Denmark helps businesses with national e-invoicing system

January 19, 2010  |  Adoption, Electronic Invoicing

A national electronic invoicing infrastructure has eased B2G and B2B transactions in Denmark. Catherine Lippert, Acting Deputy Head, Division for IT Infrastructure & Implementation, National IT & Telecom Agency (NITA) spoke to FutureGov about the drivers for the project and the agency’s plans to migrate the system into the cloud.

It is mandatory by law for businesses to submit an electronic invoice when supplying goods or services to the Danish government. This regulation creates a barrier to the 300,000 small and medium size enterprises which are mostly relying on paper-based invoicing. “Most of the existing solutions for e-invoicing have been too complex and costly to be viable alternatives for smaller businesses,” explained Lippert.

As for the remaining 200,000 businesses which could afford digitising the invoicing process, there was still inefficiency. Most corporations use stand-alone invoicing applications or Enterprise Resource Planning (ERP) systems which could not interact directly with the systems of other companies.

In order to facilitate business with the government and among the industry, the NITA deployed a national e-invoicing service, called ‘NemHandel’. It allows businesses to send standardised e-invoices through the internet. Based on open and common standards, NemHandel also allows businesses to send e-invoices which were generated in their internal ERP or invoicing systems.

By December last year (2009), approximately 66,000 Danish companies had used NemHandel, which accounts for more than 20 per cent of all companies. On average, the system registers 4000 new users per month.

According to Lippert, NITA has seen growth in the number of users integrating NemHandel into their internal systems, using it for business-to-business transactions as well. “We are very pleased to see this trend. NemHandel is allowing true interoperability among businesses in the country,” she added.

NITA estimates that the project will save businesses about EUR 591 million (US$849 million) per year from reduced invoicing costs. The public sector expects to save EUR 10 million (US$15 million) annually. Savings come from ceasing payment for the use of proprietary networks and subsidies which government uses to give to smaller businesses to scan paper invoices.

For the next step, NITA is working to migrate all NemHandel infrastructure components to the cloud. The migration progress is expected to be completed in the beginning of March this year.

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