E-invoicing gathers steam

February 17, 2011  |  Electronic Invoicing

SWIFT is working together with the e-invoicing community through an e-invoice ad hoc group to facilitate growth and further development of e-invoicing. The group is looking at what elements are needed to make interoperability easier and how SWIFT components can be used to make it happen. Supply Chain on SWIFT spoke to a bank and a corporate to gather their views on how e-invoicing is progressing.

During a dedicated session at Sibos, Ifor Williams, senior vice president, Fundtech FSC, told participants that the company’s e-invoicing business in Europe is now expanding by 40% a year. “The challenge is that there are over 400 organisations providing e-invoice services in Europe, but so far very little interoperability,” he pointed out. The solution is to reinforce links between bank networks and non-bank e-invoice service providers.

“Banks have mass reach for SMEs and service providers are best equipped to handle the complex needs of large corporates, so addressing these markets respectively is the best way to bring everyone into the e-invoicing chain,” he argued. “Banks don’t yet have a shared vision, but interest is building,” said Erkki Poutiainen, head of payments infrastructure, Nordea. The Euro Banking Association (EBA) working group on e-invoicing has published a draft rulebook for standardising business rules and the European Commission is lending its weight by promoting e-invoicing connectivity standardisation via ISO 20022. SWIFT has been working with major e-invoicing service providers to define how SWIFT’s network and standards can help stakeholders address interoperability issues and improve the value proposition for their customers. Participants in SWIFT’s e-invoicing ad hoc group include Basware, Danske Bank, ING, Nordea, Swedbank, Société Générale, Anachron, Bottomline Technologies, b2boost, Equens, Fundtech, Isabel, SIBS, Tieto and Unifiedpost. There is also a close relationship to the e-invoicing activity at EBA.

Ad van der Poel, head, e-Business, ING Wholesale Banking is responsible at the bank for innovation in the area of payments and cash management on the business side. “We started four years ago with e-invoicing,” he says. “We had looked at it before over the past decade, but didn’t feel the market was ready until 2006.” At that time, he explains, an initiative was introduced in the Netherlands to introduce business-to-consumer electronic invoicing. “We then started thinking about offering it to our business clients,” he says. “Our reasoning was that the invoice is the initiation of a payment. It plays a key role in the supply chain of the client and the switch to the financial supply chain.”

For van der Poel, SWIFT entered the picture in 2009. “From a bank perspective, we want e-invoicing to be more and more integrated with payments and cash management but also with financing,” he says. “E-invoicing is a networking product similar to a fax or phone. The more people use it the more valuable it becomes. We want to create the largest possible network of users.” One way of achieving that, particularly with cross-border invoices could be by re-using the SWIFT network. “We’ve been involved in SWIFT’s ad hoc e-invoicing group from the start,” says van der Poel. “We are only interested if we can pilot an actual invoice from an actual client A to an actual client B and not just have two machines talking to each other on a technical level.”

The group is in the process of constructing pairs of clients to pilot e-invoicing over SWIFT, “It is not so easy to find two corporates with different banking providers in different markets that already have a relationship, but we are making good progress,” he says.

A corporate view

Stora Enso is a global paper, packaging and wood products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. It has 27 000 employees in more than 35 countries.

From 2007 to 2010, the group conducted what it called the Stora Enso Finance Transformation project. As part of that, Stora Enso wanted to take full advantage of the cost saving potential of e-invoicing. “Our initial focus was on e-invoices within Finland, but we have also been working on crossborder e-invoicing,`’ says Pirjo Ovaska, coordinator, e-invoicing, Global Finance Service Center, Stora Enso. While the umbrella project was completed in October 2010, the e-invoicing project continues.

The benefits are tangible, says Ovaska. One is a shortened handling time. “Our paper invoices today go to a Swedish scanning centre and it takes 2-3 days to post invoices to Sweden and then another day for scanning to our accounting system,” she explains. “If a vendor sends an e-invoice today it will be in our system today or latest tomorrow. Stora Enso is also a very large company and it sometimes takes a lot of time to steer a paper invoice to the right business unit. The exact addressing of e-invoices saves a lot of this manual work.”

Ovaska suggests that a number of big companies are moving to e-Invoicing. “I have been a member of the Finnish e-invoice Collaboration Network, where most big Finnish companies are represented, such as UPM, Wärtsilä, Kesko, Sonera etc,” she says. “We all have the same target – to promote e-invoicing both in Finland and cross-border.” She would nevertheless like to see closer collaboration between banks and corporates on the issue. “We have very good cooperation with Nordea, but I would like to have cooperation with more banks,” she concludes.

Supply Chain on Swift

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