Is e-invoicing a government issue?

Just as long as it is not a bureaucrat's dream

Electronic invoicing ­ one of the darlings of dot com optimism ­ might be making a comeback.

First, Abbey set up the UK’s first commercially available business-to-business e-payment system (Computing, 2 August).

Now the European Commission is considering an EU-wide scheme. The proposals are truly massive: a standard e-invoice for use across all 27 member states, along with legislative changes to make sure different tax systems can be fitted together, and regulatory tweaks to encourage business to use the system.

As part of the i2010 strategy to boost Europe’s economic competitiveness, the scheme may have much to recommend it. And the numbers are certainly enticing ­ business could save as much as £164bn per year, says the Commission.

But before we get carried away by the rhetoric, there are some serious questions to be answered.

On a practical level, EU-wide e-invoicing will have to overcome the same standards issues that pushed so many commercial outfits to the wall.

There is also the small matter of who, or what, willactually build and run the system surely not the Commission?

But the biggest question of all is: why is this a matter for government?

Whatever the drawbacks of free market capitalism, it is at least reliably good at spotting where there is money to be made. If there is an annual windfall of £164bn at stake, why is the Commission the first to spot it? And why will businesses need regulatory incentives to persuade them to use it?

Perhaps it is just a question of Brussels removing out-dated legal obstacles. Perhaps now, 10 years on, the business world is ready for e-invoicing.

Just as long as the Commission is not being seduced by a bureaucrat’s dream, conjured up in an office using a spreadsheet rather than the realities of how firms do business and what their requirements are.

The competitiveness of European business is vital to its future. Castles in the air do more harm than good.