Germany gearing up for B2G e-invoicing rollout

b2g-electronic-invoice-in-germany

On 13 July, Germany’s Federal Cabinet approved a bill governing e-invoicing in public procurement. The legislation promoted by the Federal Ministry of the Interior (BMI) is designed to transpose into national legislation Directive 2014/55/EU, which requires all Member States to adopt e-invoicing in the public sector by November 2018.

With this draft bill, the German Government creates a legislative basis for receiving and processing e-invoicing for all federal public entities. However, the different regional authorities (Länder) and municipal agencies (Kommunalstellen) will have to roll out their own e-invoicing standards, although the most likely option is that they will adapt to the same regulation in order to favour interoperability between administrations and facilitate adaptation for suppliers.

The next step for the Interior Ministry will be to tackle the technical standards for e-invoicing, a task on which several bodies and commissions specifically created for the purpose are now working. Moreover, we still have to wait for the European Standardization Committee (CEN) to publish the interoperable European standard so that the German government can adapt it to its own format, designated “XRechnung.

A general trend

The rollout of e-invoicing in public procurement processes affects all Member States, so Germany is not an isolated case. As it stands today, some countries such as Spain, Portugal or Italy already require the use of this technology in the public sector and, when the time comes, they too will have to switch to the standard required by the Union Others, like Germany, will work directly to transpose the Directive and declare the system mandatory as soon as the European standard comes into force.

In this regard, the Permanent Observatory on e-Invoicing, a working group set up by EDICOM, is studying the progress made across Europe. This ongoing analysis keeps the Global E-Invoicing solution permanently updated at all times and operational for any country.

The road to technological transformation in Mexico

Mexico-Digital

Mexico can currently pride itself on being one of the most advanced countries in digital control. The latest development is creation of the Digital Documents Receipt Certification Provider (PCRDD), which simplifies business management and tax administration for companies, acting as an “electronic window” that unifies procedures. However, to get here it was necessary to carry out a real paperless revolution over the past 12 years

It all began in 2004, when the Tax Administration Service rolled out the legal framework and operational regulation for Mexico’s version of the electronic invoice – the Digital Fiscal Receipt (CFD). The system gradually became increasingly important. However, this was just the starting point for the current e-invoicing setup.

It was in 2010 when, based on the CFD, the government created the e-invoice we know today as the CFDI (Digital Tax Receipt via Internet). From the outset, this new billing model required the services of an Authorized Certification Provider (PAC) to validate the document and submit it to the SAT. This is a more secure system with a greater degree of control than the previous setup and now allows taxpayers to outsource their management.

But the real turning point in Mexico’s technological transformation took place in 2011. That year, the SAT imposed mandatory use of CFDI for companies earning more than 4 million pesos. Meanwhile, the rest were able to keep on using traditional methods or the CFD.

Sometime later, in 2014, the obligation was progressively extended to all taxpayers with annual incomes above 250,000, along with electronic issuance of payroll receipts. Electronic billing in CFDi format quickly became widespread and the old CFD finally disappeared. Mexico went on to become, along with Brazil, a world leader in the use of this technology.

Beyond e-invoicing

The expansion of e-invoicing prompted the SAT to venture even further into the new paperless technologies in order to simplify tax compliance. Last year saw the rollout of electronic accountinv for individuals and corporations. Moreover, the tax withholdings document also became digital.

In addition, the recently created figure of the PCRDD continues along the path of digital evolution the country has followed for the last 10 years.  Today, EDICOM is the only Provider of Technology Services for tax purposes accredited and authorized to provide service under the aegis of the PCRDD.

With this new figure, the SAT delegates the receipt of digital documents, their semantic and syntactic validation, certification and declaration to simplify tax procedures.

For now, taxpayers with PCRDD can now submit the DPIVA electronically by a fully automated process. Nevertheless, the SAT plans to include new digital documents soon. A breakthrough that will serve to save time and economic costs for Mexican businesses.

What are the advantages of the NHS eProcurement Strategy?

The e-procurement initiative rolled out by the National Health Service (NHS) makes the British healthcare system a technological front runner. With the eProcurement Strategy, all transactions, purchasing processes, product traceability and communications are to become electronic. A great digital leap forward that will benefit both the NHS and its trusts and the businesses providing goods and services.

 

Benefits for the NHS

By automating procedures and doing away with the use of paper throughout the supply chain, the NHS will save between 5000 and 8000 pounds per bed. Moreover, the Department of Health (DoH) also forecasts that once the strategy is fully implemented there will be 10% fewer wasted products. This will be possible thanks to the electronic item tracking by applying GS1 coding, which incorporates a product tagging system for optimum stock control and management.

Another advantage of applying this initiative is that the user information on products will be much more accurate. Bear in mind that the strategy includes the implementation of electronic catalogues or data pools, such as EDICOMData, whereby suppliers can share all their product information in real-time with the healthcare organizations. This will mean greater safety for patients, as mistakes are avoided and the use of medicines will be facilitated with more specific instructions.

However, the main change ahead for the NHS is enhanced efficiency, productivity and security. Digitization will simplify management, significantly reducing the number of mistakes made in manual processing.

 

Benefits for NHS suppliers

All companies providing goods or services to NHS trusts are required to adapt to the eProcurement Strategy. However, rather than an obligation, these suppliers should see implementation of the initiative as part of the drive towards digitization. The rollout of e-communications, through PEPPOL and GDSN, is an open door to international trade and optimization of other business activities.

One of the most outstanding benefits of the e-procurement strategy is that in the medium term businesses are going to appreciate a significant reduction in costs. The saving is mainly due to process automation, which will boost productivity, but also to the elimination of paper. These companies will no longer have to invest in printing, postal forwarding or physical storage for the documents exchanged with the NHS public hospitals network. Something which, moreover, will make them more sustainable and environmentally friendly.

As occurs with the NHS trusts, the e-processes will cut down the number of errors and enhance security. To all this we must add that the traceability throughout the supply chain will furnish businesses with such relevant information as the current status of their invoices.

 

Full information on the eProcurement Strategy

If you would like more detailed information on the aims of this initiative and the deadlines for rollout in companies, we recommend you download this free White Paper on the NHS eProcurement Strategy (available in English and Spanish). In addition, you can attend the event Procurement In Healthcare (PIH) Show, being held on 28 September in London. This international benchmark event for the health sector will feature technological experts in the field, like EDICOM, demonstrating solutions to enable businesses to adapt to this process easily and maximize the benefits.

EDI Academy – the OFTP protocol

Communication protocols are a key aspect in any EDI relationship. As we explained in this post, different systems for transmitting information between trading partners have arisen over time. One of these is the Odette File Transfer Protocol, better known by its acronym OFTP.

 

How did this standard come about?

The OFTP communications protocol is linked with the automotive sector. This industry was one of the pioneers in the rollout of EDI technology during the 70s in the United States. This is because automobile companies were not only growing, but were also obliged to exchange large amounts of information constantly so that their supply chain could function properly.

With the passing of time, this need to share data with a plethora of manufacturers and suppliers remained steady, and even began to increase. We must bear in mind that suppliers in the automotive industry forming part of a production chain may be widely dispersed. However, it is very important that all members work as a team to meet the high quality standards demanded by the Just in Time management model that holds sway in this sector, and which calls for permanent and fluid exchange of massive data volumes and large files.

In the 80s, these particular features led Odette, the automotive industry association par excellence in Europe, to work on a specialized communications protocol able to adapt to the specific features of these companies. This is how, in 1986, what we know today as OFTP came into being.

Soon, the standard spread throughout the European automotive industry and today remains the most widely used in this region. In addition, some companies in other industries such as pharmaceuticals and banking also use it, albeit more anecdotally.

 

OFTP upgrade

Technology breakthroughs and the current needs of the automotive business prompted Odette to launch another version of the protocol in 2010, designated OFTP2. The EDICOM team actively participates in the working group, which continues to explore improvements. Our role is to propose new technical updates and enhance security.

Among the advantages of this communications protocol we can highlight its adaptation to the automotive industry. The standard allows users to encrypt and compress files so that it is possible to share not only EDI messages but also CAD files and other large-volume documents widely used in the sector.

Upgrading the OFTP2 protocol provided greater flexibility and robustness to the communication system between trading partners, providing benefits such as:

  • Higher data compression capacity.
  • Assuring reliability and management of secure communication via Internet among trading partners (SSL / TLS, identification, e-signature, encryption, etc.)
  • Handling very large files (> 500 GB)
  • Longer length file descriptions.
  • Availability of additional character sets (Chinese, Japanese …)

Netherlands government to impose e- invoicing from 2017

The Netherlands now joins the list of European countries due to roll out Public Sector e-invoicing in the coming months. As of January 1, 2017, the central government will only accept electronic invoices in XML format, as announced by the Ministry of Economic Affairs. This means that suppliers must adopt this system before the deadline provided. It is important to note that the requirement affects contracts signed as of January 1, 2017. Suppliers with contracts in force with the administration signed prior to this date will not be obligated, although they are free to join this electronic system voluntarily at any time.

Among the reasons that prompted the Dutch executive to implement this paperless initiative is Directive 2014/55/EU, which requires all Member States to adopt e-invoicing in public procurement processes as of November 2018. This way, the Dutch government anticipates the regulation, just as other countries such as Spain, France or Italy have done.

In addition, with the adoption of e-invoicing the Minister of Economic Affairs aims to reduce bureaucracy, simplify relations with the public sector and improve tax control systems. But above all, the focus is on the economic savings that this may bring to the public coffers, with annual cash savings of roughly €10 million forecast.

 

What is the e-billing situation in the Netherlands?

Government initiatives on e-invoicing in the Netherlands began in 2009. However, since then, the government has carried out several technological advances that have made the current regulations possible. The system becomes mandatory for the Central Administration and its suppliers as of 2017.

The current requirements of this system allow the use of two standards. On one hand, UBL-OHNL, a variant of the UBL-XML standard specifically developed for the Dutch public authorities and designed for the issuance of invoices for goods and services provided to the administration. And on the other, the XML-SETU language, for issuing invoices related to the hiring of temporary staff and services in administrations. However, both standards are destined to coexist temporarily in the coming years, as the government plans to adopt the Interoperable European Standard as soon as it becomes available.

 

Connection with Central Administration

One of the most complex issues in developing e-invoicing projects is connectivity with the Public Sector. In this sense, the Dutch government provides different systems that adapt to the technological capacity of the supplier:

  • By web form. This option is only recommended for small-scale suppliers with a very low billing volume, as the entire process is manual.
  • Through the official e-invoicing HUB, designated Digipoort. This is the most interesting option for suppliers issuing a medium to high billing volume, as the whole process takes place automatically. It also guarantees connectivity with any state agency.

To work with Digipoort, suppliers are recommended to engage the services of a company specializing in e-invoicing, such as EDICOM. This way, they can roll out a scalable solution integrated with their own ERP or management system, with no need to modify internal working procedures.

 

EDICOM, leader in e-invoicing

With over 20 years of experience, EDICOM is one of the leading international suppliers in the implementation of this technology. Creation of the Permanent e-Invoicing Observatory allowed the company to create a global solution, which is constantly updated and ready to issue e-invoicing in compliance with the requirements of more than 60 countries worldwide.