Table of Content - I

1. Electronic Invoicing in DenmarkDonostia-San SebastianApril 12, 2005Thomas Mærsk Pedersen, Special adviser,Agency for Governmental Management

2. Table of Content - I • The Initiative and Its Background • The Content of the Act (L1203) • Electronic Invoicing • Electronic Invoicing – Some Key Data • Which Work Processes are infected by Electronic Invoicing? • The Impact on the Public and Private Sector • Paper vs. Digital?

3. Table of Content - II • What is ”Read In-Bureaus”? • The Technical Concept • The Course of the Project • The Content of the Project and its Focus Areas • Status as of Mid-April • Lessons Learned

4. Act L1203 The Initiative and Its Background Efficient duty managing in the public sector Navision Stat (Acc. System) Digitalizing work processes Public Payments Cost-based accounting

5. The Content of the Act (L1203) • Easy Account • Citizens and companies receiving public payment must register an account to which payments must be made (account-to-account payments) • Closing public cash tills • Due to elimination of cash payment the public cash tills will be closed • Electronic invoicing • All bills must be digital when arriving to or send from the public authority

6. Parties of Interest Counties Municipalities Ven-dors Gov. Inst.

7. Electronic Invoicing What is meant with the term “The Public”? • Governmental institutions = 19 Ministries plus sub institutions • Counties = 14 plus sub institutions • Municipalities = 271 plus sub institutions • The Public receives app. 90 mil. bills every year • Expected benefit: 60 mil. € yearly due to savings in transaction costs

8. Electronic Invoicing – Some Key Data • The Act was passed December 27, 2003 • The Departmental Orders were in hearings during the summer of 2004 • The Departmental Orders were published October-November 2004 • Go Live February 1, 2005

9. Requi- sition Appro- val Orde- ring Deli- very Invoi- cing Pay- ment Electronic Invoicing/ Easy Account Electronic Procurement & Financial Systems Which Work Processes are affected by Electronic Invoicing? Connected processes for purchasing, invoicing and payment

10. The Impact on the Public and Private Sector • Each public institution must be connected to a standardized Network through which the vendors can reach the institution (VANS) • Other Network can be used if both parties agree • Each public institution must be able to receive and read at least one electronic format (OIOXML) • Other formats can be used if both parties agree • The invoices must be electronic at arrival • For private vendors: no demand that the invoices are electronic at the time of sending • Public vendors invoicing: • other public customers: the invoice must be electronic • private customers and companies: the invoices can be electronic if wished so

11. Paper vs. digital? • The bills can be electronic from mailing to receiving • Companies unable to generate electronic invoices can use two central scanning bureaus (”Read In-Bureau”). • It is free of charge to use the two central bureaus for SMV’s

12. What is ”Read In-Bureaus”? • Receives paper bills and transforms them into electronic format (OIOXML) • The bureaus must be certified and meet certain demands regarding e.g. security as defined in relevant acts • The bureaus have 5 working days the handle and deliver the invoices • The vendor pays for using the Read In-Bureau • The use of Read In-bureau is free for SMV’s

13. The Course of the Project • The legal work was based in the Ministry of Finance • The practical/operational work was based in the Agency for Governmental Management • In average 15 people took part in the project • The project was initiated in the Agency for Governmental Management Mid-April 2004 and finished by the end of February 2005

14. The Content of the Project and its Focus Areas • Development of an integration component for the governmental finansial systems • Founding and development of the technical infrastructure (VANS, EAN, OIOXML) • Participation in legal tasks • Making the departmental Orders • Support for public institutions and private citizens and companies • Infoline (telephone support) • Electronic mail box • Information campaigns • Seminars • Courses • Working groups (trade associations, Local Government Denmark and others) • Newsletters • Other publications

15. Status as of April 2005 • February: 480.000 invoices, • March: 1.100.000 invoices (of which 30% where from the bureaus) • Most public institutions are able to receive electronic invoices • All vendors send invoices either fully digital or through Read In-bureau • The press has not been as critical as expected • The technical concept is working, BUT the implementation of new processes will take a long time…

16. Lessons Learned • The project involves almost the whole country • The project is an infrastructure project • The keyword is “information” to all parties of interests • The process of information should have been initiated earlier in the project • Very narrow time schedule (only 3 months from legal framework in place to go-live) • Electronic invoicing is “only” one step on the road to make the public sector more efficient • Very important to be proactive towards the press

17. Questions?