How to prepare for electronic invoicing (e-invoicing)

Electronic Invoicing or E-Invoicing is slowly but surely taking over the world of finance. Join host, Jake Jones and guests, Dennis van der Graaf, Justyna Bielak, and Sammy Guirguis as they discuss what E-invoicing is and how to prepare your business to use it. 

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Welcome to Finance in the Clouds. Modern finance is broken, forcing finance and accounting teams to work like it's 1985 year excel was invented. Here we talk about the struggles finance teams face in fast growing companies and discuss how they can spend less time surviving and more time in the clouds. I'm your host, Jake Jones, multimedia producer and brand influencer at Zone & Co and I'm joined this week by Dennis Van Der Graaf Product Owner in Engineering for Zone & Co. I'm also joined by a Justyna Bielak Product Owner in Engineering for Zone& Co and Sammy Guirguis Regional Director Apps APAC in Sales at Zone & Co. Thanks for joining me today, guys. Thanks for having us, Jake Really excited to be here. E-Invoicing is slowly but surely taking over the finance world. Today, we are going to discuss what it is and how to prepare your business for e-invoicing. So thank you all again for joining me today, guys. Let's talk about e-invoicing. You are all experts in your own right on this topic. So before we really begin, I just want to give you guys a second, give you some space to introduce yourselves. Tell us a little bit about who you are and what do you do for us here at Zone & Co. So, Dennis, why don't we start with you? Thank you. Yeah, so I'm a Dennis Van Der Graaf. I'm working currently as a product owner at Zone and Co. I did start a approximately six years ago when the company on the outside was still Fast Four. I recently we did merge with Zone & Co and now are one big family. On a daily basis, my job is basically to to work with our SuiteApps. One of the SuiteApps is ZoneApprovals. Sorry, ZoneCapture. We'll talk about it today. And basically what I do every day is making sure that the application is running smoothly and is improving and advancing over time. So we do offer all the benefits that the customers are expecting from our SuiteApp. Great. And Justyna, what about you? Hi, my name is Justyna. I joined Fast Four two years ago as an application specialist. So I have experience in implementing all of our SuiteApps. And during that time, I had an opportunity to get really familiar with e-invoicing. So this is the reason why I'm here today with you to share some experience. A few months ago, I joined Dennis as a product owner. So now in Zone Family, I'm part of the product team. Thanks to Justyna and Sammy, bring us home, tell us about yourself. Hi, Jake. Thanks, guys. I'm super excited to be here. My name is Sammy Guirguis. I'm actually based in sunny Australia down under here, and I'm the regional director for the Suite Apps, and I look after the APAC and all the APAC customers. I've actually been one of the pioneers and been working with NetSuite since 2003 here in the APAC and we work with a lot of customers and we're just really looking to help and enhance the customer's NetSuite experience. So thank you again, Jake. Excited to be here. It is absolutely great to have all of you really, really excited to hear more about e-invoicing. This is something kind of a newer topic to me when when our team first kind of started talking about wanting to discuss this. So let's, let's get right into the topic at hand. What is e-invoicing? Let's start with there. Really interesting question, Jake. e-invoicing is basically a global network, and that is slowly replacing the traditional way of how companies are currently sending and receiving invoices. In many cases, an invoice is currently sent on paper or over email as a PDF attachment. And that is basically how many companies are currently operating. An e-invoice is basically a data set that contains all the information from the invoice that is sent or received. And this data set is posted on the e-invoice network with sender and receiver IDs. And due to these parameters, the network knows exactly where it should be delivered, who is the vender that should be receiving it or who's the customers who should be receiving it. The delivery of the data set is happening fully automatic and in many cases this happens within a few seconds. And due to the fact that the sending and receiving is automated in full. So it is a fully automated process. Everything can be started with just a click of a button or with a full automated process on the side of the company, all depending on the business needs. So the e-invoicing is basically a more major way of sending and receiving your invoices without actually touching your paper or reading a PDF. So, Dennis I'm hearing a lot of positives. I'm hearing a lot of really convenient. It sounds like convenience to me, but what are some of the other benefits that e-invoicing can provide to businesses and people, customers? Also a really good question. So in this case, the e-invoice does provide benefits for three different parties and that's the interesting part about e-invoicing. And so the first party that we can talk about is the sender. So who's sending the e-invoice, has a benefits because as soon as they would send out that e-invoice, they are certain that their invoice will be received by the customer. The customer has no option to reject in first instance an invoice and the send- the sending party is also receiving feedback information about the fact is my invoice delivered yes or no and that will take away all the potential discussions that you could have about effects. What's the invoice or not? That question is simply not there anymore. Even if the receiving party would reject for some reason an invoice because something is not correct and the sending party will still be notifying that their information is not received or in this case rejected. So this is of course really interesting for the sending party to have the full control and our audibility, traceability inside your own application. The second party that is also having benefits is the receiving party. Why do they have that benefit is basically because the data that we sent is structured. It is dependent, or in this case, holding all the data and that the receiving party needs to fully automated processing of the invoice. So they know exactly what are the totals what are the lines that are enforced. And if you have a smart system, the system should be capable of reading that data and with the data create automatically the invoice inside your ERP system. Also, of course, another benefit is that there is a lower chance of scam or fraud invoices with this behavior. The third party, and that's I think, the most likely to party guest most interested in the e-invoice action is the government. And the governments that can do many things with e-invoicing and depends on country. So some countries go really deep with what kind of information they would like to see and what kind of control they would like to have. And some countries are less. I would basically e-invoice is going to provide the governments the possibility to see and eliminate tax gaps, that are currently of course existing in many countries, some countries more and some countries less. The government will have some control about what's happening and what was invoiced. And there are three models that they are using. Um, it could be a hybrid model where simply they will have some part where they can see that something is sent but no deeper control but it could be partially. Then we have post-audit model and that model basically means that the governments can see they see basically anything that they would like to see. So they have full control and can see all the invoices. And due to that can exactly if everybody is filing the correct taxes. So also for the governments, big benefits and depends of course in which party you are. But I think for all three parties the benefits are really clear. It's a safer faster and less manual work needed. Does e-invoicing help improve commerce between countries potentially even? Does that allow for easier business between countries? Yeah, I believe strongly that, that it does. Due to the fact that's the starting point of an e-invoice is basically in data sets. The data set of defining exactly what the e-invoice is about. So what are the totals? What are the lines that you're invoicing? What are the products that are on the invoice? And that data set is provided to the e-invoice network and depending on the network that's the receiving party is on the data will be translated into their local standards. So at that point when the data is received by any customer, at that point the system will have translated all the data correctly. So they will see in their system the correct totals in the correct places. They will see the correct lines the correct descriptions for the products that you are sending. And so that that really simplifies the communication between two countries. And of course when both countries are speaking English, it is still really very straightforward. But of course, there could be differences and where text should be entered, for example. But if you are doing business with somebody in China or in a country that has a completely different language, then it can be really complicated. How should I translate the data? What is it representing what I'm reading here? And that is something that will be taken away with e-invoicing. Obviously a lot of parties benefiting from what this can do. And it's actually interesting to bring this up because this is kind of what got us into this conversation is different countries are using it a little bit differently. You've kind of mentioned some models here and some countries it's it's mandatory. Some countries it's still kind of working its way up. And so I want to ask the question here. What is the expectation of the future with e-invoicing? Is this something that's going to possibly become mandatory everywhere? And then what happens when it becomes mandatory? So Justyna why don't you take that? Yeah, sure. And let me start from Europe, because I think here e-invoicing is developed in the best way because we already have multiple countries here in Europe where e-invoicing is already mandatory. So at this moment, I think the most common model is when e-invoicing is mandatory in the business-to-governments flow. So it means if you're dealing with the public sector, if you want to deliver invoice to any public company, they no longer accept emails with PDFs or paper invoices. You really need to send an e-invoice. Otherwise, they will not accept your invoice anymore. And yeah, basically you're not going to get paid. So it's really hard requirement. So for example, Norway, one of our European pioneers. They are adopting this mandatory business-to-government e-invoicing. So they started from that I think around 2019. 2009, sorry. And then what's very interesting in Norway is that companies started to using it more and more also in the business-to-business flow. So like in Norway, it's not mandatory in business-to-business flow, but a lot of parties see benefits from that and they basically start using it on a daily basis. Also in this, in this flow when, where it's not mandatory. And exactly the same situation we see in Finland, Sweden, Denmark. So business-to-government flow is mandatory, but more and more companies are using it even in this business-to-business transactions. Yeah. On top of that, I think very interesting case is in Finland. So eh lately they have they have a right to request e-invoice from another company. So the company can decide from today I accept only e-invoices and then the supplier, they don't have a choice. They really need to provide e-invoice. Otherwise, you cannot run your business anymore. So we see like more and more countries in Europe are going live with e-invoicing in business-to-government sector. They are also expanding to, to business-to-business sector. We also have few countries with this clearance model. So the government is really taking control over the whole flow, like Italy, for example. In Italy, we have business-to-government, to business-to-business and even business-to-consumer flow mandatory. So they really find positive results from this, from this flow. And they they made mandatory e-invoicing in the in the whole flow. Yeah. Regarding the USA maybe, I think there's no clear timeline when it's going to be mandatory but we see some, some projects lately that aim to build e-invoicing networking in business-to-business flow. So they see benefits and I think they are trying to so introduce some flow there as well. Yeah. And lately we also see a lot of changes happening in Australia. But I think this topic can be further explained by Sammy. Thank you, Justyna, that was a nice segue right there. Yeah, look, it's pretty exciting here in Australia regarding e-invoicing because from the 1st of January, the Commonwealth Government made it actually mandatory to actually if you're doing business to government, which is B2G, to actually use e-invoicing. And the government was actually making those e-invoices payable within five days and then basically paying interest on any of the payments as well. In the different states and territories, we've got good old New South Wales which has committed to, to e-invoicing and from the 1st of January this year, the 1st of January 2022. It's actually a legislation and you have to use a e-invoicing if you're dealing with the New South Wales Government or you're a business in New South Wales and good old Queensland as well. They've also joined from the 1st of January, but by the 1st of July, which is a new financial year. If you're doing any B to G and dealing with any government organizations or agencies, you are going to have to be e-invoice compliant as well. So the local governments really grabbed the e-invoicing imagine initiative. So that way when, if you are dealing with different countries, as well as, as Justyna said in Europe or in the US, your business will have to be invoice e-invoice ready as well. Yeah, that's, that's so interesting to hear just how each country is kind of taking this approach and using it and starting to enforce it as we've talked about. And it's almost like it's spreading a little bit, which is really interesting to see. And so, so Sammy, how are businesses, how our customers and partners are responding to starting to using invoice, e-invoicing in Australia? Yeah, that's a great question, Jake. We actually were discussing e-invoicing with a lot of our Australian customers and a lot of customers that did deal with government bodies probably about 18 months ago. So the sort of excitement started back then, but a lot of businesses didn't know that from the 1st of January 2022 you actually have to be e-invoicing compliant and a lot of these businesses were looking at new systems and a lot of our customers use NetSuite. So we were speaking to a lot of these customers and a lot of them, you know, we're a little bit worried that, you know, they wanted to make sure that they were compliant. So there's been a lot of businesses that have actually taken it on board and sort of adjusted and pivoted and realized that e-invoicing is here to stay and it's the only way that they can, they can get paid. If they're going to deal with government organizations and with the ZoneCapture it's actually built on an the NetSuite platform so there's no integrations. They don't have to leave the NetSuite screen and they can actually become e-invoicing compliant by actually just just talking to us and speaking with us so it's been, you know, taken up pretty responsibly in Queensland as well. And now because there's only a month to go till the 1st of July, there's a big buzz in Australia sort of, you know, there's just been a change of government and people are thinking, well, you know what, I think things are going to start picking up and we better become e-invoicing compliant. So we are getting a lot of inquiries and there's a lot of businesses sort of just tapping their other neighbors on their shoulder and saying, oh you guys, you guys accepting e-invoices, you guys sending e-invoices so yeah, it's pretty exciting in the APAC region at the moment with the e-invoicing. So it's great. It's great that there's such a positive buzz around it. That's really, really exciting as you kind of all hinted at. You know, it's not necessarily happening in the U.S. or in every country yet, but it is something that's growing in popularity. And obviously it has a lot of great benefits, especially for the government. And, you know, really once the government starts to latch on, it's something that's going to stick. And as more governments see it working for other governments, it's just going to continue to spread. So that's that's awesome. But that kind of gets us to our our real question, kind of the topic of our show. How do you prepare for e-invoicing? Dennis, why don't we start with you? What, how can our customers how can our business partners start to prepare for e-invoicing? Yeah. Yeah, preparing for e-invoicing sounds really difficult. Sounds like and really painstaking task. But I can tell you it is basically pretty simple and straightforward. It does not take a lot of time and resources do to get to the point that e-invoicing is available inside your ERP system. Basically, it requires two steps only. The first step is that your company must register on the e-invoice network. And this step is done through an e-invoice provider. The provider will make sure that your company is registered on a network and it's connected, to the correct network. So that's one step simply filling in a form or a reform that that process will start will take a few days, sometimes weeks. But it's pretty great not really painstaking. The second one is that, of course, your ERP system must be prepared to actually being able to receive and send your e-invoices and that depends, of course, on the system that you are using. So each system will have different implementation times and different protocols. But I can tell you with NetSuite or if you are using NetSuite, you can simply install our ZoneCapture. And that installation is really straightforward, really quick and within no time you are able to send and receive that e-invoices. So as mentioned by Dennis, we are talking about e-Invoicing network. And just to clarify, we have multiple networks around the world, but here in Europe we see the most used network is PEPPOL. So a lot of European countries are already integrated with PEPPOL and we see and more and more countries even outside Europe are joining PEPPOL. We have Japan, Singapore and Australia lately joined. So this is, I think, one of the biggest network that is becoming global. And on the top of that, we have also some country specific networks so like for example, in Norway, we have a special type of e-invoices, EHF, so they have their own country specific registration but they are also connected with PEPPOL. So at least at this point, the more countries will join PEPPOL network, then the e-invoicing flow will be more smooth. Absolutely. Well, that's that's a relief to hear that it's such a simple process, obviously two very crucial steps there but how can you prepare your customers and your partners to be able to accept and exchange e-invoicing? This process, of course, is a little bit different for customers and vendors. So both parties do need all their communication. But basically when you registered your system, you are registered and you are good to go. At the moment, you would like to get the word out. So we would recommend, at that moment, to create a mass publication. And one mass publication will be directed to your customer and one will be directed to your vendors. Your vendor will be really straightforward because you simply are going to announce to them, I'm now currently able to receive your e-invoices through the e-invoice network. This is my end point ID. From now onwards, I would like to only receive e-invoices and not an paper invoice or PDF invoice anymore or simply email because I'm not going to be able to pay, for example. So you can also enforce it if you would like to. So that is a really simple, straightforward communication. With the customers, it can be a little more complicated. Because you would like to send your invoice also automatically to your customer. And that takes a little bit of more work because you need to figure out two parameters. You need to know from your customer what is your endpoint ID because you need to know where do we need to send it to? And of course you would like to know on which network they are. Because that's a parameter you cannot find in our application and that will make sure that the e-invoice is delivered. And so basically you would need to start a mass communication stating that you are now registered on that network and request your customers to find their endpoint ID on their network that they are registered on and basically when you get that feedback you will answer everything in your system and from that point onwards the system will be capable of sending automatically that information. Excellent. Excellent. Justyna, wanted to ask you, since, you know, you're kind of a subject matter expert with e-invoices, how does an e-invoice get delivered? Is it just email? Are there lots of different methods? Just talk about that. Yeah, sure. So let me indeed compare it with delivering emails. So to be able to deliver an email, you need to know an email address. You need to know where your email should be sent. And it works similar with e-invoicing. So you need to know where your your e-invoice needs to be delivered. You need to know kind of e-invoicing address. So it's a unique identifier with which you are registered in the network. Well Dennis already mentioned, he called it End Point ID indeed we call it End Point ID or participant ID. So unique identifier with which your company is registered in the network. What number can it be an identifier? It depends on the country, but it's usually a VAT number, tax indetification number, organization number. Something unique with the unique number with which you are registered in the e-Invoicing network. So as long as you know this number, this is your address, this is how you are the starting point to be able to deliver e-invoice. So I can give an example how we do it in NetSuite. You create a standard invoice in your ERP system mentioning this end point ID, this participant ID of the recipient, and then we submit your request to the e-invoicing provider. So for the integration that we built between ERP system and invoicing provider. So then the certified e-invoicing provider is responsible to prepare this actual e-invoice. So we gather all information from your ERP system. All information needed to be able to create e-invoice and e-invoicing provider knows all country requirements, country-specific standards, and they formulate this actual e-invoice. So they make sure the data is translated correctly and of course they check if they can reach to the recipient. So they are checking if indeed your recipient exists in the e-invoicing network. And on the top of that, there are some additional checks. Like, for example, if we use a European PEPPOL network an e-invoice needs to follow some local standards, some basic information are being checked, like validation of tax numbers. If all calculation on the e-invoice is correct. And it's also possible to attach additional documentation. So like for example, our tool by default is also attaching the PDF invoice. So it's like the, once e-invoicing provider has the full information formulated external file. Then they send it via e-invoicing network to the dedicated and end point ID, participant ID. So it's all data is correct, e-invoice is being delivered and you receive back a confirmation the status change to deliver it or is it still in transit or if maybe your recipient rejected e-invoice for some reason and that's also possible, but you get the actual status update so you are, you know, exactly what is happening with your e-invoice at every point. That immediate feedback just is amazing to hear about. And I can only imagine as a business owner knowing exactly where that invoice is. I know, I know I've had invoices get lost in the loop every now and then. So having that immediate feedback just is, is awesome. Justyna, what does the implementation cycle look like? How can people kind of get started with this. Yeah, of course you need to connect with with our sales department in this case and we will provide you the quotation of the implementation. And we already have a bill to build integration between ERP system and e-invoicing providers. So you don't need to contact e-invoicing provider separately we will take care of that. So as soon as you approve our quotation, we will assign dedicated implementation consultant that will contact you within two weeks to start the process. So if you have testing account, that's perfect situation. We install the application on the your testing environment configure everything, connect your testing account with testing e-invoicing network that our provider is is giving and the next step is to walk through with our consultant. So we will exactly guide you through the whole tool. We will explain in detail how the flow is working how you can send e-invoice, how you can receive e-invoice if it's specific. There are some specifics related to the country in which you and you operate. We will also get you familiar with that because there are some country-specific stuff that you, you should know. And after the walkthrough you have time, of course, to to test our solution in your sandbox. So that's also depends how how much time you would like to spend on, on testing and how much time you need to your team needs to get familiar with the flow. Once you're ready to go live we move the configuration to production account and we also proceed with the registration of your company inside e-invoicing network. So we need to request the registration in PEPPOL because European network and lately the Australia are also joined PEPPOL. So yeah, the waiting time can be for the PEPPOL registration because sometimes we see that it can take three or four weeks to get this registration. But once you registered, you ready to go. So I would say the implementation can take around three or four weeks and you ready to start e-invoices, sending e-invoices. For receiving, you can take additional two weeks because sometimes we need to wait for this PEPPOL registration. That's awesome. That sounds like a really quick turnaround and it sounds like the best way to prepare is to check out Zone and Zone & Co and ZoneCapture and some of the great apps that we have here. Dennis, Justyna, Sammy, thank you all again for a great conversation. Bringing your expertise to this topic and just letting us talk about e-invoicing and hopefully our listeners are just a little bit more prepared to handle e-invoicing when it comes to their country. Thank you, glad to be here. Thank you, Jake, having me here and for bringing me this opportunity. I was really, really happy to talk about this and hope that we did bring some some benefits to the companies and that they can start with e-invoicing pretty quickly enough before it becomes mandatory. Thanks for having us, Jake, it's been a pleasure to be here with such a knowledgeable panel as well. So thank you, everyone, and I really appreciate your time. Now we want to hear from you. Are you looking forward to using e-invoicing in your country? Let us know by emailing hello@zoneandco.com and if you enjoyed today's conversation, be sure to subscribe to Finance in the Clouds wherever you get your podcasts and we'll see you next time. Bye.