Electronic invoicing reform: what you need to know

Initialement prévue au 1er juillet 2024, le calendrier de mise en œuvre de la réforme de la e-facturation a été décalé pour permettre aux entreprises françaises et à l’Etat un passage mieux orchestré.

While the postponement was agreed by the Minister of Finance in the summer of 2023, the timetable was rejected by the Senate, which wants to see a faster implementation for large companies from July 2025, justifying a significant economic gain by bringing this milestone forward.

How can you anticipate the challenges of the reform and take advantage of this time lag? In this article, you’ll find the major impacts you need to take into account to prepare your company’s ecosystem and get through the electronic invoicing reform with peace of mind.

Dans la continuité de la loi de modernisation de l’économie du 04 août 2008, la réforme de la facture électronique a introduit l’obligation d’échanger les flux de facturation par voie électronique. The Direction Générale des Finances Publiques (DGFIP) and the Agence pour l’Informatique Financière de l’Etat (AIFE) are responsible for implementing the new billing system.

The vast majority of French companies are sole traders (3.8 million in 2021) or very small businesses (1.3 million in 2021), and the French government estimates that between 2 and 2.5 billion invoices are circulated via B2B each year in France.
Naturally, the new e-billing reform is raising questions among companies about its impact and implementation timescales, as well as the work needed to meet the challenges it presents.

What are the key dates for the implementation of the electronic invoice reform?

Following an initial postponement of the reform, on November 15, 2023 the Senat voted an amendment proposing the possibility of receiving electronic invoices as early as July 2025, which needs to be validated by the National Assembly.

• July 1, 2025: If the amendment is confirmed, large French companies (workforce > 5,000 employees or sales > 1.5 billion euros) will have to be able to issue their invoices in electronic format, which means that all French companies will have to be able to receive them.

• September 1, 2026: Medium-sized companies (number of employees between 250 and 5,000 or sales between 50 million euros and 1.5 billion euros) will be obliged to issue their sales invoices in electronic format.

• September 1, 2027: small and medium-sized businesses and micro-businesses will also have to issue their sales invoices in line with the reform.

What are the terms of electronic invoicing?

In the common imagination, the electronic invoice is still too often considered as a simple paper document scanned in PDF or other format, then sent by email. Or, le cadre imposé par la réforme vient apporter une nouvelle norme et bouleverser les pratiques de facturation de toutes les entreprises, à court et moyen terme.

Much more than the edition of a document in an image format, the electronic invoice is defined as a paperless invoice, of which all the stages, from its creation to its integration, are done in a dematerialized way. It concerns all transactions for the purchase/sale of goods and services between companies established in France and subject to VAT. Under the new legislation, paper invoices will no longer be issued in the same way as PDF invoices.

For an invoice to be considered compliant, the following three electronic formats, governed by European standard EN16931 (defining the expected semantic data model), will now be permitted:

• Universal Business Language version 2.1 – UBL 2. 1: structured XML format, meeting the international standard ISO/IEC 19845:2015. It is now the most widespread worldwide.

• Electronic Data Interchange – CII: A structured XML format, using a technical specification to generate message syntax that can be exchanged internationally between inter-industry trading partners.

• Factur-X : format de fichier de facture mixte, associant à la fois un fichier XML structuré de données avec un document PDF.

On the other hand, the French government is introducing e-Reporting, which enables the tax authorities to be sent a statement of all purchase/sale transactions that do not fall within the scope of e-invoicing.

In addition to the obligations related to the format, new information has been made mandatory. This is the case, for example, with statuses linked to the invoice life cycle (payment, receipt, validation, etc.) and data such as the customer’s Siren number.

E-billing: What is the directory?

The directory is a register of identification data of companies established in France. It is set up within the framework of the reform and will be managed by the AIFE. It is designed to facilitate electronic invoicing exchanges between companies, and will enable VAT taxable persons to be identified.

Several categories of information will be listed in this register:

• Data identifying the companies receiving the invoices, as well as details of the organizational structure receiving the invoice within each company: SIREN, SIRET, routing code.

• Data relating to the identification of the Platforms of Dematerialization Partners between them so as to ensure the interoperability and the good reception of the electronic invoices.

• Additional data related to B2G invoices.

What tools can I use to dematerialize my invoices?

Because of the mandatory nature of the reform, the State has modeled future electronic invoicing flows between buyers and suppliers under a “Y-scheme”. It also identifies the different tool options that can be deployed within companies.

The Public Billing Portal

The Public Billing Portal (PPF) is a free service provided by the State, allowing companies to centralize their billing data. It is also in charge of the management of the public directory and makes the link with the tax authorities for VAT declarations.

Dematerialization Platforms Partners

Partner Dematerialization Platforms (PDPs) are private trusted third parties able to manage incoming and outgoing invoicing flows directly between customers and suppliers.

In order to be a PDP, publishers are required to obtain state certification. They generate invoices in the correct formats, both outbound and inbound.

Dematerialization Operators

Les Opérateurs de Dématérialisation (OD) sont également des tiers de confiance privés ayant la capacité de recevoir et de générer des factures aux formats électroniques attendus.

However, they do not have the capacity to issue a bill directly to customers, as no state approval is required.

Conclusion on e-invoicing reform

Ultimately, the preparation according to its ecosystem will be decisive to pass the course of the reform of the e-invoicing. In addition to providing the tax authorities with a new tool to reduce VAT fraud, this is a real opportunity for companies of all sizes to harmonize and modernize their invoicing practices.

This will improve both buyer-supplier relations and productivity, by optimizing working capital requirements, drastically reducing costs and processing times throughout the invoice life cycle, and improving competitiveness by simplifying invoicing processes, making them more reliable, and lightening the administrative burden of tax declarations.

SQORUS, a Council specialized in the digital transformation of HR, Finance and IT functions, can help you with your e-invoicing issues. Do not hesitate to contact us to discuss this with our experts.

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