Weblog: An aria to e-invoicing

September 15, 2008  |  Electronic Invoicing, Publications  |  Comments Off

The last bit of my day today was chairing a discussion on e-invoicing.  This is a regular debating slot I host on the IBM booth each year, and it’s now in its third year.  This afternoon’s debate included Charles Bryant, former Chairman of the EPC and now working on e-invoicing with the EBA, and Bo Harald who chairs the European Commission’s e-invoicing working group.

It shocks me that e-invoicing has now been on my radar since 2004 and yet it’s not much further on.  With bank margins being slashed thanks to SEPA and other competitive forces, you would think the value-adding services to corporates, such as e-invoicing, would be way up there on top of the agenda. 

And yet, I don’t see it.
I see a few banks doing stuff and, as Bo said, six of the EU nations mandating that e-invoices must be used but, apart from a few isolated examples, it is still small beans with 95% of EU invoices being processed on paper.

With 24 million small businesses in the EU, and the cost of invoicing being around €50 to process for an average paper invoice, this is ludicrous.  But who am I to judge?

What was interesting for me is that out of this debate a new angle appeared.  The audit angle.

If EU banks and corporates are serious about compliance, the fact that the electronic trail of an invoice from origination through delivery to processing will be a critical reason for change.  After all, if you can track the e-invoice and its associated Purchase Orders, Delivery Documentation and Remittances, you now have a perfect e-trail for the audit and tax office.  Compare that with the bits of lost and dog-eared papers that most firms produce today and you can see why, in about five years, everyone anticipates half of all invoicing will be processed electronically.

After that debate I was immediately out of the conference anyway, as I was serious.  I’m off to the opera house to see Verdi’s La forza del destino with Nina Stemme, Carlos Alvarez, Marcello Giordani and Ain Anger.

Because Vienna hosts one of the best opera houses in Europe and, with parties and dinners all week, I thought I’d be a good boy tonight.

That’s another day!

Published by: The FinanSer

Weblog: Paper invoices have NO future

August 17, 2008  |  Electronic Invoicing, Publications  |  Comments Off

It is evident - paper invoices will disappear from the business to business and business to government sectors and then later in practise also in the business to consumer/government to citizen area. The 5 mega-class reasons are exceptionally powerful and clear to see. Everyone will benefit - especially the consumers and tax payers.

It is only a question of time.

And how this can be very short.
In the EU Expert Group work it is becoming clear that there are two domains:

1. Mindset
Once the mindset is that there is NO future for this wasteful practise things will start to happen. And it is already - public sectors in 6 countries and many progressive enterprises have declared e-invoicing mandatory (with near or already passed deadlines). 10 more EU-countries have similar plans. As these heavy duty players defacto force invoice senders to take the step and the market has come up with the needed open standards and economical tools it is inevitable that e-invoicing will be used in all directions. Paper invoices will quickly become an oddity.

Spreading the awareness that paper invoices have NO future is clearly the top priority.

2. Removing obstacles and increasing enablers for a wider unified market
Much of the progress happening now is by necessity countryspecific. Nothing wrong with that - on the contrary - efforts towards moving with the slowest should be firmly resisted. Interoperabity is not that difficult to achieve and move to the coming common mass market standard will anyway take time. But for those who realize how much the continuos improvement in the wellbeing of European citizens is dependent on unifying European markets it is evident that firmer action should be taken also in the crossborder dimension of this omnipresent - and thus so potential document. Economic strength is both a question of scale and today even more of moving faster into the technology-enabled innovation space. Some argue that the share of crossborder invoices out of the total number of 30 billion is so small that there is limited needs for EU efforts. Here one should remember that the very reason for both payments and invoicing being so local and fragmented has been national regulation and infrastructure. Now we are moving towards one-bank-account-being-enough for all of the €-area. What could be the reason for it not being possible to send invoices in the same way? With the right mindset it should not be particularly difficult. But of course it takes the right attitude:

1. the e-invoicing service must be irresistably easy to use for the 24m SMEs (just like payments are starting to be)

2. there must not - in the base case - be any need to invest or install software - just a template in a secure environment - this makes both the knowledge and financial threshold disappear

3. all services where authenticity and integrity is on an acceptable level must be accepted - technology-neutrality (no mandatory PKI seriously adding cost and complexity)

4. electronic documents should not be treated essentially differently from paper documents - they are anyway automatically more safely transmitted and have traceability (the opportunity to fight fraud should naturally be used by creating rules for the network)

Excellent progress is being made - but there is naturally much more to do. But it all starts with the mindset - understanding the inevitability and the reasons for why it should really be speeded up and contribute to a stronger Europe sooner rather than too late.

Published by: Bo Harald

A Control Framework for e-Invoicing

August 15, 2008  |  Electronic Invoicing, Publications  |  Comments Off

Today’s business processes are to a large extent still paper-based, which results in inefficiencies as paper needs to be forwarded from one employee in a firm to the next either in the same firm or in another firm before it reaches its final destination.
Read more… 

Source: Twist