The European Union E-invoicing Expert Group has garnered a lot of attention with its efforts to harmonize e-invoicing practices amongst the industry’s most prominent players. Now the group has published the final report for its Phase 2 activities. It’s a lengthy report, a full 111 pages of dense formulations.   Having spent a considerable amount of time reading it, I thought I’d save you the trouble by writing a summary.

The report tried to touch on just about every e-invoicing issue, leaving the focal message rather unclear for the reader.  Indeed, skimming the table of contents brought to mind that Fats Waller song that says “all that meat and no potatoes, just ain’t right.” So let’s add the potatoes.

The report lists several recommendations / issues for its future work.  They are:

1. The need to focus on making e-invoicing a mass-market application for the small-to-medium sized enterprise market.
2. The need to provide clarity with respect to national legislation regarding e-invoicing.
3. The call for an interconnected “e-invoicing ecosystem” where multiple e-invoice operators and other service providers are to interoperate and route traffic between each other – similar to how it’s done in mobile phone communications
4. The suggestion to begin the adoption of a single e-invoice content standard (UNCEFACT Cross-industry invoice) to provide a level playing field for all parties relying on the so-called e-invoice data file for automated invoice generation and processing.
5. The call for an EU-level organization or “organizational process” to implement the suggested changes, and the call for a set of campaigns to disseminate those key messages in order to enable a transition from the current e-invoicing landscape into the level playing field mentioned above.

One additional nugget in the report is the call to abandon the current practice of having e-invoices signed with a qualified digital signature in favor of an “equal treatment of e-invoices with respect to the handling of paper invoices”.  (See R 2.1 and R 2.2 in the report and Page 30.)

At Basware we welcome these recommendations.  Already, today our offering is compatible with the statements in the TOC report. 

However convergence to a single e-invoice data file format remains a long-term dream.  Basware takes a more realistic stance in the sense that we are accommodating both the senders’ as well as the recipients’ demands by providing a controlled conversion process enabling each customer to use their preferred format. 
 
Digital signing of e-invoices can be perceived as a nuisance or as a blessing for proving that files have not been manipulated. At Basware we take a neutral stance. We have both experience in countries where digital signing is a must and in others where there is a preference for reliance on other IT-controls to ensure authentication and e-invoice integrity.

Overall, the report leaves me feeling that all the ingredients are on the table and just waiting for the right cook to come along and make a tasty and balanced meal out of it all.

If you feel like giving it a go, try these:
http://ec.europa.eu/enterprise/newsroom/cf/document.cfm?action=display&doc_id=5544 (Final report)
http://www.e-invoice-gateway.net/start/  (Portal page)
http://www.e-invoice-gateway.net/knowledgebase/countryrelated/ (Country-by-country comparison)
http://e-invoice.basware.com/

And have a look at their E-invoice Gateway website that enables you to do a brief country-by-country comparison of e-invoicing-related legislation.  Though not yet comprehensive and clear enough for individual e-invoice sending or receiving parties, it is still a commendable effort.  Go ahead and try it out.

Juha Hakamies ebusiness, market trends

A few weeks ago I spent a fascinating week in the US, talking to some of the leading industry analysts. The trip not only highlighted the exciting developments there in procurement solutions, but also reinforced our view that the US is still playing catch up with Europe in understanding the benefits and adopting invoice automation. And when you see other vendor messages out there, some of them are a little wide of the mark!

Workflow and automation definitions are being confused, with scanning and workflow vendors appearing to claim to offer automation, which from my more Euro-centric view, they most certainly do not.

Invoice workflow manages invoice flow digitally, shifting the process from manual circulation. This typically means that you either use pre-defined or administrator-set rules on how the invoice is to circulate within the organisation. There is very little automation in the form of automatic notifications, escalation procedures and archiving. While workflow systems enable organisations to free up time that was previously spent on manually inputting data, they don’t fix the problems an organisation may have with processes. As a matter of fact, computerised workflow just speeds up the rate at which problems occur.

Automation, on the other hand, applies technology to the rules-driven design process that automates these circulation and approval procedures. This allows companies to work smarter and better, as well as letting them totally skip the manual phases.

The difference in terms of results to the customer between automation and automated workflow are significant. Let me give you an example:

Accounts payable (AP) organisation performance is often measured by the number of invoices they are handling for each AP person (=invoices per FTE per year (full time equivalent)). In early 2009 the Hackett group published a report defining the top AP departments which function at the level of about 35 000 invoices per FTE, with manual circulation replacing electronic workflow.

One of our UK clients, ADT & Tyco, recently introduced our invoice automation with matching invoices against contracts and orders – and they receive a good number of e-invoices! As a result of automation ADT & Tyco can now handle 70 000 invoices per FTE. 70 000 invoices per FTE meant that they were able to reduce the number of resources handling invoices from 40 to 6 people and save EUR 400 000 in the first year. By further increasing the percentage of e-invoices we have been able to help other customers to a level of about 130 000 invoices per FTE per year.

That’s a big difference, and, as a customer, I’d want to know what I’m getting when I’m being sold a so called automation solution, that may be in fact an automated workflow solution.

Winning a customer in the US, or anywhere else for that matter, should be based on the correct use of industry standard terms and, of course, customer proof points. A great testimonial proving measurable business benefits makes so much more impact than a vendor telling a prospect just how awesome their offering is!

Juha Hakamies ebusiness

We’ve just got back from the EXPP conference in Amsterdam and wanted to provide an update on all the interesting discussions we had there. The annual EXPP event is a great place for e-invoicing operators to look at the trends and advancements in the e-invoicing field. This year, the 3-day event attracted around 300 participants.

There were three key areas highlighted this year:

• Looking at the reach and interoperability of e-invoicing solutions across Europe
• Hearing about the progress of the EU working groups in providing a standard environment for e-invoicing across the 27 countries
• Discussing best practices communication in this market, to provide customers, prospects and supplier with the information they need to make sense of what is a fragmented and sometimes overly complicated legal environment.

It’s great to see the positive movement in these areas and hear how we’re all working to grow and inform the marketplace and most now seeing the need to get on board with other operators and create a more open, unified network to increase market penetration further. Based on the fast growth of our own transactions as well similar feedback from other operators, we can clearly claim that Europe is shifting to e-invoicing.

Apart from the obvious savings potential, the benefits of e-invoicing in terms of lowering invoice handling costs and improving internal processes are beginning to gain ground. It is was nice to notice that operators have finally found ways to justify the improvements in customer working capital and cash flow, shorter payments periods and usage of dynamic discounting. The effect of those often being far more important and greater to the customer than just the savings in the AP department.

Another thing I was glad to notice was the activity of the “southern” countries such as Italy, Spain and even more so, Central and South America, with Mexico, Chile and Brazil. Governmental activities in those countries have really been pro-e-invoicing, creating a platform for global companies to start e-invoicing also in those regions.

Even if enforcing standards still take a while – or the EU expert group results still take a year to complete – operators are ready to provide e-invoicing services across the globe.

So don’t hold back – the global interoperable invoice is already here!

Juha Hakamies ebusiness