1 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 INSIGHTS IN THE WORLDWIDE E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET FEATURES TOP INDUSTRY PLAYERS WORLDWIDE Extensive global distribution via worldwide industry events With the release of the E-invoicing, Supply Chain Finance and E-billing Market Guide 2013, The Paypers produced an extensive overview that helps the reader to understand this fragmented and dynamic market. The overview of providers is without doubt the most complete overview in the market, and the guide also provides valuable market insights from industry experts. A must read for professionals in e-invoicing, supply chain finance and e-billing. Jaap Jan Nienhuis, Senior Consultant, Innopay
3 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 INSIGHTS IN THE WORLDWIDE E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET Authors Ionela Barbuta Sabina Dobrean Mihaela Mihaila Adriana Screpnic Mirela Amariei Simona Cristea RELEASE VERSION 1.0 SEPTEMBER 2013 COPYRIGHT THE PAYPERS BV ALL RIGHTS RESERVED
4 2 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 INTRODUCTION Introduction You are reading the E-invoicing, Supply Chain Finance and E-billing Market Guide 2013, a state-of-the-art overview of the global e-invoicing, e-billing, e-procurement and financial supply chain management ecosystem - related information at global level. This guide is published once a year by The Paypers, the leading independent source of news and analyses for professionals in the payment industry. The 2013 edition of the E-invoicing, Supply Chain Finance and E-billing Market Guide continues and expands the scope of the E-invoicing Market Guide, by putting together a collection of in-depth analyses and encompassing the hottest topics currently being debated throughout the global e-invoicing, supply chain finance and e-billing industry. The 2013 Guide is designed to serve as the most complete and up-to date reference source available on the market for players in these industries and beyond. It features insights from industry stakeholders and associations, expert views, customer cases and exposés from thought leaders and detailed company profiles of the suppliers. Although it has not yet reached the tipping point where it becomes the norm, eliminating paper-based invoice data exchanges, the global e-invoicing ecosystem is slowly evolving and companies come to realise that e-invoicing as such is not the whole story, but rather a part of it which leads to full automation of a series of interconnected business processes. One thing is clear: an e-invoicing paradigm shift is happening, and this focuses on the development of new business models which encompass the whole of the collaborative financial supply chain. It appears that the dawn for isolated ecosystems with no scalability is here. The 2013 edition of the E-invoicing, Supply Chain Finance & E-billing Market Guide features an enhanced structure compared to last year s edition. This new structure reflects the industry feedback received for the 2012 Guide and as well as a desire to best serve the needs of the industry by highlighting more particular aspects of the market such as emerging trends, directions for development, existing challenges and the best strategies to address them. Apart from the enhanced structure in terms of design, this year s edition of the Guide also encompasses voices from all across the e-invoicing, supply chain finance and e-billing industry, providing an elaborate and up-to-date overview of the entire ecosystem and its main players. The 2013 Guide pays particular attention to the key trends and topics that define the e-invoicing, e-billing and supply chain finance markets in 2013 at global, regional and local level. Among them are overcoming fragmentation & lack of interoperability on the e-invoicing market, B2B integration and the network effect between trading partners, international trade finance, the integration of e-invoicing networks with transaction-based SCF platforms, the optimization of the financial supply chain, webbased EIPP and the growth of mobile billing. Moreover, the E-invoicing, Supply Chain Finance & E-billing Market Guide 2013 features insights from a wide variety of players in the e-invoicing, supply chain finance and e-billing market, including top services providers, consultants, industry associations, corporates and the voice of small enterprises. The 2013 edition of the Guide features a three-part structure, with Part 1 dedicated to insights from industry stakeholders and associations. In Part 1, Robert Unger, Senior Director ebilling & Payments at NACHA discusses XML via the Automated Clearing House Network, while further on Bartosz Dworak, Policy Officer in the Directorate-General for Internal Market and Services at the European Commission, highlights the benefits of e-invoicing in Europe and provides information on the draft directive on e-invoicing in public procurement that the European Commission put forward in June Marcus Laube, Co-Chair e-invoice Alliance Germany (VeR), dwells upon the milestones on the way to Agenda 2020 which requires that all businesses and public bodies throughout Europe switch to electronic invoicing by the year Further on, Carmen Ciciriello, Executive Communications Officer, OpenPEPPOL and André Hoddevik, Secretary General at OpenPEPPOL, discuss the European e-procurement landscape
5 INTRODUCTION E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE and the PEPPOL initiative while Charles Bryant, Senior Adviser, EBA, focuses upon Supply Chain Finance and how e-invoicing demonstrates its potential as a game-changer for the SCF business. The E-invoicing, Supply Chain Finance & E-billing Market Guide 2013 is a great means to stay informed and keep up to date with the latest industry perspectives, trends and developments, a highly useful document that should be kept at hand at all times. Finally, this document has been put together with the utmost care. Part 2 of the E-invoicing, Supply Chain Finance & E-billing Market Guide 2013 is a section dedicated to exposing expert views, If you discover that, despite our efforts, it features information that is unclear or erroneous, we very much appreciate your feedback. opinion pieces and exposés on key aspects of the global e-invoicing, e-billing and e-finance space. It features insights from leading market players, including Ariba (We are on the Adriana Screpnic, Editor-in-Chief, The Paypers Cusp of the Next Revolution in Business Productivity with Every Process that Touches the Edge of the Enterprise Running Even Better Through a Business Network by Richard Downs, Network & Manage Cash Solution Marketing Director, EMEA), Tradeshift (The Tradeshift Platform Reinvents Workflow with a Value Driven Approach by Christian Lanng, CEO and co-founder), Dutch Harbor (Payment and Payment Terms from a Chief Procurement Officer's Perspective by Dr. Erik van Breusegem, COO & Procurement Engineer), SWIFT (Head of the Sibos Corporate Forum André Casterman explains how services designed for the corporate community are independent of their banking relationships by André Casterman, Head of Corporate and Supply Chain Market), Consorzio CBI (Electronic Invoice and CBILL: CBI Services for a New Public Administration Are Friendlier to Businesses & Citizens by Liliana Fratini Passi, General Manager), Aite Group (E-invoicing: Regulatory-Driven, but Beneficial Regardless, by Nancy Atkinson, Senior Analyst), Purchasing Insight (3-Point Plan to Encourage E-Invoicing to Public Sector by Pete Loughlin, Managing Editor). Part 3 of the E-invoicing, Supply Chain Finance & E-billing Market Guide 2013 presents in-depth company profiles mapping out key players in the global e-invoicing, e-billing and e-finance services space. Also, an enhanced online company profiles database with advanced search functionality complements the PDF version of the Guide, allowing readers unprecedented access to and visibility into the global e-invoicing, supply chain finance and e-billing market.
6 4 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 TABLE OF CONTENTS Table of contents 2 Introduction 5 VOICE OF THE INDUSTRY SECTION 6 NACHA XML via the Automated Clearing House Network: Creating Standards, Driving Efficiencies and Advancing B2B Payment Remittance Processes 8 Exclusive Interview with Bartosz Dworak Policy Officer in the Directorate-General for Internal Market and Services, European Commission 10 VeR & EESPA Milestones on Our Way to Agenda 2020 Interoperability and Common Standards are just the Beginning 12 PEPPOL Exchanging business documents will become trivial, leading to further innovation in e-procurement; similar to how applets have changed the way we use smartphones 14 EBA Supply Chain Finance Comes of Age 17 THOUGHT LEADERSHIP SECTION 18 Ariba We are on the Cusp of the Next Revolution in Business Productivity with Every Process that Touches the Edge of the Enterprise Running Even Better through a Business Network 20 Tradeshift The Tradeshift Platform Reinvents Workflow with a Value Driven Approach 22 Dutch Harbor Payment and Payment Terms from a Chief Procurement Officer's Perspective 26 SWIFT Ahead of the Sibos Corporate Forum André Casterman explains how services designed for the corporate community are independent of their banking relationships 28 Consorzio CBI Electronic Invoice and CBILL: CBI Services for a New Public Administration Are Friendlier to Businesses & Citizens 32 Aite Group E-invoicing: Regulatory-Driven, but Beneficial Regardless 34 Purchasing Insight 3-Point Plan to Encourage E-Invoicing to Public Sector 36 The Paypers E-invoicing for everybody: A closer look at the new European e-invoicing scheme SimplerInvoicing 38 sharedserviceslink.com E-Invoicing in 7 Steps - from Preparation to Roll-Out 40 Accounts Payable Network E-Invoicing Sheds Light on Supply Chain 42 COMPANY PROFILES
7 VOICE OF THE INDUSTRY
8 6 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 VOICE OF THE INDUSTRY NACHA XML via the Automated Clearing House Network: Creating Standards, Driving Efficiencies and Advancing B2B Payment Remittance Processes US businesses process 15.5 billion remittances monthly with domestic and international trading partners, according to findings from a study commissioned by NACHA The Electronic Payments Association. However, only 10% of remittances are sent simultaneously with payments using a standardized format, which means businesses currently re-associate the remaining 14 billion remittances that are sent separately each month. According to that same study, it was shown that businesses want to receive remittance information with the payment. 69% of businesses receiving remittances indicated that 'remittance information with the payment' is 'very' to 'extremely important.' in core banking infrastructure and no consistency in exchanging XML usage within the ACH Network today, having a standard for structured XML remittance data elements and tags will support uniform adoption of XML information in ACH Network addenda records. In support of achieving this standard, NACHA developed the XML- ACH Remittance Program. The XML-ACH Remittance Program features: NACHA-defined remittance data dictionary, rules and formats; Opt-in usage for financial institutions, service providers and corporates; Identical process flow compared to EDI; and ISO20022 formatting and a bridge to payment remittance harmonization. Corporate receivers of payments rely on payment remittance information to close open accounts receivable entries, apply credit to an account, and determine any remaining liabilities. They desire consistent remittance data across all payment channels, whether wires, ACH, credits cards, or checks, and are constantly looking for ways to streamline these processes. The ACH Network, which serves as the backbone for the electronic movement of money and data, provides for the ability to easily pass payments and remittance information with transactions. As such, by leveraging the capabilities of the ACH Network, businesses can more efficiently manage the billions of remittances sent separately from payments, significantly improving their payables and receivables processes. XML in the ACH Network: The XML-ACH Remittance Program Currently, remittance information in the ACH Network is required to be formatted according to ANSI ASC Electronic Data Interchange (EDI) specifications. This limits its use primarily to large businesses. But Extensible Markup Language (XML) is a data format that could drive efficiencies and facilitate greater information exchange between businesses of all sizes. With the growing adoption of XML The XML-ACH Rules define the roles, responsibilities and warranties for users. In addition, the XML-ACH Rules provide the technical specifications for creating and transmitting XMLformatted remittance information in CTX (Corporate Trade Exchange) entries for business-to-business (B2B) payments. The specifications include an ISO20022 based data dictionary, technical mapping guidelines, examples, best practice recommendations, XML schema structure and XSD output. Benefits of the XML-ACH Remittance Program Having a standard, as defined by the XML-ACH Remittance Program, will provide consistency for using XML in ACH addenda records by creating uniformity for businesses using XML to send and/or receive payment remittance information via the ACH Network. The XML-ACH standard, backed by the NACHA Operating Rules, also obviates the need for bi-lateral agreements. Participants can therefore experience better efficiency, improved automation, and flexibility in the payment processing life cycle.
9 VOICE OF THE INDUSTRY E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE Robert Unger, Senior Director, ebilling & Payments, NACHA Additionally, the XML-ACH Remittance Program: Saves corporations the expense and time required for proprietary XML translations as more of the supply chain processes are increasingly becoming XML enabled; Allows banks and other remittance providers to extend valueadded services to their corporate customers of all sizes; Simplifies the process for small businesses, which find existing formats too complex; and Helps the migration from EDI and provides a next generation option for clearing systems that can accommodate complex payment information. The Future of XML in the ACH Network One of the unique features of the XML-ACH Remittance Program is that it leverages international ISO20022 payment messaging specifications. It also helps bridge payment remittances across payment systems, particularly the US wire systems, FedWire and CHIPS, which recently developed an ISO20022 based remittance format option. As part of the plan to ensure continued growth of the XML-ACH Remittance Program and B2B transactions, NACHA is working with the Interactive Financial exchange Forum to develop official ISO20022 remittance specifications. In this way, the XML-ACH Remittance Program can enable the expansion of B2B electronic payments and further the industry s effort to advance global payments by developing payments processes and formats based on international standards. ABOUT NACHA: NACHA MANAGES THE DE VELOPMENT, ADMINISTRATION, AND GOVERNANCE OF THE ACH NETWORK, THE BACKBONE FOR THE ELECTRONIC MOVEMENT OF MONEY AND DATA FROM ACCOUNT TO ACCOUNT. NACHA OPERATING RULES GUIDE RISK MANAGEMENT AND CREATE PAYMENT CERTAINTY FOR PARTICIPANTS. NACHA MEMBERSHIP, COUNCILS, AND FORUMS FOSTER DIALOGUE AND INNOVATION TO STRENGTHEN THE NETWORK. ABOUT THE AUTHOR: AS SENIOR DIRECTOR AT NACHA, ROBERT UNGER LEADS NACHA S COUNCIL FOR ELECTRONIC BILLING AND PAYMENT (CEBP) AND ALSO DIRECTS NACHA S ELECTRONIC BILLING AND INFORMATION DELIVERY SERVICE (EBIDS). IN ADDITION, MR. UNGER IS THE B2B PRODUCT MANAGER WITHIN NACHA, RESPONSIBLE FOR ACH INITIATIVES FOCUSED ON B2B PAYMENTS AND REMITTANCE INFORMATION. Through initiatives like the XML-ACH Remittance Program, and collaboration with organizational standards and leadership groups, NACHA is working to increase use and adoption of B2B electronic payments. NACHA invites organizations financial institutions, corporations and related technology/payment service providers to participate in the XML-ACH Remittance Program. The XML-ACH Program is an opt-in program, meaning participants must enter into an agreement with NACHA and can only exchange transactions with other stakeholders that have opted-in. For more information about the Program or to learn how to become a participant, visit:
10 8 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 VOICE OF THE INDUSTRY European Commission E-INVOICING: IT S TIME FOR EUROPE TO REAP THE BENEFITS At the end of June 2013, the European Commission put forward a draft directive on e-invoicing in public procurement. One of the focus points of this document is the proposed establishment of a European e-invoicing standard to improve interoperability between different e-invoicing systems. What are the main challenges EU-wide in terms of overcoming the fragmentation of the European business environment and establishing a functional, interoperable e-invoicing ecosystem? Currently, a number of countries across the EU are undertaking action to promote the use of electronic invoicing. In some of them, e-invoicing has been made mandatory when dealing with public bodies, and others are planning to follow. Unfortunately, in the majority of cases, the national e-invoicing systems are based on standards which are not compatible. This means that a company in, say, Italy is not able to send an e-invoice to a public body in Denmark because the format of the Italian invoice cannot be read by the Danish e-invoicing system. This causes market access barriers and robs European companies of potential business opportunities in other Member States. To complicate matters further, many sectoral standards are also in use. The proliferation of these systems raises the cost of doing business in Europe, as companies frequently need to support several different e-invoicing formats. This is not good business sense and is not sustainable. The obvious solution is to develop a single e-invoicing format a common European standard and make it obligatory for all public administrations across the EU to accept e-invoices sent in this standard. This is precisely what the Commission is proposing in the draft Directive. As a policy expert within the Directorate General Internal Market and Services, if you were to summarize your current insight, what would be the 'state of affairs' of e-invoicing in Europe at the present moment? E-invoicing offers many benefits: significant cost reduction, process simplification, reduced payment time, greater security of data, as well as numerous environmental benefits. This is confirmed by enterprises and public authorities which already use it. Unfortunately, Europe is not taking full advantage of these benefits. While in some Member States the use of e-invoicing is already very common, in others it is practically unknown. Although these differences stem in part from the general level of digitisation in the different countries, government policy also plays a crucial role. Not surprisingly, the countries with the greatest use of electronic invoices are those which have made e-invoicing mandatory in public procurement. Where the public sector has not acted, usage is much lower. Even worse, in some Member States the use of e-invoices is hindered by a range of legal, regulatory and technical requirements. Combined with the multiplicity of e-invoicing standards on the market and the lack of interoperability between them, this creates a very complex environment which makes broader adoption difficult. The result is that e-invoicing currently makes up less than 15% of all invoicing procedures in Europe. There is therefore a marked discrepancy between the estimated benefits of large-scale e-invoicing adoption and the actual pace of adoption in Europe. In your opinion, what would be some of the main causes of this phenomenon and why has e-invoicing take-up proven so slow? The lack of legal clarity and the technical complexity in this area play a predominant role. Another reason is a fear of the initial
11 VOICE OF THE INDUSTRY E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE Bartosz Dworak, Policy Officer in the Directorate-General for Internal Market and Services implementation costs and a perceived difficulty of use. Although several studies have shown that the benefits greatly outweigh any such costs and that these can usually be recouped within a period of less than two years, some market actors are still hesitant to undertake these investments. The current economic situation might make such a decision even more difficult, despite the fact that in the medium-term, the introduction of e-invoicing will almost certainly significantly improve efficiency. As for the difficulty, a lot of best practice exists which proves that e-invoicing need not be complicated. But even the public sector is now beginning to act, which is very encouraging. Another market segment which seems more hesitant is that of small and microenterprises. However, in both cases the problem doesn t necessarily stem from a lack of understanding of the potential benefits, but is rather due to a fear of the cost and effort associated with making the switch. Considering the large number of existing standards and the current lack of legal clarity, this fear is not entirely unjustified. The draft Directive and the Communication aim to eliminate this uncertainty and, in this way, promote the move towards end-to-end e-procurement in Europe. A communication accompanying the draft directive also focuses on the public sector and in particular on the area of e-procurement. Could you elaborate a bit more on the perceived benefits of transitioning towards a market where end-to-end e-procurement is the norm? End-to-end e-procurement by which we mean the automation of all steps in the procurement process, from publication of the tender to payment brings important benefits of scope. The economic benefits of automation are greatest when the need for human intervention is minimised or even entirely removed. The more elements covered, the greater the potential benefits. While total automation is not possible in the pre-award phase, where someone will always be required to study the tender documents or select the most economically advantageous offer, it is crucial in the post-award phase. For example, if an invoice is sent electronically but then has to be processed and archived manually, a significant portion of the benefit of automation will be lost. Full automation will therefore lead to greater efficiency and greater cost reductions. Payments to suppliers will also be made faster. The benefits of e-invoicing and of e-procurement extend beyond eliminating paper. In your opinion, are European public and private sector decision makers aware of the benefits that could be derived from signing up for e-invoicing and / or e-procurement? The benefits of e-invoicing and e-procurement seem to be wellunderstood and are widely acknowledged. This is perhaps slightly less true of public administrations, which frequently lag behind the private sector in terms of taking up electronic tools. ABOUT DG INTERNAL MARKET AND SERVICES, EUROPEAN COMMISSION: THE INTERNAL MARKET AND SERVICES DIRECTORATE GENERAL (DG MARKT) IS ONE OF THE DIRECTORATES GENERAL AND SPECIALISED SERVICES WHICH MAKE UP THE EUROPEAN COMMISSION. ITS MAIN ROLE IS TO COORDINATE THE COMMIS- SION S POLICY ON THE EUROPEAN SINGLE MARKET AND TO SEEK THE REMOVAL OF UNJUSTIFIED OBSTACLES TO TRADE, IN PAR- TICULAR IN THE FIELD OF SERVICES AND FINAN- CIAL MARKETS. ABOUT THE AUTHOR: BARTOSZ DWORAK IS A POLICY OFFICER IN DG MARKET, RESPONSIBLE FOR E-INVOICING AND E-PROCUREMENT. PRIOR TO THAT, HE WAS RESPONSIBLE FOR MONITORING THE IMPLEMENTATION OF COHESION POLICY PROGRAMMES AND PROJECTS IN POLAND IN THE DIRECTORATE- GENERAL FOR REGIONAL POLICY. BEFORE JOINING THE COMMISSION, HE WORKED FOR A COMPANY WHICH PIONEERED THE USE OF ELECTRONIC AUCTIONS IN PROCUREMENT.
12 10 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 VOICE OF THE INDUSTRY European E-invoicing Service Providers VeR and EESPA Member Milestones on Our Way to Agenda 2020 Interoperability and Common Standards are just the Beginning Digital agenda for Europe According to the European Union, businesses and public bodies throughout Europe are requested to switch to electronic invoicing by the year The reasons for transitioning to e-invoicing are: stimulation of the pan-european economy through higher efficiency due to time and cost savings, reduced complexity in the financial supply chain, improved cash flow, enhanced competitiveness, less environmental pollution as well as minimized administrative burden, particularly in the public sector. Within the scope of the comprehensive initiative 'Digital Agenda for Europe', four priorities for achieving Europe-wide e-invoicing were set: Creation of a coherent legal framework Large-scale market introduction with special emphasis on SMEs Promotion of the highest possible level of acceptance by all trading partners Establishment of a European standard for electronic invoicing Pertinent measures and pilot projects have been initiated at the European level as well as in individual member states with differing degrees of insistence and speed. E-invoicing facts and figures The figures speak for themselves, and underscore the advantages of switching to area-covering e-invoicing: Approximately 33 billion invoices are issued in Europe each year; 6.5 billion thereof in Germany. 5-10% of these invoices are issued in electronic form, the remainder in paper form. Changing from paper-based to electronic invoicing means saving 60-70% of the costs per invoice. A paper-based invoice, including the whole processing and finishing chain, costs up to and public bodies alone; savings in the amount of EUR 39 billion have been forecast for Germany. It is currently assumed that the volume of electronic invoices worldwide will undergo a 20% growth this year (in Europe: 20% in B2C and 29% in B2B and B2G selling environments). The penetration of e-invoicing varies depending on which EU member state you look at. The share of electronic invoices currently ranges between 3 and 40%, with North European coun tries (Scandinavia, Finland, Iceland) clearly taking the lead. In Germany, the share is less than 10%. At present, more than 400 e-invoicing providers are active in the European market. Milestones leading up to 2020 For the Agenda 2020 to become a success, several milestones will have to be achieved along the way. Inclusion of e-invoicing into financial and payment procedures and introduction into the SEPA payments area will be of vital importance. Direct linkage between e-invoicing and online banking, already successfully working in Finland and the Baltic states, will play a major role in this process. Furthermore, integration of e-invoicing into procurement systems will be the only way to convince large sections of the economy to follow along. Implementation of the EU Directive concerning e-procurement, which shall be completed by the year 2016, will be decisive in this respect. As regards the German market, electronic invoicing should become mandatory for public sector bodies (communities and authorities). Public authorities, the largest group of invoice issuers and recipients nationwide, should adopt the motto: Lead by example. As the public sectors in other countries also rank among the biggest invoice issuers and recipients, they could exert a sweeping influence on the corporate sector. Countries like Denmark, Finland, Spain or Austria provide excellent examples. EUR 20 each % of entrepreneurs conduct business with public sector bodies. Hence the public sector will particularly benefit from the enormous savings generated by e-invoicing. Within six years, the Europe-wide transition from paper-based to electronic invoicing could lead to savings in the order of magnitude of approximately EUR 240 billion for administrative The work of national and European e-invoicing associations contributes to establishing uniform standards for future electronic invoice traffic, setting the stage for informing and supporting businesses and public authorities. While the establishment of a uniform standard is requested by the EU, we are of the opinion that the transmission of structured data instead of PDF
13 VOICE OF THE INDUSTRY E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE Marcus Laube, Co-Chair e-invoice Alliance Germany (VeR) should be pushed for as this would be the only way to realize enormous savings potentials. Consequently, the general use of structured data will be much more vital to invoice exchange than the agreement of a uniform standard. This process, especially across country borders, is highly complex and time consuming. Rather, the public sector is requested to have communities and public authorities urge their business partners to use electronic invoicing. Ultimately, however, the businesses themselves will want to benefit from the enormous savings potentials thus contributing most decisively to the realisation of the digital agenda. Therefore, the corporate and public sectors should not wait for new standards but use existing technical means or offers made by service providers in order to benefit from the advantages of the electronic invoicing process. Furthermore, political forces and organisations must see to the further development of roaming possibilities between service providers, because area-wide acceptance will only be achieved if all individual systems can cooperate smoothly with each other. Associations like the e-invoice Alliance Germany (VeR) and the European E-Invoicing Service Providers Association (EESPA) have already created the relevant foundations and developed the required contractual as well as technical standards. Even if a lot of additional work still needs to be done, great progress has already been made on the way to a seamless exchange of invoice data. Current membership numbers and continuous membership growth of the aforementioned associations illustrate this success. All in all it can be stated that a variety of different building blocks will be required to achieve the goal of the digital agenda, i. e. dispatch of a major part of invoices by electronic means only, by the year The establishment of a uniform standard does not play the essential role that is often attributed to it in public perception. 10% ABOUT VER: THE MUNICH-BASED E-INVOICE ALLIANCE (VER) REPRESENTS THE INTERESTS OF SERVICE PROVIDERS AND CONSULTING FIRMS CONCERNED WITH ELECTRONIC IN - VOICING AS WELL AS THOSE OF BUSINESSES USING E-INVOICING. AS SUCH, THE ALLIANCE CAN BE CONSIDERED THE MOUTHPIECE OF THE WHOLE E-INVOICING ECONOMY. THE VER CURRENTLY HAS OVER 45 MEMBERS. ABOUT EESPA: EESPA HAS BEEN FORMED AND REGISTERED AS AN INTERNATIONAL NON-PROFIT ASSOCIATION (AISBL) UNDER BELGIAN LAW. AS A TRADE ASSOCIATION FOR THE E-INVOICING INDUSTRY, EESPA ACTS AS A PLATFORM FOR INDUSTRY COOPERATION ON NON-COMPETITIVE ISSUES. ABOUT THE AUTHOR: MARCUS LAUBE IS THE FOUNDER AND MANAGING DIRECTOR OF CROSSINX GMBH. IN THE LAST 14 YEARS HE STUDIOUSLY APPLIED HIMSELF TO THE DEVELOPMENT OF INNOVATIVE B2B INTER NET SERVICES FOR THE FINANCIAL SUPPLY CHAIN. HE IS ALSO A FOUNDING MEMBER OF THE FORUM ELEKTRONISCHE RECHNUNG DEUTSCHLAND (FERD) (FORUM FOR ELECTRONIC INVOICING GERMANY), A MEMBER OF THE EUROPEAN COMMISSION S E-INVOICING EXPERT PANEL AND A MEMBER OF THE BOARD OF THE EUROPEAN E-INVOICING SERVICE PROVIDERS ASSOCIATION (EESPA). 50 members of the EESPA have so far agreed to a common standard
14 12 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 VOICE OF THE INDUSTRY PEPPOL Carmen Ciciriello, Executive Communications Officer, OpenPEPPOL EXCHANGING BUSINESS DOCUMENTS WILL BECOME TRIVIAL, LEADING TO FURTHER INNOVATION IN E-PROCUREMENT; SIMILAR TO HOW APPLETS HAVE CHANGED THE WAY WE USE SMARTPHONES Could you please share more information about PEPPOL and how it came into being? What was the main driver for this European initiative and what are its key design principles? While many EU countries already use electronic procurement, most solutions are implemented on a national or regional level, each with their own separate systems and standards, creating isolated 'islands of e-procurement' operating in closed networks, making connections between buyers and suppliers costly and complex. many-to-many legal framework instead of the traditional bilateral agreements entered into between service providers. Can you give some usage data for PEPPOL such as transaction volumes, number of businesses, number of service providers, which communities, etc? Since the project ended in 2012, PEPPOL components have been implemented in 12 European countries, with over 60 PEPPOL Access Points established. Norway and Austria have made e-invoicing mandatory for public sector suppliers, offering In 2008, the PEPPOL (Pan-European Public Procurement Online) project was launched with the purpose to align business processes using common standards, address common legal issues, to develop open source technologies and an open and accessible network. The project was co-funded by the European Commission and a consortium of 18 government agencies from 11 Member States and Associated Countries: Austria, Denmark, Finland, France, Germany, Greece, Italy, Norway, Portugal, Sweden and the UK. PEPPOL e-invoicing as an implementation method. In the Norwegian market, the PEPPOL-based e-invoicing network is the fastest growing solution for e-invoicing, also being widely used between private sector entities in addition to the public domain. In Italy, the Region of Lombardia is implementing PEPPOL for e-orders, while the region Emilia Romagna is driving adoption in the health care sector for e-orders and e-invoices. Plans are currently underway for implementations in Ireland, France, Netherlands and Poland with interest increasing from outside the EU. A key feature of the PEPPOL network (based on a 4-corner model) is the freedom for suppliers to engage with an Access Point provider of their choice, to send and receive electronic documents with any organization in the PEPPOL network through one single source eliminating complex relationships with buyers, their service providers and related obligations. The network is governed by the PEPPOL Transport Infrastructure Agreements establishing a As an expert in the fields of e-procurement and e-invoicing, how would you characterize the European e-procurement landscape at present? E-procurement is still in its infancy in Europe with many different formats and standards in use. This complexity requires serious investment from large organizations and service providers, depending on the number of standards supported. SMEs are often excluded
15 VOICE OF THE INDUSTRY E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE André Hoddevik, Secretary General at OpenPEPPOL from end-to-end integration, having to settle for semi-automated document downloads that are typically processed manually. What are the key benefits PEPPOL brings to the Service Provider industry? ICT companies can offer a range of PEPPOL enabled services expanding the PEPPOL network to become global leaders for standards-based e-procurement. Software vendors can develop ERP solutions and small IT companies can access new markets by offering PEPPOL based solutions, overcoming barriers to expansion across Europe. Service providers can adopt the PEPPOL Business Interoperability Specifications (BIS), reducing the cost and complexity of supporting multiple formats and enabling system integration. We see PEPPOL as the driver of e-business interoperability in Europe, implementing standards for e-procurement processes with its network as a backbone for e-procurement in Europe. What are PEPPOL s three main objectives over the next five years? Encourage governments and their suppliers to continue implementing e-procurement using PEPPOL specifications; further develop innovative PEPPOL-based ICT products and services through membership of OpenPEPPOL and ensure the PEPPOL network continues to grow in an open, accessible and compliant manner, towards a Digital Single Market. provide translation services where national formats still exist. In your opinion, what impact can the proposal for a Directive on e-invoicing (dd 26 june 2013) have on the e-invoicing landscape? The Commission s proposal recognizes the need for a common e-invoicing standard and solicits commitment from governments to plan for convergence from national to European standards. The proposal aims to support e-procurement adoption by setting a deadline for mandatory acceptance of e-invoices by all public buyers. The introduction of legislative measures making e-invoicing a standard practice in public procurement will make the public sector a 'lead market' for e-invoicing and spearhead its wider use in the economy. A common barrier to this market evolution is resistance from mainly private organizations which have invested heavily in closed e-business networks. This is a perfectly natural reaction that will shift as adoption increases and e-procurement models are driven by much wider market demand. Where do you see Europe in 10 years time? Will we have solved the issue of interoperability and managed to eliminate paper-based processes? In 10 years we believe the majority of governments will have realized interoperability through the use of a common European standard. Industry specific standards will be interoperable with EU specifications and ERP vendors will have led the way in ABOUT PEPPOL: THE OPENPEPPOL ASSO- CIATION WAS SET UP IN SEPTEMBER 2012, TO TAKE RESPONSIBILITY FOR THE MAINTENANCE OF THE PEPPOL SPECIFICATIONS AND TO PRO- MOTE IMPLEMENTATION ACROSS EUROPE. IN ITS FIRST YEAR OF OPERATION, OVER 75 MEMBERS HAVE JOINED FROM BOTH THE PUBLIC AND PRIVATE SECTORS IN 18 COUNTRIES. ABOUT THE AUTHORS: CARMEN CICIRIELLO IS RESPONSIBLE FOR COMMUNICATIONS AND RECRUITMENT OF EUROPEAN GOVERNMENTS FOR OPENPEPPOL. SHE IS A MEMBER OF THE EC STAKEHOLDER EXPERT GROUP ON PUBLIC PROCUREMENT AND OF THE PAYMENT SYSTEMS MARKET EXPERT GROUP. SHE IS ALSO THE CEO OF CELERIS LTD. ANDRÉ HODDEVIK IS HEAD OF E-PROCUREMENT UNIT IN DEPARTMENT FOR PUBLIC PROCURE- MENT IN DIFI, THE NORWEGIAN AGENCY FOR PUBLIC MANAGEMENT AND EGOVERNMENT. HE IS CURRENTLY THE SECRETARY GENERAL OF OPENPEPPOL AISBL.
16 14 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 VOICE OF THE INDUSTRY EBA Supply Chain Finance Comes of Age The Euro Banking Association (EBA) has published a comprehensive Market Guide on Supply Chain Finance (SCF) based on the work of its Supply Chain Working Group (SCWG) established in The SCF instruments in focus are as follows: Accounts Payable or Buyer-centric called Approved Payables Finance or sometimes Reverse Factoring, Supplier Finance or Confirming, and sometimes (confusingly) simply Supply Chain Finance, based on the discounted payment of accounts payable in favour of suppliers by accessing a financial institution s or a buyer s own liquidity. Accounts Receivable or Supplier-centric such as Receivables Finance, Receivables Purchase, Invoice Discounting and Factoring. Inventory-centric (or pre-shipment ) such as Purchase Order (P.O.)-based Finance and Inventory Finance. Bank Payment Obligation (BPO) an interbank instrument developed by SWIFT and now adopted by the International Chamber of Commerce through the Uniform Rules for the Bank Payment Obligation (URBPO). Traditional documentary trade finance such as Letters of Credit, and documentary and trade loans. Complemented by other instruments and enablers, e.g. other types of asset finance, export and project finance, and hedging and payment instruments. Ecosystem Working capital management is a pressing issue and with the availability of automation and internet technology an array of supply chain management techniques are evolving. Large buyers are often seeking to lengthen payment terms and suppliers are subject to liquidity pressures. On this basis, a new market for SCF is growing rapidly, although it is currently a niche activity, which engages larger buyers and suppliers, and has yet to apply its potential to the SME segment, where there is considerable demand for new sources of finance. Definitions There is a need to take great care with the language used by practitioners and drive towards much greater clarity of definitions and commonly used terms. This is illustrated by the definition of SCF itself, which sometimes is used as an umbrella term for a whole range of financial instruments and sometimes denotes a specific technique or component of the SCF portfolio. Supply Chain Finance is defined as the use of financial instruments, practices and technologies to optimise the management of the working capital and liquidity tied up in supply chain processes for collaborating business partners. SCF is largely event-driven. Each intervention (finance, risk mitigation or payment) in the financial supply chain is driven by an event in the physical supply chain. The development of advanced technologies to track and control events in the physical supply chain creates opportunities to automate the initiation of SCF interventions. The next levels of definition are not well established. There is a plethora of proprietary language in use. In response, various organisations have started to build glossaries and bodies of knowledge to support their members. The most noteworthy and active is the Bankers Association for Finance and Trade- International Financial Services Association (BAFT IFSA). The definitions elaborated by BAFT-IFSA are worthy of support. The International Chamber of Commerce (ICC) has created the universally respected industry definitions of traditional documentary trade finance instruments. ICC has codified the definition of the Bank Payment Obligation. For other open account based SCF areas, ICC could also engage further in the definition process. It is recommended that a representative international round table be formed to develop further convergence.
17 VOICE OF THE INDUSTRY E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE Charles Bryant, Senior Adviser, EBA Risk and regulation With regard to internal risk management, measures are proposed to adequately manage SCF business lines and risks, together with a number of searching questions that bankers could usefully ask themselves. Concern is expressed by bankers that Basel III and its European counterpart, the Capital Requirements Directive IV, propose tighter risk and capital allocations than its predecessor Basel II with possible impacts on the availability of finance to Industry collaboration is recognised as a growing need and the EBA SCWG has identified numerous areas of potential collaboration. Beyond the competitive space, where collaboration has no role, there is potential for collaboration on a bilateral basis through partnerships or commercial contracts. Collaboration on a multilateral basis between market participants in areas defined as being non-competitive, non-infringing of competition law will also support overall market development. underpin growth in world trade. Reference is made to a set of proposed guidelines in relation to AML and regulatory compliance and a further regulatory aspect concerns the accounting treatment of SCF. Automation: e-invoicing is a game changer Automation refers to the range of IT-based and business tools that support the management of supply chains. With the increasing use of fully automated end-to-end solutions, the transmission of dematerialised business documents over a B2B network can now mean that SCF offerings can be substantially automated. A key aspect is the ability to accelerate cycle times especially invoice, payment and other approvals in order to trigger event-driven SCF interventions. The growing popularity of B2B networks, which support e-invoicing and supply chain automation, is bringing to bear capabilities and benefits to end-users and other intermediaries such as financial institutions. Through its dematerialisation and the acceleration effects, e-invoicing is clearly demonstrating its potential as a game-changer for the SCF business. Through organisations such as the European E-invoicing Service Providers Association (EESPA), e-invoice interoperability is very much in focus. Collaboration and Competition In a network industry, a debate takes place about the relevant roles of competition and collaboration between market participants. Up to now, SCF has largely been conducted as a purely competitive activity with industry cooperation limited to asset distribution and the activities of some successful collaborative finance platforms. ABOUT ABE-EBA: AS A COUNTRY-NEUTRAL BANKING ASSOCIATION FOR PAYMENT AND TRANSACTION BANKING PRACTITIONERS WITH A PAN-EUROPEAN MINDSET AND VISION, THE EURO BANKING ASSOCIATION (EBA) CONTINUES TO MONITOR SUPPLY CHAIN DEVELOPMENTS. FOR FURTHER INFORMATION, PLEASE VISIT OUR WEBSITE THE EBA MARKET GUIDE CAN BE DOWNLOADED AT SCF.ASPX. ABOUT THE AUTHOR: CHARLES BRYANT IS SENIOR ADVISER TO THE EURO BANKING ASSOCIATION AND VICE-CHAIR OF EESPA, AS WELL AS EUROPEAN AFFAIRS ADVISER AT OB10. HIS CO-AUTHOR FOR THE EBA MARKET GUIDE IS ENRICO CAMERINELLI, SENIOR ANALYST AT THE AITE GROUP.
18 THOUGHT LEADERSHIP SECTION
19 INDUSTRY LEADERS DISCUSS: E-INVOICING AS THE DRIVER OF A REVOLUTION IN BUSINESS PRODUCTIVITY COLLABORATIVE WORKFLOW: A VALUE DRIVEN APPROACH TO THE LACK OF AUTOMATION MULTI-CHANNEL BILL PAYMENT: THE CBILL SERVICE SIMPLERINVOICING: THE NEW EUROPEAN E-INVOICING SCHEME
20 18 E-INVOICING, SUPPLY CHAIN FINANCE & E-BILLING MARKET GUIDE 2013 THOUGHT LEADERSHIP Ariba WE ARE ON THE CUSP OF THE NEXT REVOLUTION IN BUSINESS PRODUCTIVITY WITH EVERY PROCESS THAT TOUCHES THE EDGE OF THE ENTERPRISE RUNNING EVEN BETTER THROUGH A BUSINESS NETWORK What trends do you see in the future for e-invoicing in Europe? There is so much happening in Europe right now; it s a very exciting partnership. In fact it s one of our fastest growing solution areas as it capitalises on the connectivity and efficiency of the Ariba Network to help both buyers and their suppliers. time. E-invoicing is set to continue its rapid growth, helped by the impending B2G e-invoicing programs and EU-wide projects like PEPPOL. I also expect to see more governments implement central invoice 'check-in' systems to reduce tax evasion; many are looking at Latin America and Portugal closely. Across Europe we have an interesting mix of solutions per country and it certainly isn t one size fits all. In Germany early payment discounting is quite standard and corporates have geared up their AP departments to process invoices quickly to obtain the discounts; a perfect landscape for dynamic discounting. Compare In general, I am seeing the breaking down of walls between pro cure ment and finance with realisation that it s a connected that with Spain where the practice of supply chain financing, called Confirming, is common place. process; shifting to much more strategic programmes. A common theme I m hearing is the move away from siloed processes and how corporates are on a journey. E-invoicing may be a popular star ting point but large corporates are talking about connecting their supply chain to trade electronically; e-invoices are just one document in one process. Adding related P2P documents are now the baseline, with the journey including items such as e-sourcing, e-procurement and working capital management. You mentioned working capital management, what are you seeing from your customer base? The journey our customer base is taking typically starts with Looking to the future I can see the lines being further blurred be tween who offers up the credit for early payment with buyers, credit card companies, factoring agents, banks and high net worth individuals all playing a part. The EBA recently published a paper on e-invoicing and SCF and it's worth a read for those interested in that space. Combine this with the big data movement and network metrics can allow 3rd parties to provide funding across the whole P2P cycle from winning a sourcing event, receiving a PO right through to any inventory they hold; the invoice-only approach we see today will be just the start. e-invoicing and discounting together as they make a perfect
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