Jan 14, 2025 12:53 PM
As we reflect on 2024, it’s clear this was a year of significant transformation in the world of e-invoicing and compliance. Businesses and governments across the globe took substantial strides toward modernizing financial operations. Yet, this progress was not without its challenges and surprises.
A year of global mandates
2024 saw a tidal wave of e-invoicing mandates as countries like Malaysia, Singapore, Poland, and France implemented or announced compliance requirements. While these mandates aim to enhance tax compliance and streamline processes, they also created a complex web of requirements for businesses to navigate.
One major development was France’s sudden removal of the PPF option, requiring businesses to use a PDP for compliant invoicing. This effectively mandates every business to partner with a private operator to handle invoices in a compliant manner. Markus Hornburg, Basware’s SVP of Global Compliance, observed, “The abrupt change highlighted the unpredictable nature of these mandates.” Similarly, Poland postponed its KSeF mandate just months before implementation due to systemic errors, illustrating how even well-intentioned regulations can face significant hurdles.
"The most memorable thing from 2024 for me is how France changed their entire project by abruptly removing the PPF option very unexpectedly and suddenly, throwing the whole market into a new situation of needing a PDP to be able to send and receive compliant invoices,” recollects Markus Hornburg, SVP of Global Compliance at Basware.
“For me, the most memorable thing in 2024 was Poland postponing their mandate indefinitely due to major errors identified in the KSeF system just a few months before implementation,” says Senior e-Invoicing and Compliance Advisor, Gustav Gnosspelius.
Surprises and highlights
2024 was marked by surprising developments and significant lessons for businesses to carry forward into 2025. When asked about the biggest surprises in the global compliance market, our experts highlighted a striking lack of risk management and realistic planning among both companies and governments. Many businesses continued to adopt a reactive approach to mandates or even ignored requirements until it was too late, leading to fines for non-compliance and expensive, and rushed implementation projects. Proactive planning, on the other hand, allowed businesses to use mandates as opportunities to digitally evolve their finance functions, reaping significant benefits beyond compliance.
Governments also faced challenges, with many adopting overly optimistic timelines and underestimating the complexities of e-invoicing systems. Some, surprisingly, have yet to begin addressing the VAT gap or initiating e-invoicing transformations in their regions. Additionally, the variation in mandate solutions across countries underscored inefficiencies. Each country’s desire to implement its own unique approach often felt like reinventing the wheel, creating unnecessary complexity. A global or regional approach could bring much-needed clarity, effectiveness, and resource savings.
Within the EU, the fragmented nature of compliance requirements was particularly evident, with notable surprises such as Germany allowing XML e-invoice exchange via email, instead of opting for a more well-developed e-invoice exchange method. The ViDA (VAT in the Digital Age) initiative marked a significant step forward, advancing harmonization efforts and promoting digitalization.
Despite these hurdles, there were standout highlights in 2024. Continuous Transaction Controls (CTC) systems gained traction, aiding efforts to combat VAT fraud, while AI-driven tools and cloud platforms streamlined compliance processes. Demand for e-invoicing digitalization surged, with the Billentis study projecting an annual growth rate of 10-20% in e-invoicing volumes driven by mandates. By 2028, the market value is expected to soar from $8.9 billion to $23.7 billion, underscoring the momentum behind this transformation.
Basware also celebrated significant milestones in 2024, including the launch of a new compliance strategy shaped by customer needs. “Our new vision, moving from country mandate coverage one by one to true compliance and audit capabilities on a global and continuous scale, is setting a new standard in the industry,” shared Lars Madsen, Basware’s CMO. This approach represents a pivotal shift toward supporting businesses with scalable and proactive compliance solutions.
Lessons for 2025
The key takeaway from 2024? Proactivity is essential. Companies that embraced mandates as opportunities to digitize finance functions reaped significant benefits. By contrast, those that took a reactive approach faced higher costs and non-compliance risks.
Looking ahead, it’s clear that e-invoicing mandates will only increase, both in quantity and in scope. Businesses must prioritize compliance strategies and adopt global solutions to navigate this evolving landscape effectively. Stay tuned for our next blog, where Basware experts share predictions for 2025 and beyond.
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