Benefits of electronic invoice

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Benefits of electronic invoice

  1. 1. Benefits of electronic invoice Mikhail Sklyarov Head of finance division METRO Cash & Carry Russia
  2. 2. METRO Group structure at a glance <ul><li>International, high-performing retailing company </li></ul><ul><li>Successful DAX-30 enterprise </li></ul><ul><li>About 2,100 locations in 32 countries </li></ul><ul><li>Approx. 300,000 employees from 150 nations </li></ul><ul><li>Operational strengths of the four sales divisions </li></ul><ul><ul><li>Metro Cash & Carry: self-service wholesale </li></ul></ul><ul><ul><li>Real: hypermarkets </li></ul></ul><ul><ul><li>Media Markt and Saturn: consumer electronics stores </li></ul></ul><ul><ul><li>Galeria Kaufhof: department stores </li></ul></ul><ul><li>Active real estate management with independent profit centre </li></ul><ul><li>Focused on profitable growth as well as sustainable and consistent value enhancement </li></ul>
  3. 3. METRO Cash & Carry Russia Key facts: Operative: Sales 2009, EUR Employees Stores 52 13.000 2.6 bn 2001
  4. 4. Content 2 E-invoice as part of EDI 3 Implementation of e-invoice 4 Summary 1 Benefits of e-invoice
  5. 5. 1-3 thousand hectares of forest is cut each year to produce paper for VAT invoices
  6. 6. <ul><li>The weight of this paper is 300 tons </li></ul><ul><li>To store this paper we need 1000 pallets or 30 trucks or 5000 sqm warehouse </li></ul><ul><li>Official requirement is to keep documents at least 5 years </li></ul>MCC RU store 60 million pages of VAT invoices per year
  7. 7. Comparison of e-invoice and paper process Retail company Supplier ERP system Invoice Documents receiving Paper Process Retail company Supplier EDI invoice EDI provider ERP system EDI invoice EDI Process ERP system ERP system Invoice control
  8. 8. Benefits of e-invoice ++ - Master data quality ++ - Invoice storage ++ - Time for invoice processing ++ - Lost paper invoices - + Investment + - Invoice check and approval ++ - Invoice entry + - Document delivery E-invoice Paper invoice
  9. 9. Cost comparison for invoice processing
  10. 10. <ul><li>Electronic document is not changeable </li></ul><ul><li>Secure access to the information for Tax inspection </li></ul><ul><li>Checking of electronic data is faster and more convenient than checking of paper invoices </li></ul><ul><li>Protection of environment </li></ul><ul><li>Modernization and competitiveness of the economy </li></ul>Government Electronic document flow implementation will bring significant benefits both for business and for Government:
  11. 11. EDI advantages Electronic document flow implementation will bring significant benefits both for business and for Government: Business <ul><li>Invoices are issued electronically, less efforts and mistakes for document creation </li></ul><ul><li>Fast exchange of information </li></ul><ul><li>Nearly no cost for document delivery </li></ul><ul><li>Invoices are processed automatically </li></ul><ul><li>The lack of mistakes during invoice entering and processing </li></ul><ul><li>Little invoice storage costs </li></ul>
  12. 12. Content 1 Benefits of e-invoice 2 E-invoice as part of EDI 3 Implementation of e-invoice 4 Summary
  13. 13. EDI is a standard of electronic message exchange between supplier and retailer ORDERS – Electronic order RECADV – Confirmation of delivery DESADV – Dispatch advice INVOIC – E-invoice * Together with paper EDI Provider 90% 30% 2%* 30%
  14. 14. Content 1 Benefits of e-invoice 2 E-invoice as part of EDI 3 Implementation of e-invoice 4 Summary
  15. 15. Country r ollout of EDI Invoice Germany Live 01/1989 France Live 12/2005 Belgium Live 12/2005 Hungary Live 10/2007 Russia Live 07/2009 Portugal Test 01/2008 Live 02/2010 Spain Test 11/2008 Live 01/2010 Turkey in progress Poland in progress RU TR PL DE HU FR PT ES BE UA
  16. 16. EDI invoice implementation in Russia (in parallel with paper) <ul><li>Aim of the project: Implement EDI invoice with suppliers. As soon as necessary law changes are adopted immediately switch to EDI invoice without paper. </li></ul>Current status: 63 suppliers are in production, another 600 suppliers are in test including Kraft foods, Nestle, WBD. Target 2010: receive 5% of the invoices by EDI
  17. 17. EDI process together with paper Paper invoice Supplier Reconciliation of EDI and paper invoice Retail chain Invoice payment Input of total data Goods receiving data Store Archive EDI invoice Paper invoice
  18. 18. Legislation is still an open issue Make amendments to article 169 of Tax code Make amendments to accounting law From legislation point of view E-invoice = Paper invoice
  19. 19. E-invoice pilot with provider Taxcom <ul><li>The following processes have been tested: </li></ul><ul><li>Creation of E-invoice </li></ul><ul><li>E-invoice interchange between supplier and customer </li></ul><ul><li>E-invoice request by tax office </li></ul>E-invoice format remained an open issue
  20. 20. E-invoice format should be EDI compatible to be integrated in EDI process ORDERS – Electronic order DESADV – Dispatch advice RECADV – Confirmation of delivery INVOIC – E-invoice
  21. 21. Content 1 Benefits of e-invoice 2 E-invoice as part of EDI 3 Implementation of e-invoice 4 Summary
  22. 22. Summary <ul><li>E-invoice is a strategic project which is supported by business as well as government </li></ul><ul><li>E-invoice brings a lot of benefits for all parties involved </li></ul><ul><li>Legislation and data format are main open issues </li></ul>

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