einvoice in finland heli salmi, m. sc. (econ) coordinator, expert services heli.salmi@elma.net
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eInvoice in Finland
Heli Salmi, M. Sc. (Econ)
Coordinator, Expert Services
heli.salmi@elma.net
www.elma.net
Elma Electronic Trading
• SP-operator specialized in B2B e-Commerce
– Electronic Commerce Service Provider
• Founded in 1991
– Founded by a group of 27 Finnish companies within industry and trade
• Presently
– A leading operator within e-Commerce in Nordic region and one of the top players in Europe
– On the cutting edge of product development– Rapidly growing IT-company with a strong tendency
towards internationalization
Elma’s clientele
• In excess of 150 ”TOP 500” rated Nordic companies• Trade: Arrow Nordic Components, AGA• Industry: ABB, Aspocomp, Uponor Group• Transport: Schenker BTL, Finnlines
• Public Authorities
• Thousands of SME’s mainly in Finland
• Thousands of e-commerce connections on international level
• Tens of thousands business transactions within a day’s time
What is eInvoice?
• Modern, reliable and paperless way of invoicing
• Invoice data from invoicer’s system to invoicee’s system
• Based on Internet techniques
• The invoice is visualised for electronic handling (checking and
possible approvals) processes
• Covers both B-to-B and B-to-C invoicing
Supply Chain Management vs. Procurement Invoices
Purchase OrderProcessing
Purchase Ledger
Order
Order response
Delivery
Invoice Invoice
Agreement
Electronic Billing and Payment Definition (IDC, 2001)
‘Electronic billing and payment refers to the electronic presentation of financial statements, bills, invoices and related information sent by a company to its customers or a third-party, and corresponding payment for goods or services.
The information in the bill or monthly financial statement can also be located from the biller’s own or a third-party organization Web site and thus end users will be able to view and pay the bill over the Internet.
Consolidator/Bill Service Provider. A consolidator consolidates bills from organizations and other consolidators and then delivers them to consumers, businesses or others for bill presentment. The consolidator also converts the billing data into the requested form and archives it. The consolidator can deliver data to different authorities such as tax authorities as well.’
Table 3Finnish Bills Forecast, 2000-2005 (Million)
Finland 2000 2001 2002 2003 2004 2005 2000-2005
CAGR
Paper-based bills 300 301 285 272 243 211 -7%
B2C 180 180 171 167 155 142 -5%
B2B 120 121 115 105 88 70 -10%
Electronic bills 4.3 26 45 79 117
B2C 1.8 13 19 32 47
B2B 2.5 13 26 47 70
E-bills Share 1.4% 8.2% 14.1% 24.5% 35.6%
B2C 1.0% 7.0% 10.0% 17.0% 25.0%
B2B 2.0% 10.0% 20.0% 35.0% 50.0%
Total 300 305 311 317 322 328 2 %
B2C 180 181.8 184 185 187 189 1%
B2B 120 123.6 127 131 135 139 3%
Key Assumptions:· The figures in the table show bills volume and electronic bills share.· EDI-based bills are excluded from the table. IDC estimates that the EDI-based bill volume was
about 100 million in Finland in 2000.· Total bill volume growth will continue at approximately 2% per year.· The shares are based on the assumption that the EC’s proposal for an e-invoicing Directive will not
happen as planned (do not require electronic signature).Messages in the Data:· The Finnish market is the most advanced because many different e-billing systems for small
companies, which can be used with a Web browser, are already available. In Finland a group ofcompanies (the Nordic e-invoicing consortium) have already agreed on the principles of e-billingand payment.
· IDC estimates that the Finnish B2B e-billing market will achieve 20% penetration by 2003 and thenthe domino effect will kick in.
Source: IDC, 2001
Electronic Invoicing in Finland
• Long EFT (Electronic Funds Transfer) history
-> 99% of payments in B-to-B are electronic
• Advanced NetBanking solutions, over 2 million users in Internet
banks
• EDI (Electronic Data Interchange) over 15 years (with national
standards over 30 years)
• New techniques - XML (eXtensible Markup Language)
Other prerequisites
• Modern legislation
’The information on a voucher can be used in accounting in a
way that only the link information (e.g. the server) of the storage
is sent to the accounts of the company. The link can be used in
collecting the image and the data of the voucher.’ Accounting
Advisory Board, Ministry of Trade and Industry, General quides
on methods in electronic acconting (Translation HS).
• Rationalisation requirements also in accounting
• Importance of customer service
• Image factors, a modern company uses modern systems in
invoicing
WHY eInvoice?
• There are around 120 B2B invoices and 180 million B2C
invoices in Finland
• Part of invoices are electronic, EDIFACT
• Cost of handling one invoice - both the issuer’s and recipient’s
cost 16 EUR
• Cost savings around 80%
Elma
Invoicing channels
Invoicing company
Elma eCom Connection Data format
conversions and channeling
1) ElmaEDI
2) Elma eInvoice
3) ElmaInvoice
b) Cooperation partners• Proha • ProCountor.Com• Novo
c) Bank batch transfer connections
• Sampo• Nordea• OKO Bank
d) Net banks • Sampo• Nordea• OKO Bank
Printing services • Capella• Atkos• Novo
Direct connections
Data repositoryMedium-sized businesses
Invoice recipients
Small businesses and consumers
Partners’ clients
Large businesses
Elma eCom Connection
Large businesses
a) Direct connections
Security is important
• The usability requirements for the system is high (like banking
services)
• Errorless, functioning well
• In cooperation with the banks the level required by the bank!
• MAC, SSL, SSH, VPN
Sender
VPN
data.einvoicedata.eInvoice-xml
data.xmldata.hmtldata.pdfdata.tiffdata.epldata.edi
data.inhouse
Bank
Internet bank
Customer
Purchase ledger
Payment transfer system
Customer
SSL, MD5
PATU (MAC)
VPN
XML, PDF
XML, HTML
TCP/IP
TCP/IP
TCP/IP
Direct payment, PDF
Printing operator
Elma
EPL
TCP/IP
eInvoice
EDI
Customer
PATU (MAC)
Council Directive 2001/115/EC
of 20 December 2001 amending Directive 77/388/EEC with a view to
simplifying, modernising and harmonising the conditions laid down
for invoicing in respect of value added tax
• Data content of an invoice
• Invoices issued pursuant to point (a) may be sent either on paper
or, subject to an acceptance by the customer, by electronic means
• Plus other regulations e.g. storage of invoices
Council Directive 2001/115/EC
Invoices sent by electronic means shall be accepted by Member States provided that the authenticity of the origin and integrity of the contents are guaranteed:
• by means of an advanced electronic signature within the meaning
of Article
• or by means of electronic data interchange (EDI) as defined in
Commission Recommendation 1994/820/EC
• Invoices may, however, be sent by other electronic means subject
to acceptance by the Member State(s) concerned.
Commission Recommendation 1994/820/EC
Article 2 Definitions
2.1. For the purpose of the Agreement, the following terms are defined as follows;
2.2. EDI Electronic data interchange is the electronic transfer, from computer to computer, of commercial and administrative data using an agreed standard to structure an EDI message.
2.3. EDI message: An EDI message consists of a set of segments, structured using an agreed standard, prepared in a computer readable format and capable of being automatically and unambiguously processed.
2.4. UN/Edifact: As defined by the UN/ECE (1), the United Nations rules for electronic data interchange … (continues)
2.5. Acknowledgement of receipt: The acknowledgement of receipt of an EDI message is the procedure by which, on receipt of the EDI message, the syntax and semantics are checked, and a corresponding acknowledgement is sent by the
receiver.
Something new in Finland
• Electronic signatures through banks (2002)
• Electronic signatures using a mobile phone (spring 2003?)
PRESS RELEASE
June 10, 2002
The State Treasury and Elma Pilot Electronic Invoicing
The Finnish State goes over to electronic invoicing
The State’s 118 offices, ministries, research institutes and
universities are transferring to electronic invoicing. Some 20
organisations are already launching development projects for
this in 2002. Finland is the first European country to progress
this far with electronic State financial administration.
Attachments….
• Improving the invoice data -> no attachments
• Including the attachments in the invoice
• Some special cases where a paper invoice is required -> printout of
the invoice
Other transactions
• Reminders/Collecting - traditional ways, no integration needed
• Late payment interest invoice - like any other invoice
• Information/Marketing(?) - links from the invoice to:
– agreements
– customer service
– new products
– statistics
– graphics
Advantages to the invoice issuer
• Outsourcing of invoicing (sending)
• All channels available, only one connection needed
• Value added services from the invoice data
• Electronic archives
• Customer service
• A modern way of doing things
Advantages to the recipient
• No manual typing
=> cost savings, no errors
• Automated bookings for general ledger
• Invoices in the repository
=> no lost papers, invoice can look on the screen just
alike a paper invoice
• Automated controls/services
=> value added services from invoice data
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