Electronic invoicing in Denmark -...

Electronic invoicing in DenmarkExperience and future initiatives

Swedish Alliance for e-businessStockholm March 7th 2006

Mikkel Hippe Brun, mhb@itst.dkChristian Lanng, chl@vtu.dk

Office of Strategic IT, Danish National IT and Telecom AgencyThe Ministry of Science, Technology an Innovation

Agenda

The background and business caseThe infrastructureThe experiencesInfrastructure initiativesThe next initiatives

This is the story of...

How electronic invoicing and electronic payment in B2G eBusiness is implemented in DenmarkHow picking the lowest hanging eProcurement fruits – saves millions

The short versionAs of February 1th 2005 – all invoices to the public sector has sent electronically18 million invoices will be exchangedThe initiatives is mandated by legislation440.000 companies affectedScanning agencies handle the conversion of paper invoicesOASIS Universal Business Language is the underlying standard

The numbers

Invoices sent to the public sector (thousands)

Municipalities 13.421 74%Regions 2.610 14%State 2.200 12%Total 18.231 100%

Authorized employee Employee opening mail Finance department Supplier

Open mail

Send invoice in in-house mail

Pre register invoice.Send invoice in

in-house mail

Approve invoice

Check invoice and approval. Assign

bookkeeping accounts.

Pay invoice

Send invoice in in-house mail

Receive payment

Clear payment

Send invoice in in-house mail

The business case (invoicing)

Each minute saved in invoice handling of 18 million invoices equals 12 million Euro saved

10 minutes handling time is saved using an electronic invoice

120 million Euro

It is estimated that if ordering is also made electronic as much as 17 minutes will be saved in the handling of each invoice

Potential savings: 200 million Euro

VANS-infrastrukturen

ProcessAn invoice is sent to a VAN-operatorThe VAN-operator looks up the EAN-location number in a databaseThe invoice is perhaps sent to another VAN-operatorThe invoice is sent to a public authority

Public authorities

Private companies

VAN

EAN-database

2

3

4

1

VANS infrastructure principles

A VANS-network provides:Shared addressing mechanism (using EAN-location numbers)

Secure exchange of data – once data is received by a VANS-operator (Note that that the data exchange between the customer and the VANS-operator may not be safe and reliable)

Guaranteed delivery of data (once received by a VANS-operator).

Freedom from bilateral exchange agreements

The Scanning agencies

Receive paper based invoicesScan the invoices (throw the paper away)Do intelligent pattern matchingProduce a reduced electronic invoiceCertified companies may act as Read In BureausA maximum of 5 days processing time

Private business Scanning agency Public authority

The standard

OASIS Universal Business Language:International effort to define a royalty-free library of standard electronic business documentsDesigned in an open and accountable vendor-neutral OASIS Technical CommitteeNorth European localization initiativeUK, Sweden, Norway, Finland and DenmarkCommon subset to be uses in cross border scenarios

UBL 1.0 order-to-invoice

The full picture ultimo 2005

Public authorities

Private companies

Read In Bureaus

VAN

Easy Account system

Upcoming messages

Full digitalization – a challenge

Electronic Invoices to the Public sector in Denam ark

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

feb-05

m ar-05

apr-05

m aj-05

jun-05

jul-05

aug-05

sep-05

okt-05

nov-05

dec-05

jan-06

Months

Invo

ices Scanned Invoices

Native XML Invoices

The biggest volume is in the private sectorCompanies between 10 – 99 employees

66%

10%7%

17%

0%

10%

20%

30%

40%

50%

60%

70%

Danske virksomheder (B2B) Udenlandske virksomheder(B2B)

Den offentlige sektor (B2G) Forbrugere (B2C)

Kilde: KPMG 2005.

The smallest companies has the largest share of business documents

41%

15%

44%

10-19 20-49 50-99

Fordeling af transaktionsvolumen for virksomheder imellem 10-99 ansatte (samlet volumen 191,1 mill. forretningsmeddelser)

KPMG 2005

Distribution of transaction volume for companies between 10 and 99 employees. (Total volume is 191 million orders and invoices)

EDI Networks

B2Bportals

Banks Internet

Public Sector

Bridging existing networks

SME’s

Open standards for document transactions

Shared addressing ofwebservices

Large Enterprises

Børsen ITinnovation Monday February 21th 2006

Vision

It should be just as easy to exchange a business document electronically as it is to send an email.

Business Requirements

Short term: Reuduction in barriers to SME’sSME’s must be able to:

Send and receive business messages with no other infrastructure than an internet connection.Send and receive business messages with standard off the shelf business software.

Long term requirements: Scalable infrastructureThe infrastructure must offer a platform that can be the framework for data exchange in the public as well as the private sector.The private sector and the public sector are invited to registerservices and exchange any message (public standard, proprietary or open).

Elements in solution

Master UDDI registryReplicated / runtime UDDI registries

Interoperability profiles (WS-* based)Open standards

Digital certificatesSystems Developer KitClient Reference implementationMarketing

Via partnersPublic campaignseDag

Registry structure

Lookup in UD

DI based on

ID and service nam

e

ISP1 Lookup in U

DD

I based on

ID and service nam

e

order

ISP2

UDDI

invoice

National Master UDDI

invoice

order

Public authority

Replication from

Master UDDI

Replication from

Master U

DD

I

Lookup in UD

DI based on

ID and service nam

e

Stat

ens

IT-n

et

UDDI

invoice

order

Replication from Master UDDI

Private company

Private company

Private company

UDDI

VAN

/ Pa

rtner

Infrastructure i 2007

Public authorities

Private companies

VAN

EAN-database (eDir)

Gateway Registry

ISP

UDDI

Parte

ner UDDI

UDDI

State IT-Net

Client strategy

The Ministry will develop an JAVA and WIN Software toolkitThe toolkit can be used in

Online bank solutionsERP-systemsstand alone clients

The Ministry will provide a reference implementation of a generic client.

This client will not be supported by the Ministry3rd parties are invited to make commercial versions

VTU basic framework clientCan also be implemented by 3rd parties as stand alone or web application

Local folder

• Built on SDK

• Get outgoing docs from local folder

• Put ingoing docs into local folder

• Validate messages and signatures

• Accept and reject messages

• Lookup endpoints in registry

• Encrypt and sign messages

• Send to / get from SMTP server

ERP systems Generic clientSMTP-server

Registry

ERP HTTP client implementation From system vendor

ERP systems

Message Handler

Registry

• Validate messages and signatures

• Accept and reject messages

• Lookup endpoints in registry

• Encrypt and sign messages

• Send to / get from MSH server

North European input to UBL 2.0

OGC

Finland

Sweden

NordicUBL 2.0subset

Denmark

Norway

UBL 2.0 sourcing-to-paymentud Use Case

Customer

Supplier

Sourcing

Ordering

Billing

Payment

Deliv ery Party

Originator Party

Buyer Party

Creditor

Despatch Party

Payee Party

Debtor

Self Billing with self billing credit

note

Cataloque prov ision

Buyer initiated sourcing

Punchout

Self billing with credit note

Billing with credit note

Billing with debit note

Statement of Account

Seller Party

Fulfilment

Fulfilment with Despatch Adv ice

Fulfilment w ith Receipt Adv ice

Catalogue Managing Party

«extend»

Questions

mhb@itst.dk

Legislation and statutehttp://www.oio.dk/XML/standardisering/eHandel/materialer/OIOXMLeInvoice

Frequently asked questions:http://www.oio.dk/XML/standardisering/eHandel/materialer/OIOXMLeInvoice/faq

Online Validator:http://purl.oclc.org/NET/OIOXMLeFaktura/validator

InfoStructureBase – repository / registryhttp://isb.oio.dk