BPO sets the whole invoicing process back some 200 years [UPDATE]

September 30, 2011  |  Adoption, Electronic Invoicing

This Column by Kimmo Linkama was one of the Winning Stories of the Open Competition by the EU Single Market Forum. This competition is organized jointly by the European Commission, the European Parliament and the future Polish Presidency of the Council.

Update
Kimmi is not the only one dealing with this problem. Antti Larvala has the same problem.

Do you experience similar problems with e-invoicing like Kimmo? Either as a seller or a buyer — would you please let him know? It could be powerful ammunition at the SIMFO conference in Krakow.

Even if you post your replies here as comments, could I ask you to also copy them to my email address [email protected]?

BUSINESS HAMSTRUNG BY E-INVOICING NOT WORKING ACROSS BORDERS

“Originally from Finland and still a Finnish citizen, I have now lived and run my one-man company in Estonia for 6 years. I must say the change went surprisingly smoothly — of course, there was a certain amount of bureaucracy involved, but nothing that couldn’t happen in your native country.

Business-wise there is one big hurdle, though.

Although my business is registered in Estonia and I’m physically in Estonia, all my clients are in Finland. This means I’m sending all my invoices to Finland.

Both countries are using the euro currency, are members of the EU, have advanced electronic banking systems and operate pretty much in the same way in business. The Single Euro Payment Area (SEPA) has been around for years, and in both countries you can bill your clients electronically — as long as you’re sending the bills within the country. Cross-border e-invoicing is impossible.

I used to circumvent this by sending my bills in PDF format by email, but now more and more clients have outsourced their financial administration, and the outsourcing partners do not accept PDF files.

Now I have to print out the invoice on paper, put it in an envelope, stamp the envelope and physically take it to the nearest mailbox. This effectively sets the whole invoicing process back some 200 years.

My company has a business bank account in Finland for the convenience of my clients (amazingly, it was possible even though the company is registered in another country). This, however, does not enable my company to e-invoice in Finland, because a Finnish Business ID number is required for the process. You guessed it, an ID number will not be given to a company registered in a foreign country.

When a Finnish client pays the bill to the Finnish bank account, the problems are not over yet. For some unfathomable reason it takes THREE banking days to transfer the money from my company’s Finnish bank account to its Estonian bank account. If there happens to be a weekend or public holiday during those three banking days, I’m practically deprived of the use of my own money for the best part of a week.

This is totally unacceptable. I fail to understand why, given that the technological framework has existed for years, an international bank transfer could not happen within the about 10 minutes it does domestically.

I fail to understand why, given that the technological framework has existed for years, an international bank transfer could not happen within the about 10 minutes it does domestically.”

Background
This competition is organized jointly by the European Commission, the European Parliament and the future Polish Presidency of the Council within the framework of the Single Market Forum.

The Single Market Forum (SIMFO), aims at bringing together citizens, businesses and public authorities from all over Europe to take stock of the single European market as well as to discuss on new ideas for forthcoming initiatives and on how to improve implementation of the Single Market Act.

The goal of this competition is to collect “real evidences” of the use of the Single Market by their main actors (citizens, consumers, SMEs) from all Member States. These stories will serve as a starting point of the discussions in the Single Market Forum.

Original article:
http://www.tellusyourstory.eu/content/businesses-hamstrung-e-invoicing-not-working-across-borders
http://www.linkama.com/news/cross-border-e-invoicing-doesnt-work-how-linkama-goes-to-krakow/


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4 Comments


  1. I’m humbled and honoured about being featured on your site!

    If you have similar problems with e-invoicing — either as a seller or a buyer — would you please let me know? It could be powerful ammunition at the SIMFO conference in Krakow.

    Even if you post your replies here as comments, could I ask you to also copy them to my email address [email protected] ? This allows me to find all the replies in one central place and avoid missing anyone. Many thanks!

  2. Hi Kimmo, a very interesting - but all too believable story.

    We are an e-invoicing company processing hundreds of thousands of invoices for our customers - we are the bad guys in your story - except we are not. Many suppliers use emailing PDF invoices as a first step to getting away from paper. However the problem for the recipient is that they have no way to process this electronically - they have to print it out and process it as a paper invoice. That doesn’t suit them if they are trying to automate invoice processing.

    We recognised this and now we have a solution which will receive PDFs by email, strip them from the email, open them up, read and translate the data and create an XML file of the invoice which we then put into our customer’s finance system together with an image of the PDF. If the PDF is a simple image file (for example if you have scanned a document into a PDF) then we will run an OCR process on the image and create the XML from that. Being able to convert PDF to XML accurately has made a big difference to our customers and their suppliers!!

    We would be happy to talk to any of of your customers about processing your PDF invoices and giving them a file in a format they can use.

    Regards,
    Peter

  3. Come on… nice story - but the problem is that the involved businesses wont adapt the eBusiness as long as they can avoid it - EVEN if the can save their investment in a few month.. the same goes for their document handling in general..
    The systems are here - just call..

    But dont ask for business case - our time is to precious… join the train or be left behind..
    Thats reality.

    If you look at your business documents as being tactical - dont call us… if you have a strategic approach - fell free to ask for help..

    Carrsten Johan Thessen
    CEO
    National Expert UN/CEFACT

  4. Kimmo,

    The issue is the word e-mail. Personally I do not have anything against e-mail, but most of the accounting/book keeping BPO’s want to use professional e-mail networks instead of e-mail. This is due SLA and some legal issues. I am sure that the cost will not be an issue as some of the services even cost less than the stamp alone, not counting the envelope. In Finland alone there are almost 10 different parties that you can use for e-invoices if you are not too “addicted” to e-mail based solution, but Web would do as well ;-)

    About the SEPA: Actually SEPA has been mandatory only for couple of months now. The goal is to get the lead times in payments down, but there are some parties resisting that due legacy and historical reasons….