At the end of 2013, the Spanish Parliament approved the Law for the Promotion of Electronic Invoicing and the Creation of an Accounting Register of Invoices in the Public Sector (Law 25/2013 of December 27, 2013). Its purpose is to reduce the number of late payments by Public Administrations, which will affect company financing, prevent the negative effects on employment and guarantee its survival.
The new law will come into effect on January 15th, 2015 for those who electronically file their tax returns, as the approval of the new law involves a revision of the work methods and the systems used in this area. Public Administrations as well as private companies are granted one year, 2014, to include the new digital methodology into their processes.
The aim of Law 25/2013 is to protect providers and increase transparency and efficiency levels in processes managed by Public Administrations. As such, the new legal regulations will protect providers from late payments, as all invoices are electronically registered, and intensify the fight against fraud, as all invoices pending for payment are recorded and identified.
The passage of this law promotes the usage of electronic invoicing in the public and private sectors, as e-Invoicing is a tool that is gaining more prominence in the European Union through numerous regulations. Specifically, in Spain, providers will be better protected in their commercial relations with Public Administrations through the creation of an Accounting Register of Invoices. This register is already mandatory and must be used by Public Administrations and providers to submit invoices, which ensures that all invoice dates are duly registered and will be taken into account for accrual of interests on amounts due.
Some of the key aspects of electronic invoicing procedures under Law 25/2013 for the “Promotion of Electronic Invoicing and the Creation of an Accounting Register of Invoices in the Public Sector” are:
- As the law involves a general standard, it is mandatory for all Public Administrations on a national, regional and local level.
- The electronic invoice must be presented in a regulatory format and be signed with an advanced electronic signature or an advanced electronic seal.
- Accounting records of electronic invoices must be made by the Public Administration body or unit responsible for accounting, after receiving the invoices from the Accounting Register of Invoices. This new procedure for invoice processing entered into effect on January 1, 2014.
- By regulation and as from January 15, 2015, invoices for amounts under 5,000 euros may be excluded from accounting records.
- The invoice processing status can be checked at any time by the provider who presented the invoice.
As a result of the new Law 25/2013, Spain is moving towards a general electronic law reinforcement and control, which means that an overall usage of the electronic signature and electronic documentation is on the increase.
As mentioned in one of our latest blog posts entitled “Electronic Invoicing in 2013″, European Directive 2010/45/EU establishes that paper and electronic invoices are equal legally and fiscally. In fact, the European Commission intends to ensure widespread usage of electronic invoices in Europe by the year 2020.
On the other hand, as indicated in our opinion article titled “Electronic invoices and how they should be used”, it seems that communication methods between the general public and Public Administrations are changing, although not at the rate expected by governmental institutions after the initial investments made. At this point, the role of document management software providers is to demystify the popular belief that document software technology is only within the reach of large organizations.
From a technological point of view, having an adequate document management solution allows companies to comply with the law without extra efforts or additional costs. After all, this type of software:
- Allows companies to create electronic invoices that meet the requirements of the Spanish Tax Agency (AEAT).
- Enables electronic invoices to be issued in digital format, as well as the creation and digital signature of documents.
- Operates with electronic invoices and verifies their contents.
- Verifies the sender´s signature and identity as well as the validity of the certificate used to sign the electronic invoice.
- Creates audit trails showing all operations performed on the invoice.
From a business perspective, a document management software saves costs and time as well as increasing the safety and quality of the service provided.
- Cost savings are generated as the use of paper, toner, shipping costs and storage space are eliminated or reduced.
- Management times are reduced because of the faster and more efficient administrative processes, which results in faster localization of updated information.
- Security is increased, as electronic signatures reduce the probability of counterfeiting and minimize the scope for human error.
- The quality of Customer Service is enhanced because a new channel of communication with the client is opened, because invoice processing and delivery times are improved, and because online payment of documents is allowed.
Every day, an increasing number of companies are considering to optimize their processes in order to gain efficiency and save costs. After all, when using electronic invoicing, in combination with an adequate document management solution, their productivity increases and the quality of their customer service is enhanced, which directly and positively affects the company’s business competitiveness.
André Klein
Freelance Consultant for DocPath