What is an electronic invoice?
Electronic invoices, or e-invoices, are digital invoices transmitted directly between companies' financial systems in a structured, machine-readable format. In this article it refers to documents sent between businesses (B2B or B2G) and not between businesses and private individuals (B2C).
Electronic invoice formats and networks in Sweden
There are several formats for electronic invoicing in Sweden: The government in Sweden encourages the use of the format Peppol BIS Billing 3.0, but other formats like Svefaktura and EDIFACT are still in use.
As of April 2019 Peppol BIS Billing 3.0 has been mandatory for B2G transactions and while Svefaktura no longer is supported by SFTI (Single Face To Industry - a swedish organisation promoting digital standardization) it is still widely used in B2B transactions.
Peppol
The Peppol network was initiated in 2008 and formally established in 2012 for the exchange of electronic invoices and other business documents across national borders and is the preferred network in official transactions. Peppol utilizes a network of access points (APs), facilitated by EDI (Electronic Data Interchange) service providers, supporting both national and cross-border transactions.
NEA and interoperability
The majority of EDI providers operating in Sweden are affiliated with NEA (Nätverket för Elektroniska Affärer), a non-profit, member-governed organization dedicated to the promotion of electronic business in Sweden.
NEA hosts a register (NEA eRegister) for finding companies able to send and receive electronic documents such as invoices and orders through the affiliated EDI service providers. Note that the NEA eRegister does not provide the network for sending and receiving electronic invoices, as this is facilitated by the EDI providers.
To send an invoice utilizing NEA, the service provider of the sender and the receiver must have an interoperability agreement. This agreement specifies which document formats they should send between them, how the documents are transferred, and other technical details – providing the secure transfer of documents between the parties. If the receiving party is registered in the NEA eRegister, the service provider of the sending party can then forward the document to the service provider of the receiving party without further arrangements.
It is thus crucial to find an EDI provider not only with a large number of interoperability partners, but that is also an active participant in the NEA community and utilizes the NEA eRegister to register their own customers.
Status of electronic invoicing in Sweden
Electronic invoicing is mandatory for all public sector transactions in Sweden. According to DIGG (The Swedish Agency for Digital Government), more than 80% of invoices received by the public sector are electronic, whereas less than 30% of invoices sent from public sector to private companies are electronic. Further, according to Eurostat, approximately 60% of small- to medium companies in Sweden can send electronic invoices.
The Swedish government has actively promoted electronic invoicing for several years, through the work of DIGG and SFTI, among others, encouraging its incorporation in the Swedish business culture. The announced goal is making electronic invoicing mandatory on B2B transactions, although this change still lies in the future.
Sending and receiving electronic invoices in Sweden
To start sending and receiveing electronic invoices in Sweden, your company needs:
- An accounting system able to import and export invoices in a machine-readable format (such as Svefaktura, Peppol BIS, etc.)
- An EDI provider that offers a Peppol access point, is an active member of the NEA community, and has the necessary interoperability agreements with the EDI providers of your trading partners
- Registration as a recipient in the NEA eRegister and Peppol, normally made by your EDI provider
How to receive
To start receiving electronic invoices as a Swedish company, your company should be registered in both the NEA eRegister and in Peppol.
Suppliers able to send invoices through the Peppol network will usually automatically start sending you electronic invoices. For the rest of your suppliers, however, the onboarding is still a highly manual process even though your company is registered in the NEA eRegister.
To speed up onboarding, your EDI provider may offer onboarding services where they contact your suppliers to inform them that you are connected to a service provider and ready to receive electronic invoices. The supplier should then contact their own EDI provider to establish the connection. You may also manage this process yourself.
How to send
Compared to receiving, the process of sending electronic invoices can be more automated if you choose the right EDI provider.
The EDI provider should be able to inquire if the receiving company is registered in Peppol or NEA eRegister and start sending electronic invoices immediately if this is the case.
Note that not all EDI providers support automatic sending to parts registered in the NEA eRegister.
Do I need an EDI service provider?
There are several cloud-based ERP systems available with integrated Peppol access points as part of their service. However, these systems are usually insufficient for electronic invoicing in the Swedish market, which still relies heavily on the NEA eRegister and interoperability agreements between the service providers.
Therefore, to send and receive electronic invoices within Sweden, companies will need an EDI service provider that is engaged in NEA and offers both a Peppol access point and the necessary interoperability agreements.
These service providers will usually also offer additional services to simplify the handling of electronic invoices, such as document control, scanning, etc.
International Electronic Invoicing
International invoicing is often complex: Most countries have their own preferred formats and use different networks. It is therefore crucial to find the right EDI service provider when invoicing internationally, with the necessary interconnection agreements and access to relevant networks, as well as an overview of the applicable legal requirements.
To be able to receive electronic invoices from abroad, you need to be connected to an EDI service provider that can:
- Exchange documents with the service provider that the sender of the invoice uses - either via interconnection agreements or via interoperability networks
- Handle different invoice formats (such as EDIFACT, cXML, ANSI X12, OIOUBL, etc) and convert these into a format that is compatible with your financial system
To send electronic invoices abroad, you must be connected to an EDI service provider that can ensure that:
- The invoice can be converted to the recipient's preferred format (or a format agreed upon with the recipient’s service provider)
- The invoice is sent to the correct recipient, often by network collaboration, or via interconnection agreements
Success factors for electronic invoicing in Sweden
- Choose the right EDI service provider: An experienced EDI service provider with a large network can be essential
- Register in Peppol
- Register in NEA eRegister
- Utilize Onboarding Services: The service provider may be able to speed up the process of onboarding suppliers to send you electronic invoices.
- Collaborate with a System Integrator: Ensure seamless integration with your existing systems. (Logiq has a large and expanding network of partners that can help you)
- Build internal competence: Invest in training and understanding of electronic invoicing for your employees
- Prepare to scale: Choose solutions that can grow with your business
Summary
Due to the complexity of the Swedish B2B transactions, it is crucial to find the EDI provider suitable for your individual company. Be sure to find an EDI provider with the necessary interoperability agreements, as well as Onboarding Services. Further, the provider should offer additional services such as scanning and document control. Finally, and maybe most importantly, the provider should have a Nordic service desk that answers quickly when you try to reach them – whether this is by phone or mail.
As a leading EDI provider in the Nordic region, Logiq has the expertise and infrastructure required to ensure the successful implementation of electronic invoicing for Swedish companies.
Do you want to know more about how your company can get started with electronic invoicing? Contact us for a talk about what can be achieved.