- Mandatory Electronic Invoicing in France: Get Ready Now!
Mandatory Electronic Invoicing in France: Get Ready Now!
From July 1, 2024, electronic invoicing will gradually become mandatory for B2B transactions, both incoming and outgoing, according to a timetable and technical procedures defined by the French government. The deadlines are approaching. For large companies especially (more than 5,000 employees, annual turnover of more than €1.5 billion or total assets of more than €2 billion), it is essential to prepare for this reform now.
Different deadlines for different company sizes
From July 1, 2024, all companies subject to VAT in France must be able to receive B2B electronic invoices in the manner defined by the legislator, at the request of the issuer of the invoice.
For the obligation to send B2B invoices in electronic format, the deadlines depend on the size of your company:
- July 1, 2024 for large companies
- January 1, 2025 for medium-sized companies (MSEs)
- January 1, 2026 for SMEs, VSEs and micro-enterprises.
Electronic invoicing will not be mandatory for B2C and cross-border invoices. However, the government will require businesses to e-report these transactions. This obligation to transfer data to the tax authorities will follow the same timetable as mandatory e-invoicing.
Large companies: the urgent need to prepare now
As noted above, large companies will be obliged to receive and issue invoices in electronic format from July 1, 2024. There are several possible scenarios:
- You already use a solution (ERP, accounts payable, e-invoicing, etc.) that allows you to send or receive electronic invoices. In this case, you need to check that your current solution is able to send, receive and process the formats authorized by the reform (UBL 2.1, UN/CEFACT CII and Factur-X), that it complies with the required archiving standards and that your service provider has taken the necessary steps to become a Partner Dematerialization Platform (PDP) approved by the French government.
- You are not equipped with an e-invoicing (issuing invoices) or AP (receiving invoices) solution. In this case, it is recommended that you quickly start looking for e-invoicing and AP Automation providers that a becoming a PDP.
Electronic invoicing: prepare now to meet deadlines
The implementation of this type of solution cannot be improvised. It is a project that takes several months and involves many departments: accounting/finance, IT, sales, legal, etc. To meet the deadlines, it is essential to start setting up an internal team now to formalize your needs and address questions such as:
- What are your current processes for managing outgoing and incoming invoices? And how can you optimize them?
- How many invoices are sent / received per year? And in which format (PDF, e-invoices, EDI, paper, etc.)?
- How many customers/suppliers do you have? What is their size, geographical location and level of maturity in terms of electronic invoicing?
- Which electronic invoice formats are accepted/used by your customers or suppliers?
- Which of your customers will be eligible for mandatory electronic invoicing (domestic B2B in France) or e-reporting (cross-border and B2C transactions)?
- What changes need to be implemented in your information system?
What are the points of caution when choosing the right solution?
Ideally, it is preferable to select a partner dematerialization platform that will be able to manage both the reception and the sending of electronic invoices to reduce the risks inherent in the multiplication of suppliers. In all cases, it is important to check the solution's ability to:
- Receive or issue electronic invoices in one of the three formats required by the legislator: Factur-X, UBL or CII. Until 2026, the solution must be able to handle incoming paper invoices, scanned invoices and PDF invoices that do not contain structured data.
- Interface easily with your ERP system(s).
- Help you to comply with changes in regulations worldwide, particularly in terms of invoice format, sending/receiving invoices, confidentiality of data exchanged and archiving.
- Check the existence of your business partners (to avoid fraud).
- Automate invoice reconciliation, including those not associated with a purchase order.
- Maximise the number of e-invoices sent internationally, thanks to its interoperability with other e-invoice systems.
Finally, a crucial point, remember to check that the providers you consult have taken the steps to become a dematerialization platform partner approved by the French Administration. This is the case for Basware, which is an active member of the working groups preparing the reform with the DGFIP (Direction Générale des Finances Publiques) and the FNFE (Forum National de la Facturation Electronique).