un electronic invoicing initiative update geneva april 2005 n.
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UN electronic invoicing initiative update Geneva, April 2005 PowerPoint Presentation
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UN electronic invoicing initiative update Geneva, April 2005

UN electronic invoicing initiative update Geneva, April 2005

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UN electronic invoicing initiative update Geneva, April 2005

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  1. UN electronic invoicing initiative updateGeneva, April 2005

  2. 25 billion invoices/year (B2B + B2C, US + Europe)25 € cost/invoice (seller + buyer, B2B) 20 € [potential] saving/invoice ( automatic routing and reconciliation)“Social” advantages of e-invoicing: - less “grey” economy - less tax evasion - better corporate governance - more transparency - less corruption Advantages of electronic invoicing

  3. Banks More efficient payment processing, possibility of offering new services to customersERP vendors New business opportunities to “upgrade” companies (especially SMEs) that have accounting systems that are not “e-invoicing” enabledConsulting companies Process reengineering can be required, especially on the buyer side, to make potential gains of e-invoicing “real”Solution providers electronic signature/sealing solutions, presentment and payment portals, archiving solutions, format conversion, outsourcing of invoice print and delivery (for customers who “do not want” the e-invoice),… Other “winners” of e-invoicing

  4. 95% of invoices are paper, the rest is EDI (little XML)Slow growth (Gartner estimates that Electronic Invoice Presentment & Payment market might [i.e. 0,6 probability] grow to 500 million USD by 2010[!])Some “success cases” (Finland, 28% penetration):main characteristic  very easy for sellersMany solution providers, some (according to Gartner) on “shaky financial ground”. Lots of interest from users and tax administrations Present situation (USA and Europe) It is [still] not happening

  5. Most (about 18 €) of the savings go to the buyer, who can reconciliate the invoice much more efficientlyFor the buyer, processing e-invoices is rather straightforward, provided he has a “good” ERP The seller can save about 2 € per invoice (stamps, envelops, archiving costs,…) For the seller, migrating to electronic invoicingmeans going through a number of hassles and costsUntil the seller has achieved 12-15% customer adoption e-invoicing ROI is negative Is it all about asymmetry?

  6. Yes, if the buyer represents a large part of the seller’s business (ex. automotive sector)EDI’s adoption model is based on “forcing the sellers”, and had little success in “cross-industry” scenariosFor the buyer, e-invoicing makes little ROI sense if many suppliers do not sign in“Gentle pressure” is OK, but sellers must believe it will happen Can buyers “force” sellers?

  7. Projects to achieve critical mass in “high visibility” scenarios/markets (after, it will grow by itself…)Lower the barriers for the seller (make it as easy and an inexpensive as possible)Convince sellers that e-invoicing will happen in the near future (if the seller is sure that more that 15% will require/accept e-invoices he is also sure he will save money with e-invoicing)  build awareness  get commitment from key stakeholders create “self-fulfilling prophecy” Key levers

  8. Lack of an accepted invoice data content standardLack of an accepted XML standardLack of regulatory harmonization[Too] stringent legal requirements (ex. electronic signature)? “Interoperability” obstacles Why isn’t happening in countries where there are less stringent legal requirements and where legal harmonization issues are less relevant (example USA)?

  9. Formal (and relatively time consuming) approval process required to guarantee neutrality UN “backing” can create powerful consensus even before the recommendation is officially approved“Legal” recommendations can be a powerful tool to influence tax administrations, but cannot be enforcedXML standards must be implemented into software products. Then, client installations must be upgraded UN standards & recommendations Very important tool, but have a certain “time to market” and - per se - do not solve the “asymmetry issue”

  10. Data content for reconciliation and bank processingVAT/sales tax data content requirementsElectronic signature and ”sealing” requirementsWork group members: IATA, EU DG Enterprise, SAP, CEN, swissDIGIN initiative, Italian Banking Association, PricewaterhouseCoopers, ADLittle, LEDES Legal Standards Group, AdsML Media Standards Group, FINinvoice, EU IDABC programme, UK Tax & Excise, Microsoft, ENI, OB10, Utimaco,…Draft ready in June 2005 UN revision of Recommendation 6 project

  11. A UN-backed global XML standard for digital trade documentsCovers ”common” (i.e. non industry-specific) core of data elements (example “buyer, seller, VAT,…)Industry-specific data elements will be defined by industry bodiesConsistent with UN and ISO standards (ebXML, Core Components,…)“Version 0” can already be implemented (example IATA travel agent e-invoicing project) UNeDocs electronic documents project

  12. Third party web services “solve” [most of] the issues tied to lack of standards and of legal harmonizationThey provide invoice format translation, invoice signing/sealing, invoice archiving, assurance of respect of national VAT requirementThey vastly reduce the e-invoice hassle for the sellerWidespread use of these services would somehow “simulate” the implementation of UN standards Bridging the gap E-invoicing will happen sooner if sellers embrace the use of third party services, which still have a limited market

  13. UN’s objective is to make e-invoicing happenUN standards and recommendations provide a path to interoperability between industry-specific XML standards, and represent a solution for smaller ERP vendors to provide e-document functionalityUN provides an “umbrella” to foster consensus among key players interested in e-invoicing happenThe Recommendation 6 work group has attracted interest as a way to coordinate efforts between “national” invoicing forums UN “backing” can give visibility and “universal value” to industry-specific implementation projects UN’s role