Tieto inga major_ecr_presentation english

E- invoicing – practice of usage in Europe
ECR Forum, June 2010
Inga Major

Table of contents
Tieto
What is E-invoicing
Different data formats ; tax&legal requirements
Walki Case – demonstration of workflow with e-signature
Current EU VAT directive. New VAT directive
While label (own – brand) e-invoicing platform for banks
Future in Russia?
2010-06-03
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16 000 IT professionals in close to 30 countries
Customers on all continents
One of the leading IT service companies in Northern Europe and global leader in selected segments
Net sales approximately EUR 1.8 billion
Listed in NASDAQ OMX Helsinki and Stockholm
Founded in 1968
Represented in EU expert commission on e-invoicing
Tieto today

E-invoicing – the whole process from creation to receiving of electronic invoice+ storage
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Definitions (Wikipedia)
E-invoice
An e-invoice is an electronic transaction document that contains billing information in an electronic format.
An e-invoice may be
processed within an electronic invoice presentment and payment (EIPP) (B2B) or EBPP (B2C) workflow system or may be
uploaded directly into a user’s ERP or accounting system.
Standard types of workflow performed on an e-invoice include verification, coding, routing and approval.
By using e-invoices companies eliminate manual data entry, facilitate faster payments to their vendors and track invoices more easily
EIPP – normally it includes e-invoice exchange, portal and ERP integration
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Definitions (Wikipedia)
The process
E-invoicing provides seller’s with a method to submit invoices electronically to their customers.
The most effective e-invoice programsconnect the seller’s accounts receivable operations with their customer’s accounts payable operations.
The seller submits an e-invoice to the buyer's EIPP system. The buyer, then, examines and verifies the accuracy of the invoice, codes and routes it for payment approval.
E- invoicetypes
EDI – Also known as Electronic Data Interchange, is an electronic transfer of data from computer to computer using an agreed structured format that can be generated and read by a computer and processed automatically.
XML - Also known as extensible mark-up language, XML is a widely accepted way of sharing information over the Internet in a way that computers can use, regardless of their operating system.
Webforms - Allow users to enter data that is typically sent to a web serverfor processing.
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Corporate interface challenge:no single data formats
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papiNet (paper and pulp)
chemXML (Chemical)
VDA/Odette (automotive)
Rosettanet (Electronics)
Tieto has
any-to-anyconversionserviceNo need to waitfor standards(ISO 20022)!
UN/Edifact
ETC.
ANSI X.12
EANCOM
Advantage:
Flexibility for different businesses & freedom to use any formats
No over-regulation

E-invoice Tax & Legal Compliance in a Roaming Connection
Other Service Provider
e-Invoice platform
eInvoice Hub Service
Invoice
Issuer
InvoiceReceiver
Inter-mediate
format
Conversion
to roamingpartner
format
Attachment
packaging
Validation
Conversion tointermediateformat
Conversion toreceiverformat
Attachment
separation
PDF
Rendering
PDF Signing
Verification
Compliance Map
Signing and Validation Service
Digital Document
Archiving Service
SupplierServices
BuyerServices
AuditServices
In co-operation with
Receiver
Country’s
Certification
Authority
Issuer
Country’s
Certification
Authority
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Tax & Legal Support in E-invoicing
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Walki case

An Actual Case from Paper and Pulp
Customer locations
Production and sales locations
Tieto service signs e-invoices with issuing country and receiving country certificates
More countries expected to be added
Customer requires all e-invoices to Germany, France and Austria to be signed
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The Process for Walki
Other Service Provider
Invoice in
papiNet
format
Tieto
XML
Conversion
From Tieto XML
to receiverformat
InvoiceReceiver
Attachment
packaging
Validation
Conversion Tieto XMLformat
Attachment
separation
PDF
Rendering
PDF Signing
Verification
Archive
Signedpdf
For archiving
Signing PDF file
With
Digital Signature
Receiver
Country’s
Certification
Authority
FRANCE
AUSTRIA
In co-operation with
Issuer
Country’s
Certification
Authority
GERMANY
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Data flow with Digital Signature
Invoice sender (supplier) sends data to Tieto in own format
Validation, conversion to Tieto format
Tieto produces original document – pdf file
Original document is signed with digital signature
No data files are signed! (if data would be signed –it would be a problem with auditors and tax authorities : they treat data as original and have no resources to convert data to visualised format; for e-invoice provider signed data sets limitation for conversion services, ie presentment etc)
Power of attorney is used to sign by the name of supplier
Data files are sent to roaming partner or to e-inv receiver
Signature verification is done by one of them
Original documents (signed pdfs) are sent back to
supplier, saved in electronic archive
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Contractual relationships
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1.Service agreement
(allows to create ORIGINAL
from data)
Interchange
agreement
Other
Service
Provider
2. Power of attorney to sign
ORIGINAL documents
Business contract for support in
meeting tax& legal requirements
Agreements with several CA’s
in different countries

Practical situations for Digital Signature
Large Corporates operate and have subsidiaries in several countries and shall obey different local laws and authority instructions
Harmonized business processes are often executed from centralized shared service centers that serve all countries and units
Seller shall often align itself into buyer requirements
Some Corporates require all purchase e-invoices to be digitally signed for such legal units operating in countries where digital signing is applied
Problems raising due to the fact that CA’s are not connected with each other
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Current EU VAT directive
The Directive on VAT invoicing establishes
a list of ten mandatory general items of information that must be included on every invoice, plus four additional items that may be required in specific circumstances,
simplified arrangements for small companies and small-value invoices,
the requirement for Member States' tax authorities to recognize the validity of electronic invoices without any notification or authorization system, on condition that the authenticityof origin and integrityof data are guaranteed through the use of electronic signatures or Electronic Data Interchange (EDI).
Electronic signatures allow someone receiving data over electronic networks to determine the origin of the data and to check that it has not been altered.
EDI is a system of secure electronic information transmission used by businesses,
the possibility in certain circumstances of outsourcing invoicing operations to a third party or to the customer (i.e. self-billing),
free choice of the place and method of storage of invoices and the acceptance of electronic storage, including on-line storage in a Member State other than the Member State in which the firm in question is located
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The New EU Directive Proposal
How will this proposal make electronic invoicing easier?
- Equal treatment between paper and e-invoices by removing specific VAT conditions for e-invoicing
By creating equal treatment between paper and electronic invoices the Commission believes the VAT obstacles that hamper the use of electronic invoicing will be removed –
The current rules for e-invoicing requiring either use of an advanced electronic signature or EDI, along with the various options and interpretations afforded to Member States, makes electronic invoicing difficult to implement, especially cross border.
These conditions will be removed.
Authenticity requirements can be achieved by
business controls that provide audit trail between supply and invoice (in same way as businesses do for paper invoices)
EDI or advanced e-signatures based on qualified certificate -only examples – not mandatory
Technology neutral approach - Member States can not prescribe the use of any particular technology
This approach has support of Expert Group on e-Invoicing
http://ec.europa.eu/taxation_customs/resources/documents/common/whats_new/memo_e-invoicing_en.pdf
http://www.trustweaver.com/press/ECOFIN_16032010_analysis.pdf
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e-invoicing platform – ”white-label”-own brandfor banks

E-invoicing platform: bank provides e-invoicing services to clients
INVOICE SENDERS
INVOICE RECIEVERS
Internet bank
Internet bank
Single Sign On
Single Sign On
Bank White labeled
e-Invoice service
E-invoice
Portal
E-invoice
Portal
Payment initiation
File integration
ERP Standard
File integration
ERP StandardVirtual printers
File integration
ERP Individual
File integration
ERP Individual
(file integrations)
Paper to e-Invoice
Scanning
provider
e-Invoice to Paper
Printshops
Bank
Factoring
Bookkeeping
Supply Finance
Billing &
Statistics
Supplier Financing
Cash flow planning
Factoring
Payments
Bank provides value added services
Customer Administration
Via Swedbanks ordinary systems
Support & Maintenance
Via secure webinterface
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Why it is beneficial for a bank to become a e-invoicing service provider?
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Ready customer base
Additional income from existing customers :
Add income e-invoice transactions
Opportunity to use business information to create new value added services
Cash flow forecasting
Factoring
Supplier financing
Billing and statistics
Customers require this service from banks
Customers want to have value added services (as bank service surveys show)
Benefits for banks’ clients
Invoices are integrated with payments
No need to have additional e-invoice provider
Simple interface, no need to invest in complex system for SMEs
Integration with ERP for big customers
Possibility to buy additional services like cash flow forecast
Access to cheaper finance

Future in Russia?
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Coming changes in legislation will allow to use electronic VAT invoices
Questions:
Mandatory data format?
– e-invoices not only required to tax authorities but most of all it is in the interest of business. Mandatory data format may not support / take into account the interests of businesses
Technology neutral approach?
Sinature of data files – datafiles are treated as originals?
-in Europe is is not common as it causes problems:
1) with auditors and tax authorities - they have no resources to work with data files incl producing hunman readable format etc.
2) it sets limitations for e-invoice operator in data processing
=>To transfer data electronically, but to use electronic signature for human readable files, not for data!

Future in Russia?
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We believe that everybody needs the new legislation wich will allow to deal with electronic VAT invoices
We believe that such changes in legislation will create a value added for many businesses – corporates big and small, banks, providers
Electronic communications, B2B and B2C have big future in Russia
Banks will have a special role in e-invoicing - such as it is typical in Europe
This is new business segment in Russia
Large business opportunities for banks

Inga Major
Financial Value Chain Services Director
Tieto, Russia
inga.major@tieto.com

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Tieto inga major_ecr_presentation english

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