Many small businesses in France to be hit with costs of electronic billing

Efforts to reform French business practices by imposing facturation électronique (electronic billing) on all firms registered for VAT have run into issues after the new government scrapped plans for a free platform to enable it.

It means that all affected businesses must sign up with expensive service providers.

Reaction was furious from small business trade bodies.

“While we were promised a painless reform, without supplementary costs, through a free government platform, suddenly we have to pay for platforms if we are to meet legal obligations,” said Bénédicte Caron, vice-president of the Confédération des petites et moyennes entreprises.

She added: “Once again, a so-called simplification has made life more complex for businesses.”

Read more: 13 ways France aims to make using its state services less frustrating

Cut-off date to switch

Sage, a UK firm which has long been a leader in accounting and business management software for small firms in France, has its cheapest offer including electronic billing priced at €18 a month, before VAT.

Mandatory electronic billing is due to come into force on September 1, 2026, but before then all businesses must have signed up to a platform to handle it, and be able to receive bills only in facturation électronique format.

Larger firms will have to start issuing all their bills through the platforms from September 1, 2026, while smaller ones have till September 1, 2027.

Designed to cut down on VAT fraud, the electronic billing platforms will alert tax authorities from the moment the bill is sent, let them see when it is paid, and allow firms to automatically calculate their VAT payments each due date.

Originally the government said it would provide a free platform to do this, but the government of former prime minister Michel Barnier said it will not be ready in time. Instead, it has published a list of 72 companies offering a paid-for service here.

In a leaflet explaining its facturation électronique offer, Sage starts off by listing the advantages it envisages for clients, including improved cash flow.

It claims that issuing electronic bills will cost less than systems presently in use, which usually involve filling out a bill on a computer, converting it into a PDF document and emailing it to the client.

The automatic time-dating of the bill and its trace will mean there is no chance of the client claiming they did not receive the bill, it adds, and VAT declarations will be filled automatically, gaining time.

Three accounting software formats

Although the implementation date is over a year away, businesses have been warned they need to make sure their accounting and computer systems are ready.

This will include making sure all bills include the SIREN number of the company, the nature of the bill (sales or professional services, for example), a valid address for the company the bill is being sent to, payment methods and VAT details.

The bills will have to be in one of three accounting software formats: Factur-X, UBL, or CII.

A trial platform is promised for 2025, allowing businesses and their accountants to check if their new systems conform to the electronic billing system.

Firms which sell only to individuals and not to other registered businesses are not concerned by the full electronic billing requirements, but will have to use e-reporting of VAT to tax authorities – something many already do.

Electronic billing will also apply when bills are issued for deposits before work is completed – common with building projects, for example.

In these cases, VAT on the deposit will be due when the bill is paid, and firms will have to make sure the final bill is linked to the first one in order to avoid paying the deposit VAT sum twice.

Although the switch to electronic billing will be a major change for many businesses, the news does not seem to have filtered down to banks, which are trying to encourage small businesses to use professional accounts rather than retail ones.

Some of these accounts promise help with issuing bills, including offers from Crédit Agricole, but when the professional section of the bank in Charente-Perigord was asked by The Connexion if facturation électronique was included, there was complete bafflement as to what it was.

Many businesses registered for VAT use accountants, and Sage recommends they talk to their accountants as a first stage of preparing for the switch.

Read more: VAT, small firms, workers, education: Changes in France in 2025