Norway to public-sector suppliers: No e-invoice? No contract

By making e-invoices mandatory in the public sector, Norway expects to save money and speed up its tech shift.

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The Norwegian government has brought in regulations requiring that all parts of the public sector, both state and local government, demand e-invoices from their suppliers.

The goal is to increase the speed and extent of digitalization in Norway, as well as save money by streamlining invoice processes.

"The use of e-invoices saved the nation almost NOK4.5bn [€465m, $522m] in 2018. As we now mandate state and local government to require e-invoices, we expect the gains to be even higher," Nikolai Astrup, Norway's minister of digitalization, said in a statement.

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In 2018, more than 90 million e-invoices went through the Norwegian part of the EU's PEPPOL network for the exchange of electronic documents. That figure was up from 58 million the previous year.

PEPPOL, or Pan-European Public Procurement Online, is an infrastructure and technical specification that makes it possible for different systems and services to exchange data directly. So an invoice from a supplier will show up in the receivers' data system, even if they originated in different systems.

The PEPPOL network uses a four-corner model, see below, with the sender and receiver as two of the corners, and their respective access points as the other two.

In addition, there are common address repositories and lookup services in the network, much like traditional DNS services inside the internet.

With the new regulations, the Norwegian government expects the number of e-invoices to rise even further from last year's 90 million.

"The public sector [in Norway] buys products and services worth more than NOK500bn [€51.6bn, $58bn] per year," Astrup said.

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Astrup: "The use of e-invoices can help reduce the number of errors."

Image: Stig Øyvann/ZDNet

"Suppliers who want to compete for public contracts will have to comply with the new regulations. This will contribute to increased digitalization in the business sector and ensure that more of the procurement process becomes digital."

The minister of digitalization points out that both customers and suppliers save time and money by using electronic invoices. He cited an earlier study, which estimates that an organization saves 10 minutes on each e-invoice, compared with traditional paper invoices. In addition, the sender saves on postage and paper.

"The use of e-invoices can help reduce the number of errors, reduce the time spent, use less paper, and ensure they are paid at the correct date. It allows for shorter payment deadlines and is good for the environment, too," Astrup added.  

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The PEPPOL network uses a four-corner model, with the sender and receiver as two of the corners, and their respective access points as the other two.

Image: PEPPOL