Maintaining adequate legal evidence is of the utmost importance when it comes to electronic invoicing. Even in Europe after 1-1-2013. We can practically hear you asking yourself: “Well, which technology solution should I use then?”
Electronic data interchange (EDI) and digital signatures are the two primary established methods of exchanging invoice data and are both understood by businesses and governments alike. But if the two would compete in a race, who would win?
Gentle(wo)men, start your engines!
According to GXS’s Nigel Taylor everyone wins, but fortunately he did go through the trouble of writing an elaborate comparison of the two. We believe a summary of his points is sufficient:
Compliance and auditability [Europe]
If we consider Europe alone, the first lap is clear cut. EDI conforms to 1994/820/EC and digital signatures conform to 1999/93/EC, which ensures the integrity of the content and the legibility of an invoice. Compared with other methods EDI and digital signatures both emerge as equal winners.
Complexity
EDI solutions exist for all company sizes, from large multinationals to SMEs and can be fairly easy to implement. However, setting up digital signatures is less complex than EDI and they are flexible enough to be sent by any means, including the internet. Digital signatures win!
Data confidentiality
Due to the robust nature of the EDI network each message is sent within a secure environment (in accordance with 1994/820/EC). Confidentiality is difficult to ensure using email for transport and this is why digital signatures end up in a gravel trap this round.
Data processing & integration
Both EDI and digital signatures use UN/EDIFACT and XML files. The decisive factor is the agility of file conversion. The files are locked when using digital signatures and these documents need to be re-signed if converted from the supplier’s format to the buyer’s format. EDI wins, because there are no restrictions to when conversion can take place.
Archiving and human readability
The storage of invoices by electronic means is irrespective of format and so applies to both EDI and digital signatures. Human readability? The trophy goes to digital signatures, because PDFs are often already human readable. XML-based standards can be read through style-sheets, but non-XML EDI must be converted through a rendering tool. This can cause confusion.
Interoperability
EDI is very straightforward when interoperating. It generally works well across borders when the two countries accept EDI as a compliance method. Digital signatures are extremely operable as well, but the problem is that in practice you may still find proprietary and sector or country-specific implementations that create validation problems. Score, EDI!
Community
Pure-play e-invoicing providers that leverage digital signatures often rely heavily on web portals to enable each trading party to connect with any other. However, these portals are only effective when focusing on a specific industry level. Despite its integration pedigree, EDI can be slower in building these connections between trading partners, due to the more technical nature of the network. No points scored here.
So, we have a tie. Was it all for nothing? No, but we do think that you are more than capable to decide for yourselves. Which one of the two should you choose?
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