiving network. It does not constitute professional advice. You should not act upon the information contained in this report without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this review, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequence of you or anyone else acting, or refraining to act, in reliance on the information contained in this review or for any decision based on it.