The implications for Credit Control teams

Earlier this year, the Spanish Government issued a draft law signalling a proposed shift in policies concerning eInvoicing. The implications are widespread. All businesses, from freelancers to corporates, are affected. It is suggested that all B2B invoices should be sent electronically. Read on to find out more. 

The starting point 

Spain’s journey to eInvoicing began in 2015. Since then, the law requires that all invoices to public sector bodies be  

  • Sent in a structured format
  • Signed with an electronic signature

After a phasing-in period, Business to Government (B2G) eInvoicing became fully mandatory for all suppliers to Government in 2017, in line with the EU directive 2014/55/EU.  

At first, affected invoices were to be sent to the general electronic invoice entry point PGEFe (Punto General de Entrada de Facturas Electrónicas, which was already used by all public sector organisations – the platform known commonly as FACe. 

A new FACe 

In 2018, the delivery channel and structure invoice format changed. The FACe was extended to cover general B2B invoices, not just B2G invoices. The FACeB2B platform was then used for higher-value B2G transactions from primary contractors and their subcontractors. While it was mandatory for transactions over Euros 5,000, organisations were permitted to use it for other B2B transactions and send invoices B2G outside Spain. Invoices sent  

  • In a structured format called FacturaE 
  • Via the FACeB2B platform  
  • Signed with an electronic signature conforming to the e XAdES standard. 

Since then, like many others, Spain has decided to transition to a CTC  model (Continuous Transaction Clearing) model. Italy, France, Poland and Hungary moved first, now to be followed by Spain, with Portugal hot on its heels. Governments favour CTC models for their advantages in terms of tax compliance. 

2021 – Create and Grow – What is it? 

The Create and Grow (Crea y Crece) report was published alongside a draft law aiming to mandate all B2B invoices to be sent electronically and the consultation period for the draft law ended on 6th September 2021.  

Who issued it and why? 

The Ministry of Economic Affairs and Digital Transformation issued the ‘Create and Grow’ report. The draft law aims to increase tax compliance and create the right conditions for existing businesses to flourish and new businesses to grow, unimpeded by the threat of late payment that could affect their cash flow and ability to deliver their services and continue growing. 

Who is affected and when? 

Every business, from corporates to freelancers, are in scope. However, the deadlines are staggered, giving smaller businesses longer to comply. The clock starts ticking when the draft law is made formal, announced by an entry in the official state bulletin (BOE).   

  • Large Corporates – 1 year from the date of the BOE (taxpayers with a turnover of Euros 8 million or more) 
  • Everyone else – 3 years from the date of the BOE

How can your business comply? 

A business can take three key options to ensure initial and continued compliance with the EDI standards required for invoices to Spanish organisations.  These options are common to all e-Invoices sent using EDI – and that just about covers all invoices sent to Europe. While considering the pros and cons of each, it is worth considering this in the context of all eInvoices: the total number of customers, the frequency, value and strategic importance of the customer and therefore the risk to your business if those invoices are not sent efficiently, compliantly and reliably.  EDI is a headache for most Credit Control teams – a necessity, not a choice. However, how a Credit Control team decides to manage its invoices outbound via EDI can affect its own performance, reputation and KPIs. 

The three options are: 

  • In-house 
  • Outsourced to EDI specialist 
  • Outsourced to EDI and eInvoicing specialist 

To view, the timeline of the eInvoice changes in Spain and a review of the three options, including key players in the market for EDI managed services, download our report below. 

Download the timeline 

 

 

 

Download the report

David Harris

Author David Harris

David Harris is the Business Development Executive at Data Interconnect. Dave works with companies planning the implementation of Corrivo, the cloud-based credit control software which improves cashflow, minimises aged debt and streamlines processes for finance departments. If you would like to know more, contact Dave on: Davidh@datainterconnect.co.uk

More posts by David Harris

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