Cross-border e-invoicing doesn’t work – or how Mr Linkama Goes to Krakow

When you complain about invoicing and payment difficulties in the euro area, you may end up at an EU forum on the workings of the Single Market.

Some time ago, I ran into a message on LinkedIn that invited people to write about their experiences regarding the EU single market.

The brief said the stories should present citizens or businesses acting in cross-border situations, facing obstacles to the proper functioning of the single market.

It just so happens that my one-man enterprise has all its clients in other EU countries and has difficulties in both cross-border e-invoicing and receiving payments.

So, off I go and write a rant.

Invoicing thrown back 200 years

In olden days, invoicing worked by you writing the invoice, printing it on paper, putting it into an envelope, licking a stamp and taking the envelope with the invoice to the nearest postbox. The post took days to be delivered, the client’s approval process might be completed before the due date and the money arrived on your bank account some time thereafter.

Then email became ubiquitous, and spreadsheet and word processing software began to allow saving into the pdf format. You as the invoice sender wrote the invoice, saved it into a pdf file and sent it to the recipient as an email attachment. Delivery was instant, and the client’s payment process started immediately when the recipient had read her email and approved the invoice.

Some time goes by. Client companies outsource their financial services. The outsourcing partners won’t accept email attachments. In fact, the invoice sender doesn’t even know who the outsourcing partner is—the only thing you know is the postal address. Not the name of the company, not its contact details, not even who’s responsible.

This makes pdf attachments history and the entrepreneur is left at the mercy of the financial services company.

Again, you write the invoice, print it on paper, put it into an envelope, lick a stamp and take the envelope with the invoice to the nearest postbox. The post again takes days to be delivered, the client’s approval process just might be completed before the due date and the money arrives on your bank account some time thereafter. Despite advanced computer technology, you find yourself in a situation similar to 200 years ago: the whole thing is based on using paper and someone taking the paper physically from one place to another. Clip-clop, clip-clop.

Outsourced financial services delay payment

The antiquated working methods of the outsourced financial services have proven seriously substandard. The invoice does not get passed on to the client for approval in time and/or the invoice does not get paid in time.

The more my clients have outsourced their financial services, the more delayed the payments have become. The usual payment time in my market is 14 days; yet there are cases where the payment has not arrived until after almost two months.

A very unpleasant situation arises. The service provider (me) has to pester the client because the client is the only identifiable person in the process. Because the outsourcing partner is impossible to contact, the client—who until my complaint has been totally unaware that anything is amiss—has to both listen to my complaints and then start wasting her time on detective work to rectify the situation. The outsourcing partner, of course, couldn’t care less about the customer relations between me and my client.

What are these outsourced financial services getting paid for?

The bank’s fingers in my wallet

Not only is invoicing or payment a problem. The banks make things even worse with alacrity.

For a micro-company like mine, no electronic invoicing service is available. There is financial software and financial portals for large corporations, but no bank or other institution offers small businesses a reasonable way to e-invoice across borders. The small guy pays the most, in the form of delays and uncertainty.

The banks also generously provide another hurdle to the process. For some reason, transferring a sum from my company’s Finnish bank account to its Estonian bank account takes three banking days. Banking days, mind you—when I hit Enter in the Finnish internet bank late in Friday, the sum is withdrawn from the Finnish account instantly but arrives on the Estonian account next Thursday (unless there are any bank holidays in-between). This deprives me from the availability and use of my own money for almost a week. Heck, even snail mail is faster.

The Single European Payment Area was supposed to make international bank transfers as smooth and fast as transfers within one country. Moving money from one account to another in either Finland or Estonia takes about 10 minutes. Even taking into account the banks’ security measures, there shouldn’t be any reason why a transfer couldn’t be completed within one day.

There is a reason, however. In addition to charging a service fee for the money transfer, the banks are protecting their float. (Float here means the time when a sum is not in any account, no interest is paid on it and it can be used by the bank for short-term investment.) The longer the float period, the more the bank wins and the customer loses.

The unexpected results of ranting

Now follows the most exciting aspect of the story.

It turned out I was participating in a writing contest organised by the European Commission.

One story was chosen from every EU country, and this lot then pared down to five “best stories”. The five writers are invited to Brussels to make a short film of their stories, and the films will act as an introduction on the Single Market Forum, a 1,000-delegate conference in Krakow, Poland, in October 2011.

So instead of Mr Smith Goes to Washington, it’s now Mr Linkama Goes to Krakow.


Can you help me please?

I’m sure hundreds of small businesses are having the same type of problems I outlined above. If you’re one of them—or know someone else wrestling with similar issues—I’d be more than grateful if you could let me know. Those stories would be powerful ammunition at the Krakow conference. You can contact me confidentially either by email to or through the contact page on this site.

And as always, if you want to air your views about the subject here, the comment field is right below…

My winning story is Businesses hamstrung by e-invoicing not working across borders (pdf), and you can read about the Single Market Forum here.



The story continues. Read a quick update here, a report on how the SIMFO 2011 conference went, and what happened next.

#Estonia#EU#Finland#invoicing#SIMFO 2011


  1. Michael - 2013-04-13 @ 14:43

    I was amazed to see that this dates from 2011, because as far as I can see, nothing has moved forward. I do believe the single payment area is a significant step up from previews ages, as until recently I was still getting cheques from French customers that were mystified by the idea of doing IBAN payments (and didn’t realise how expensive cheques are). That has changed.

    I now see that there are moves to make payment collection easier between countries, which is the obvious next hurdle.

    • Kimmo Linkama - 2013-04-16 @ 16:49

      Thanks for dropping by, Michael! Yes, it amazes me, too, that there’s been so little progress. The idea of SEPA is great and already working to some extent, but the cross-border invoicing problem is a big one and still largely unsolved. As far as I know, the Economic Commission is working on it, but the work seems to go at a snail’s pace. One of the reasons may be that countries who have adopted e-invoicing are all using their own systems, and melding them together into a workable standard meets with national resistance.

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