Voice of the Industry

Doing e-invoicing properly can improve supply chain finance

Friday 16 December 2016 08:53 CET | Editor: Melisande Mual | Voice of the industry

András Kelen,Triad: There are people in the industry who think the results of e-invoicing is falling behind expectations. 

The article below describes some considerations and an alternative to reach certain improvements.

Current situation

Business communication today is extensively relying on the so-called four corner model: Partner A creates a document, some times inserts it into an envelope (paper or electronic), passes it onto its service provider, which makes certain operations, like conversion, finds the service provider of the addressee and passes the document onto this organisation, which again executes certain operations and ultimately passes the document onto the (ERP) system of the receiver (Partner B). During this journey, the content of the document is sealed from the outside world and the issuer looses the control, learning the outcomes in days, weeks or months. It is easy to recognise that the process resembles a lot the old paper procedures, though it is much cheaper and faster by virtue of the internet today.

Need for transactional services

It is also recognised and said in official papers, that e-delivery can be defined as delivery of electronic documents enabling transactional public services. It is clear that this is only an objective without realistic expectation under the current setup. The primary demand in todays business environment is acting quickly, efficiently, precisely, without errors, and above all saving costs.

Purposes of documents

We also acknowledge that documents (e.g. invoices, delivery notes) are never created for the sake of it, but to execute operations on them (rejection, approval, correction, dispute, save, archive, pay etc.). Very few of these need all data elements of the document. For instance, you can make the payment with 5-6 data elements (amount, account numbers, due date, currency, bank ID etc.). By separating these subsets of data from the rest and present the relevant information to the person acting in a specific role can make her/his work more efficient, open up services to competing entities, without disclosing sensitive data not required for the operation. It is quite easy to make this separations (views) if the document is in well structured (XML) format. By definition, a structured XML document with a purpose based veiw will be called a Smart Document. Please note that with this setup up we are halfway to automation.

Sharing the documents to collaborate

We have reached the last stage: what to do with these Smart Documents? The answer comes from the early times of e-billing/invoicing (EBPP) and called presentation or as we today suggest to call it - sharing. This is not the same with what most people think of document sharing; we share elementary document data based on their views under stringent access control and security measures. We name it a Shared Smart Document (SSD) and the result is collaboration among partners.

The infrastructure

So far, we discussed the underlying reasons and principle, but to make working solutions we need a little more: infrastructure. Obviously, this is represented by the internet where we make use of some fundamental services and characteristics: uninterrupted (continuous, real time if you like), bidirectional and symmetric service.

Compliance with standards

Standards are important in all industries, but it is of particular interest in interoperability in government applications and expressly in procurement. The principle of SSD based solutions is not to mandate a future complex standard compliance - particularly not on a syntax level -, but to offer a self-service based solution for the parties to use existing e-invoice formats by partial standard compliance and to meet functional requirements of the receiving organisation aiming at maximum to robotic process automation.

The incremental compliance supports not only the standard over many syntaxes, but allows the use of the special invoice types of various EU countries not fully supported by the coming EU standard and supports the future evolution of the standard.

These will give rise to the following advantages:

  • the shared document can be accessed & executed by anyone authorised, from anywhere (an invoice after being accepted by the buyer can be immediately subject to early or late payment offers from any contender);

  • the status of the document can be monitored;

  • missing or erroneous data can be corrected immediately without making phone calls;

  • complaints/disputes can be settled within the shortest possible time;

  • all partners will have the option to create their own (most efficient) processes and do not need to follow a process created by e.g. the buyer. 

About András Kelen: 

Andras is a veteran of the IT industry. As the sole founder, owner & CEO of Triad he is managing strategic planning, finances and daily operations. Before launching Triad, he had various computer related engagements, including a “detour” into publishing. By education he had graduated from the Technical University of Budapest Faculty of Electronic Engineering (MSc) with strong mathematical and theoretical foundations.

About Triad Computer Services:  

Triad Computer Services was established in 1986. Currently the main focus is high end products and services sold to the Financial Services sector, Government, telco, utilities, major corporations, Shared Services Centres. Since 2000, the efforts are concentrated to Electronic Bill Presentment and Payment (EBPP), e-billing, e-invoicing, supply chain finance, early and late payments.

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Keywords: e-invoicing, e-delivery, EBPP/EIPP, shared smart document, collaboration, 2014/55/EU directive, CEN/TC 434, self-service, electronic processes
Countries: World

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