The European Commission is considering plans that could save the region’s businesses €243bn (£164bn) a year by enabling them to exchange bills and payments electronically.

A steering committee of representatives from industry and the public sector will convene early next year to consider the implications of the proposals ­ including legal changes, and regulatory incentives to encourage businesses to use e-invoicing.

The aim is to be as practical and inclusive as possible, said a Commission spokeswoman.

‘The committee will act as a forum for stakeholders to discuss proceeding and what is needed in terms of legislation,’ she said.

The concept of e-invoicing is not new. In 2001 the European Parliament passed a directive requiring member states to recognise the validity of electronic bills. And one of the first tasks in establishing a regional system will be creating a standard invoice so that businesses can bill any EU supplier the same way.

But the list of dot com casualties included several private sector e-invoicing providers stymied by the lack of standards. And while many large businesses already have their own electronic billing and payment networks, there are no accepted standards and few operate internationally.

The Commission will also need to update the existing legal framework to cope with the region’s different tax systems, according to technology lawyer Struan Robertson, from Pinsent Masons. ‘Businesses have lost confidence,’ he said.

‘Countries have complied with the 2001 directive in different ways, but the interrelation of VAT, accounting, payment, authentication and data retention laws has hindered progress.’

One of the chief aims of the scheme is to encourage Europe’s smaller businesses to ‘go digital’. But there is a real risk that some will be excluded, said Federation of Small Business (FSB) national IT chairman Peter Scargill.

Some small UK firms have reported losing business after bigger companies refused to transact with them if they did not use electronic invoices.

‘My concern is that smaller firms will be alienated by this system and given even less chance to compete in a European marketplace,’ said Scargill.

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