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Using UNeDocs to facilitate the transition to electronic, paperless, invoicing Geneva, October 2004.
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Using UNeDocs to facilitate the transition to electronic, paperless, invoicingGeneva, October 2004
Electronic, paperless, invoicing can deliver significant savings, facilitate international trade and foster development by reducing the weight of the grey economy Electronic invoicing is now permitted in the EU, but practical adoption is limited due to the lack of a common standard that can be implemented gradually by both large and small suppliers UNeDocs, backed by the UNECE, is a document exchange solution designed to overcome this problem Summary
Agenda Electronic invoicing The UNeDocs solutionElectronic signaturesAnnex - UNeDocs documentation
The invoice is the most important document exchanged between commercial partners. 25 billion paper invoices a year are billed in the US and Europe aloneUse of the electronic invoice (typically based on the UN/EDIFACT standard) is still limited and confined to large companiesHandling a paper invoice costs about 25 euros between seller and buyer. The European Union estimates that European businesses could save €50bn by moving to e-invoicing (FT, 26 May 2004)E-invoicing means no more paper, no more manual handling, no more manual data input, no more file cabinets, better tax controls, and simpler administrative requirements for the tax payer E-invoicing – why the UN cares E-invoicing can deliver significant savings, facilitate international trade and foster development by reducing the weight of the grey economy
EDI is deployed slowly, on a “one-to-one” basis*,… * Source: Aberdeen Group, June 2004 - The Invoice Reconciliation and Payment Benchmark Report.
…companies still receive most invoices by mail*… * Source: Aberdeen Group, June 2004 - The Invoice Reconciliation and Payment Benchmark Report.
…and input, route and approve them manually* * Source: Aberdeen Group, June 2004 - The Invoice Reconciliation and Payment Benchmark Report.
Electronic invoicing can improve data visibility,…* * Source: Aberdeen Group, June 2004 - The Invoice Reconciliation and Payment Benchmark Report.
…automate invoice handling… • Invoice header: • eliminate duplicate payments • Line items: • automate routing and reconciliation • Amount due: • manage cash flow effectively
…and bring other benefits* * Source: Aberdeen Group, June 2004 - The Invoice Reconciliation and Payment Benchmark Report.
Enforced in Member States by 1/1/2004Harmonizes the format of the invoice: “invoice” is a document with “invoice” written on top that contains the nine data elements (buyer, seller, invoice number, VAT number,…) required by the lawMember States may not require paper invoices to be signedElectronic (i.e. paperless) invoicing is allowed provided the invoice is transmitted in EDI or is accompanied by an electronic signatureAn “advanced electronic signature” is required to guarantee “authenticity of origin and integrity of contents”Member States may further require it to be “based on a qualified certificate and created with a secure-signature-creation device” The EU 115/2001 Directive on e-invoicing The electronic signature is a “seal” to prevent fiscal fraud
EDI standard is expensive and difficult to use for SMEs. It is “100% electronic” and does not allow gradual implementation There is no accepted XML invoice standard: XML is an “alphabet”, not a “language” XML “words” (the so-called “tags”) don’t have a predefined semantic meaning Small suppliers that emit just a handful of invoices per day need simple software to generate invoices in electronic format Manually attaching electronic signatures one document at a time is very unpractical for companies that emit many invoices The current obstacles Despite the savings, e-invoicing roll-out is slow due to lack of standards and a reluctance of SMEs to invest in complex systems
The United Nations promotes trade for its potential to foster economic development and eradicate povertyUNECE develops, maintains and leads the implementation of trade-related recommendations, standards and toolsThis activity is carried out through UN/CEFACT (the United Nations Centre for Trade Facilitation and Electronic Business) which is open to the participation of businesses and governmentsUN/EDIFACT and the UN Layout Key/ISO 6422 (on which the EU Single Administrative Document, and the IATA airway bill are based) are standards for international trade developed by UNECE Electronic business standards – why the UN cares UNECE’s involvement assures that the standard will be open and technology neutral, and will cater to the needs of large and small companies, of developed and developing countries alike
Agenda Electronic invoicing The UNeDocs solutionElectronic signaturesAnnex - UNeDocs documentation
Designed with the objective of letting SMEs participate in advanced supply chainsBuilt upon the UN Layout Key Based on UNTDED/ISO7372 (United Nations Trade Data Elements Directory) and UN/CEFACT core componentsUNeDocs documents incorporate UN/CEFACT trade facilitation recommendations and best business practicesKey documents for trade (invoice, custom declaration, shipping instruction, forwarding instruction,…) already implemented The UNeDocs solution A simple and low cost approach to the exchange of document-based data
UNeDocs documents can be opened with any Internet browserUNeDocs documents can be generated in paper, PDF or XML format using Adobe Reader UNeDocs document templates can be personalized [and UNeDocs documents can be generated] using Microsoft Office Infopath, Adobe products or open source XML editorsElectronic signatures can be attached to UNeDocs documents Companies that generate significant volumes of invoices using software applications, can install software interfaces to generate the documents in UNeDocs XML format UNeDocs – the basics UNeDocs is an open and technology-neutral solution
UNeDocs is a powerful migration tool from a paper to a paper-less environment, with the option of “falling back” to paper at any timeUNeDocs simplifies the compatibility issues associated with electronic data interchange, by associating a standard XML code to each type of documentUNeDocs can be easily implemented by SMEs and large companies alike Core advantages of UNeDocs Designed for implementation
The UNeDocs invoice document is designed for international trade To be used in the EU, it must incorporate three data elements required by the 115/2001 Directive The standard will thereafter be maintained through an international process linked to ISO that ensures that industry-specific requirements are inserted without risk of duplication Using UNeDocs UNeDocs is already fully functional, with a short “time to market”
Data element Already in UNeDocs Data elements required by EU 115/2001 1. Invoice date of issue 2. Invoice number3. Suppliers' VAT number4. Suppliers' and customer's full name and address 5. Description of the quantity and nature of goods supplied or services rendered 6. Date of completion of the supply of goods or rendering of services 7. Break-down of VAT amount payable, unit price of the goods or services exclusive of VAT, discounts or rebates unless included in the unit price8.VAT rate applied9. VAT amount payable üüüüümust be addedmust be addedmust be addedü The UNeDocs invoice document is already close to EU requirements
The EU has appointed a work group in CEN (European Committee for Standardization) to develop the electronic invoice standard The CEN work group refers to UN/CEFACT core components as essential elements of its task, and key figures of CEN are members of UN/CEFACT An universal object as the invoice must be standardized at a global level The invoice standard must be consistent with UMM (UN/CEFACT Modeling Methodology), that will enable companies to exchange data throughout the entire supply chain cycle Making UNeDocs an international standard ISO and UN/CEFACT intend to set-up a work group to develop UNeDocs into an international standard
EDI standard is expensive and difficult to use for SMEs. It is “100% electronic” and does not allow gradual implementation There is no accepted XML invoice standard: XML is an “alphabet”, not a “language” XML “words” (the so-called “tags”) don’t have a predefined semantic meaning Small suppliers that emit just a handful of invoices per day need simple software to generate invoices in electronic format Manually attaching electronic signatures one document at a time is very unpractical for companies that emit many invoices ü Problems addressed by UNeDocs ü ü
Agenda Electronic invoicing The UNeDocs solutionElectronic signaturesAnnex - UNeDocs documentation
Cross-border applications must meet the most stringent EU requirements (“advanced electronic signature based on a qualified certificate”)Electronic signatures – though not “new” – are still rarely used (“hardly anyone actually uses them”, The Economist, 18 September 2004), especially in “high volume” applicationsThe market offers software and hardware solutions that directly interface with the invoice-generation application and automatically attach the electronic signature to each document The problem with electronic signatures Legal, business and technology issues must be understood and properly addressed
Establishes a legal framework to facilitate the use of electronic signatures, and contribute to their legal recognition: - An “electronic signature” is data in electronic form, associated with other electronic data and used as a method of authentication - An “advanced electronic signature” guarantees the authenticity and the integrity of contents of the document, not sender’s identity - A “qualified certificate” is provided by a “certification-service- provider” and guarantees the identity of the sender - “Certification-service-providers” and “secure-signature-creation- devices” must fulfil pre-defined requirements. Member States cannot subject the provision of certification services to prior authorizationDefines the rules for mutual recognition of non-EU certificates The EU 93/1999 Directive
Public keys are stored in public databases anyone can introduce a public key claiming they are someone else Digital certificates can be compared to passports a traveller arriving at a foreign country is authenticated by trusting the passport issuer (the Certification Authority)Certification Authorities are third-party entities that issue certificates to ensure the authenticity of the signer Why certificates? In trusted, secure environments, where the parties already know each other, organizations can host a PKI certificate authority within their own infrastructure
Agenda Electronic invoicing The UNeDocs solutionElectronic signaturesAnnex - UNeDocs documentation
