Tag Archives: Electronic Invoice Presentment and Payment

EU Sets SEPA Deadline for February 2014

SEPA. The 32 member states of the Single Euro Payments Area and two non-members

The 32 member states of the Single Euro Payments Area and two non-members. Source: Wikipedia

In a busy week for The European Union’s law makers, an agreement has finally been put in place to increase the ease with which businesses and consumers can make and receive bank payments across member states. The Single European Payments Area (SEPA) legislation has been agreed and will come into force on February 1st 2014, forcing banks to be more transparent about international payments and eliminate hidden charges.

The changes brought about by SEPA are intended to save around €123 billion in bank charges over six years through cuts in transaction fees billed to businesses within the EU. The major benefit of SEPA however will be the reduction in the number of bank accounts required for a business to trade effectively with the Eurozone to just one.

SEPA will allow companies or individuals to maintain a single bank account in any European country of their choice and make Euro transactions to any other account, anywhere in Europe. Individuals working ‘abroad’ will also benefit as they will no longer be required to open a new bank account in the host country; payments can still be made to their bank at home minimising the problems associated with setting up a new account in a foreign country.

MEPs are also expecting the efficiencies created by SEPA to encourage further use of electronic invoicing across member states. The bulk of the estimated €123 billion in savings is predicted to come from the ease of making and receiving electronic payments coupled with e-invoicing. This will create a more efficient, inter-operable framework.

Technically SEPA has been in force since January 2008, but a low take up has forced legislators’ hands. This latest decision by MEPs ensures that the February 2014 deadline is legally binding.



Global Financial Crisis – The Basis for e-Invoicing Success?

Success, Profit, BusinessAs any business owner knows, particularly those in the SME market, securing credit from a bank is nigh on impossible at the moment. Concerns about capitalisation and liquidity are causing banks to keep hold of cash, making loans to businesses extremely difficult, if not impossible, to obtain. As a result wider economic growth is stalled as businesses cannot afford to invest in order to expand. Consequently, companies are being forced to identify efficiencies and costs savings which can potentially free up cash for re-investment, undertaking detailed analysis of financial routines in way that during the “good times” may have been neglected.

These internal reviews are forcing businesses to look ever harder at their own cash flow and the way it is managed. Many have already discovered that the process streamlining available through e-Invoicing has significant benefits, particularly when extended to the wider financial supply chain. The automation of various accounting functions reduces workload whilst maintaining the controls required for low-level financial analysis.

The European Union’s continued promotion of e-Invoicing coupled with similar requirements of many national governments are steadily moving businesses towards electronic invoice presentation and payment anyway, but the global financial instability could be accelerating uptake too. The political drive to increase e-Invoicing should see the concept reach critical mass with SMEs in the next few years and as uptake climbs, so too should use of these platforms in the B2B markets as well as the B2G.

So at a time where literally every penny counts, business decision makers should be following the lead set by the European Union and investigating the potential benefits and savings available through business process automation and outsourcing. e-Invoicing could be one of the ways to ensure business survival and growth despite the apparent obstructions put up banks.

EU Digital Agenda Roadshow Reaches Dublin and London

Digital Agenda for Europe logoFollowing the success of similar events last year, the EU Digital Agenda for Europe agency are organising a follow-up regional “tour” inviting localised stakeholders to discuss the creation of a true European Digital Single Market. Ministers from both the Irish and British governments as well as EU representatives will participate in a number of sessions to explore the potential solutions to the challenges that this presents.

Despite there being an unfortunate bias towards “digital content creators” on the agenda, certain challenges face any business looking to do business across international borders, from cultural differences to the need for integrated IT supply chain management and invoicing systems. Given this, several question and answer sessions are scheduled, along with opportunities to network with key EU Commissioners and Directors of Policy allowing conference delegates to learn from the experiences of their counterparts in other European countries.

During the morning open discussion and lunchtime sessions, the different approaches to e-Procurement and e-Invoicing used across Europe will also be debated as UK businesses seek to understand the implications of trading electronically with other government bodies and businesses on the continent. Standardisation of systems and platforms will also become essential as the single market concept develops.

The use of hosted services that transcend physical borders and language differences for electronic invoice presentment and payment will also be of keen interest to businesses seeking to expand their European operations. Platforms and services which are locale agnostic and can accept input from any finance system will be essential to the development of a true cross-border, pan-European marketplace.

The Digital Agenda for Europe agency intend to run further local sessions in Cardiff, Manchester, Edinburgh, Bristol and Birmingham, although there has not yet been any official date announced.

Questions and comment from UK and Irish stakeholders are also being sought via Twitter for presentation during each of the events. More details are available at http://ec.europa.eu/information_society/events/cf/daelocal/item-display.cfm?id=6999

Electronic Invoicing and the Brazilian Problem

The Brazilian Government logoThe potential problem of electronic invoicing is perhaps best exemplified by Brazil, reputed to have the strictest e-invoicing regulations in the world. The Brazilian government has the final say on any purchase and delivery – if the paperwork is not in place, no project goes ahead.

Implemented at the beginning of this year, the Nota Fiscal Electronica (NF-e) regulations require electronic bills of lading to be received and approved by the Brazilian Ministry of Finance before goods can be moved, let alone delivered. As soon as approval is granted, an NF-e file is sent to the manufacturer by return. The final recipient of the shipment also receives an email copy of the file.

A printed copy of the NF-e file must also be sent along with the shipment so that Police and customs officials can scan the associated barcode. The government can verify the paperwork associated with a shipment at any point between despatch and final delivery using the electronic audit trail. Delivery vehicles can even be stopped by Police en route, and then scanned using mobile devices. Non-compliance is quickly identifiable and consequently ill-advised.

Although this system provides a number of efficiencies for the Brazilian government, it also causes headaches for businesses looking to trade in Brazil but who do not have a suitable method of interfacing with the NF-e compliant system. Small businesses particularly are believed to struggle in this way.

It is however becoming clear to businesses based in South America that the optimal way to interact with the complex NF-e system is to outsource the lion’s share of the data processing and interfacing to a third party. Using a cloud based electronic invoice presentation and payment (EIPP) gateway such as Celtrino’s Smart Admin system, businesses need only worry about manufacture and delivery of goods; a proper EIPP service will ensure full compliance with the local e-invoicing legislation, regardless of how complex the rules may be.

EXPP 2011 Observations

Taking place in Barcelona this year, the EXPP Summit drew speakers from across the world to discuss the impact electronic invoice presentation and payment (EIPP) was having on their respective countries. Along with the usual discussions about that status of the market and current trends within EIPP, several in-depth case studies of successful deployments were presented to conference delegates.EXPP Summit logo

Examples given of e-invoicing deployments within South and Central America focused on the need to reduce tax fraud, which has been rampant under previous transactional regimes. Changes in legislation in some countries has seen market uptake reach 90%, whilst all of the nations implementing EIPP have recorded a rapidly growing uptake of the service. Providers of outsourced EIPP services in Latin America have recorded exponential growth and many established European businesses are now trying to penetrate the market.

When the focus was shifted to European EIPP uptake, success was driven by the need to increase business competitiveness, rather than reduce tax fraud. The ability to adapt business transaction methods quickly and to increase efficiency were identified as the driving forces behind e–invoicing deployments. Unlike Latin America, where  the government forces  businesses to interact electronically, European decision makers must be convinced of the cost benefits of EIPP before they will commit to using the technology available.

Unlike Latin America, where many countries have chosen to legislate to enforce e-invoicing, the European Union continues to accord paper and electronic invoices equal status, slowing the uptake of EIPP. However, it was pointed out that many EIPP service providers had misunderstood the EU’s directive which suggests that electronic invoices should be audited in exactly the same way as paper invoices.

And despite the high uptake of e-invoicing in Latin America, businesses are only engaging this way for tax purposes. EIPP has not led to greater supply chain integration as could be expected. Clearly EIPP providers still have some work to do to show companies in the region the benefits of integrating systems for greater efficiency and cost  savings.

Supply Chain Integration Part 4 – Best Practice

Best Practice written on a white boardThe recognition that supply chain integration with your suppliers and partners is of paramount importance is the first step in a sometimes challenging and complex process. Each member of a supply chain has their own way of doing things, using a variety of different systems which at first glance are probably not fully interoperable.

Despite being a “standard” Electronic Data Interchange, or EDI as it is known for short, there are many minute variations and tweaks required in order for one computer system to “talk” to another. As a result, reconfiguration will have to take place at each supplier to allow for smooth communications. EDI setup and maintenance is an expert job and being time intensive, is also costly. As a result the use of an outsourced service which does the required EDI translations automatically is preferable.

The use of an externally hosted Electronic Invoice Presentment and Payment (EIPP) system allows every member of the supply chain to integrate their payment systems for maximum compatibility, whilst retaining complete autonomy over their own data and in house processes. During the supply chain integration process, companies can choose to enable as much or as little interchange as they desire. Obviously the more interchange permitted, the greater the on-going cost savings through a reduction in labour costs that would be accrued through manual processing of the same actions.

Clearly the complexities of such an integration is outside the experience (or interest) of most businesses and so they will need to secure the services of a specialist consultancy. Here are three suggestions to help when choosing:

  1. A proven track record in successful completion of supply chain integration. Any company you consider should have verifiable testimonials from previous customers and reference sites which can be visited for first-hand verification.
  2. Experience in trading community onboarding. Integration projects deal not only with system interoperability, but also the political issues raised by bringing together businesses with differing values and ethics.
  3. The ability to make integration as simple as possible with the minimum of disruption for any member of the supply chain.

In the light of these suggestions, expertise in supply chain integration is just one facet of the decision process. The technology and methodology used is just as important with on and off site implementations of supply chain integration. Clearly Business Process Outsourcing (BPO) options which see the EDI services hosted externally are preferable in terms of scalability, speed of deployment and minimisation of disruption – all data interchange is performed externally with minimal local reconfiguration required.


Supply Chain Integration Part 1

Supply Chain Integration Part 2

Supply Chain Integration Part 3

Supply Chain Integration Part 5

PO Flip – What is it?

As with any new concept, eProcurement has brought with it a number of new terms and phrases to describe certain functions within the process. One of the strangest phrases entering into the vocabulary of procurement and accounting professions is the “PO Flip”.

At the most basic level, a PO Flip is the conversion of a Purchase Order into an Invoice using the tools available in eProcurement or Electronic Invoice Presentment and Payment (EIPP) platforms, such as Celtrino’s own Smart Admin system. An eProcurement platform allows customers to submit their purchase orders electronically directly into the supplier’s accounting system. Using the automated tools available, the supplier can then automatically “flip” the purchase order into an electronic invoice for immediate return to the customer.

Card Flipping

PO Flips have become massively popular with suppliers to the public sector as local councils and even central government carry out more procurement via online platforms which provide the function as standard. Both supplier and buyer then benefit from the reduced time spent on administration of the purchase.

Upon receipt of an electronic invoice (also known as an eInvoice), the buyer can approve the purchase and authorise a BACS payment at the click of a mouse button. By automating the purchasing process, buyers and suppliers reduce the margin for human error and unforeseen delays associated with posting invoices, cheques and remittance advice.

Reduction of time expenditure in accounts administration has the added benefit of freeing up finance staff to focus on other areas of their roles. If the resource requirements continue to be reduced through further implementation of eProcurement and the outsourcing of associated systems, significant costs savings can also be recognised through a reduction in headcount.

The PO Flip is but one of many time-saving devices available to users of outsourced EIPP gateways such as Smart Admin from Celtrino. To find out more how your business could benefit from outsourced EIPP, please visit www.celtrino.ie