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How NEW E-invoicing Rules Will Affect Your Irish Business

Sending and receiving invoices electronically between companies and the government is becoming a  common practice worldwide. In fact, the global e-invoicing market is expected to reach €23 billion, growing 25% in total to 2027.

Ireland has already started requiring e-invoicing to be used for some business-to-government activities. More new electronic invoicing rules are going to be introduced that will impact Irish companies across different industries.

E-invoicing means the digital sending and receiving of invoice documents between a seller and a buyer. It replaces printed paper invoices and manual data entry, allowing much faster and more accurate processing of invoices. E-invoicing provides many benefits for governments, sellers, and buyers when it comes to invoicing. As the European Union modernises invoicing practices, Irish businesses need to prepare for the upcoming new e-invoicing rules.

This article provides an overview of the upcoming electronic invoicing regulations in Ireland and how they will impact Irish businesses across sectors.

Source: Unsplash

The Benefits of E-Invoicing for the Government and Businesses 

Using e-invoicing offers important benefits for the Irish government, sellers, and buyers:

Reducing Costs

E-invoicing automates the creation, sending, and handling of invoices digitally. This greatly reduces the amount of paperwork, administrative work, and expenses involved in physically printing, mailing, storing, and managing paper invoices. As predicted by the European Commission, the adoption of e-invoicing could lead to potential cost savings of €18 billion per year across the European Union. 

Achieve Faster Payment

With e-invoicing, invoices can be processed and paid much faster than traditional paper invoices. This improves cash flow for sellers, since they receive payment faster. E-invoicing also reduces risks of late payments and late fees for buyers.

Improving B2G eProcurement

For business-to-government transactions, e-invoicing allows suppliers of all sizes to easily connect to and integrate with government electronic procurement systems. This expands access for businesses to bid on and fulfill public sector contracts.

Facilitates Cross-Border Trade

The unified e-invoicing data standards make issuing and processing digital invoices seamless across European Union member countries. This removes barriers and simplifies cross-border business-to-business trade for Irish companies when dealing with international clients and suppliers.

Accurate Data

By removing manual data entry from the invoicing process, e-invoicing greatly reduces human errors that can lead to wrong or inaccurate invoice details. The structured digital data also enables better reporting and analytics.

Improved Traceability and Tax Compliance

With complete digital records and audit trails, e-invoicing improves tax reporting compliance for businesses and helps tax authorities combat fraud. It benefits governments and reduces tax compliance burdens on businesses.

Timeline and Effective Dates of the New Rules by Country 

Ireland isn’t the only country adopting electronic invoicing regulations – other European Union member states have already started requiring B2B and B2G e-invoicing as well:

CountryChanges to Come
PolandFrom July 1, 2024 companies must send all electronic invoices to the National eInvoicing System for a digital timestamp.
PortugalFrom January 1, 2023, all invoices issued must include a unique identification number for e-invoicing compliance.
SlovakiaFor business-to-business e-invoicing the timeline is longer. But from April 1, 2023, e-invoices became mandatory for business-to-government transactions.
SpainIn spring 2023, the e-invoicing law was finalised, and the timeline was approved. Businesses with over €8 million in annual turnover must adopt e-invoicing before the end of 2024.
Upcoming e-invoicing changes in the EU by country
Source: Unsplash

Overview of the New E-Invoicing Rules in Ireland

While the official timeline and details are still being finalised by Irish regulatory authorities, the country is moving quickly to expand e-invoicing adoption beyond the initial business-to-government requirements. All signs indicate mandatory business-to-business e-invoicing will be coming into effect within the next 2-3 years. Irish companies across all industries should start preparing now to ensure a smooth transition.

Mandatory E-Invoicing

The first phase of Ireland’s e-invoicing rules and regulations came into effect in April 2022, making e-invoices mandatory for all business-to-government transactions taking place between commercial enterprises and designated “obligated entities” in the public sector. 

Obligated entities are organisations that are legally required to adopt e-invoicing under government regulations for their procurement and payment processes. This ensures a steady rollout and adoption of e-invoicing across critical segments of the economy.

This initial rollout focused on central government bodies and agencies such as the Office of Public Works, the Department of Agriculture, Food and the Marine, and the Courts Service.

However, the scope of required e-invoicing will expand rapidly in the coming years. The Department of Enterprise, Trade and Employment has indicated that SMEs will need to comply with e-invoicing mandates as obligated entities starting from 2024 onwards. Larger Irish businesses and enterprises may face mandated e-invoicing even sooner than that.

Integration with Accounting Systems

To maximise the benefits of the transition, Irish companies will need to tightly integrate their e-invoicing systems and processes with their accounting software and ERP platforms. This facilitates seamless automated digital flows from invoice issuance all the way through to payment, reconciliation, and financial reporting.

Modern accounting systems like Sage, QuickBooks, and Xero provide APIs to enable easy interoperability with e-invoicing solutions. The key is choosing an e-invoicing provider certified for integration with your company’s accounting system. Trying to manually extract and upload invoice data would negate many of the potential time and cost savings e-invoicing can offer.

Source: Unsplash

Adaptation and System Upgrades

For some Irish companies, the move to e-invoicing will require investments in new hardware, software upgrades, or implementing entirely new digital invoicing solutions – especially businesses still reliant on legacy paper-based systems and workflows. Small and medium sized enterprises may need to implement e-invoicing capabilities and capacity from scratch.

Larger enterprises can work closely with their ERP or accounting software providers to activate built-in e-invoicing features and functionality. In some cases, deploying new IT infrastructure and enterprise integration middleware may be necessary to connect e-invoicing with existing business systems. Company managers should not underestimate the time, training, and change management required to transition finance staff and other employees to using the new digital e-invoicing systems.

E-invoicing Standards in Ireland – PEPPOL

To enable harmonised and interoperable e-invoicing across the European Union, Ireland has adopted the PEPPOL (Pan-European Public Procurement Online) frameworks for e-invoicing standards:

European Norm (EN) for e-invoicing

Ireland’s e-invoicing rules and regulations align with the European Norm EN 16931, which defines the technical specifications and requirements for the syntax and semantics of structured electronic invoice documents. Compliance with EN 16931 ensures that e-invoices adopt a consistent and common data format, contain required fiscal attributes, and meet legal compliance needs per European Union regulations. This norm enables interoperability and compliance for e-invoicing systems across EU member states.

PEPPOL Access Points

Regulated PEPPOL Access Points (APs) serve as digital hubs and intermediaries that facilitate the exchange of e-invoices between senders and receivers over the PEPPOL network. They provide the necessary technical infrastructure to connect e-invoicing solutions used by buyers and sellers with their trading partners, and transfer structured invoice data between systems. Examples of approved PEPPOL AP service providers in Ireland include Pay & Go, EOS IT Solutions, and WizPass.

PEPPOL Business Interoperability Specifications (BIS)

The PEPPOL technical standards and specifications allow diverse e-invoicing solutions and corporate systems to exchange invoices, documents, and other structured data with each other through a standardised interfacing protocol. PEPPOL’s Business Interoperability Specifications (BIS) enable this interoperability for e-procurement, e-ordering, and e-invoicing across supply chains. These standards are a key enabler for automated, end-to-end digital processes from order to payment.

Conclusion on New E-invoicing Rules

As the digitalisation of business transactions accelerates globally, e-invoicing is the inevitable next step in the evolution for Irish companies. By understanding the regulatory timelines, standards, and proactively preparing their systems and processes, Irish enterprises can ensure a smooth transition to e-invoicing that maximises the many benefits, cost savings, and efficiencies it promises.

Consult the accounting experts at Chern & Co for the latest updates and guidance on complying with Ireland’s new e-invoicing rules and regulations.

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