Analysis of the current legislation
On December 27, 2013, Congress passed the law on e-invoicing and creation of the accounting register for invoices in the Public Sector (Law 25/2013). This ruling governs the issuing of invoices in the national Facturae format, which is mandatory in trade relations between the Administration and its suppliers as of January 15, 2015.
The new changes require the government to keep an accounting registry for invoices, in which all the stages an invoice goes through are recorded. To this end, they must first provide suppliers with a point that enables receipt of invoices under the regulatory electronic standard. These repositories are designated by the legislation as General Points of Entry for e-Invoicing or PGEFe.
The system’s main purpose is to achieve a more immediate understanding of the economic reality in the administrations, facilitate invoice monitoring for suppliers and cut down on late payments.
Who is required to issue e-invoices?
The new rules and obligations affect all suppliers to the Public Administration, who have delivered goods or services of any kind to a government agency.
What format must the invoices be sent in?
Electronic invoices sent to the Public Administrations should use the Facturae (XML) structured format, version 3.2, and must be signed with an advanced electronic signature based on an authorized certificate.
On 21 March, 2014, the State Secretariat for Telecommunications and Information Society, jointly with the Secretariats of Finance and Budget and Expenditure, issued a resolution including some slight modifications to the electronic schema of Facturae 3.2, which administrations and their suppliers must take into account in the near future.
Where should I send my invoices?
Suppliers to the administration must send their e-invoices to the PGEFe -General Entry Point for e-Invoicing-that each public administration has enabled and technically prepared to facilitate the receipt of files (Articles 6 and 11 of Law 25/2013). The regulation allows administrations the option of developing their own repository or General Entry Point, or to use the General Entry Point for e-Invoicing of the General State Administration, known as FACe.
Once the electronic invoices are received in the PGEFe, they are automatically forwarded to the accounting records of the relevant department to proceed with processing and payment.
How is this process carried out?
Solutions are currently available to automate the process and lighten the administrative burden. EDICOM electric billing software extracts the data from the ERP or accounting system, generates the invoice in line with the format stipulated by law and applies electronic signature mechanisms to the document. Next, the solution detects the code of the Administration the digital invoice is addressed to and makes the connection through the EDICOM Public Administration HUB. This way, invoices are created and sent out automatically, with maximum security guarantees. In addition, the file (original and signed) is stored electronically for at least 5 years, as required by Spanish legislation.
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What are the advantages of electronic billing?
Electronic invoicing is currently prevailing in most of the public administrations worldwide. It entails countless advantages, ranging from cost reductions to enhanced security. Automating transactions reduces the administrative burden and thus boosts productivity. In addition, the reduction in shipping and paper costs allows huge savings. In fact, the Spanish government estimates that the annual profits could reach 51 million euros.
Alongside these aspects, we should also highlight the faster payment times for suppliers. All the stages an electronic invoice goes through are recorded in the accounting registry and the supplier may access this information. In addition, Organic Law 9/2013, sets forth a general maximum period of 30 days for payment of invoices to suppliers, and a deadline in certain cases which may not exceed the 60-day maximum payment term set by the European regulation and its transposition into our legislation.