It’s hard to think back at the times we used to sent letters to each other. Since we got connected with the (broadband) Internet, written letters have been rapidly replaced by e-mail. But in our business lives, some day to day activities that we perform are lacking behind with these technological developments. One of these activities is invoicing.
What is happening right now!
Although we’ve got high speed network connections, the process of invoicing hasn’t changed much in the last decade. Most companies are still:
- printing invoices from an ERP system
- put it in an envelope
- which is delivered at the mailbox
- going to a mail distribution center
- handed over to the mailman
- who eventually delivers the invoices at the customer
But the process doesn’t end there.
Because it’s a paper invoice, the customer has to process the invoice by hand, or trough a scanner with character recognition software (OCR – Optical Character Recognition). The average cost of processing an incoming invoice is between €10 to €15 and sensitive for human error! But why are companies still performing all these expensive and time consuming steps if we have the technology to do this faster and more efficient?
The process of sending/receiving and processing an invoice by mail can take several days. If we would send our invoices electronically we can replace all these time consuming steps, with a much more simpler and elegant process. Which has no room for human errors. Think about the amount of invoices your company sends/receives, and how many time this can save you!
But how does this work?
Instead of printing invoices to paper, companies have to send out their invoices as a XML formatted invoice. This can either be UN/CEFACT or UBL (Universal Business Language). UBL is the most commonly used standard in the EU. (Currently used in public sectors of Denmark, Italy, Spain and the Netherlands (UBL2.0)).
For the Dutch public sector, the government has created a portal called “Digipoort”(Dutch), through which companies can send their invoices. Digipoort determines for who of the connected authorities, the received invoice is meant. It only checks the ‘envelope’ for the ‘address’, it doesn’t look at the invoice to see if the amount is correct. All companies who do e-invoicing can send their e-invoices through Digipoort. But only authorities of the Dutch public sector can receive invoices from Digipoort.
A message protocol called “Digikoppeling”(Dutch) is used to sent the invoices from Digipoort to the ‘mailbox’ of receiving authority. This mailbox is a B2B adapter for ebMS (EbMS is a ebXML specification which is a standard to send messages in a safe and reliable way), Oracle has a great out-of-the-box solution for this. “Oracle Digikoppeling” which provides the software an (local)authority needs to connect to Digikoppeling.
If we compare Digipoort en Digikoppeling to the classic invoice by mail situation, it looks like this:
Digipoort provides a mailbox for companies and determines to which authority it has to go. Digikoppeling is put in charge for delivery (the mailman, so to speak).
When your mail has arrived
Now at the receiving end, the e-invoice has to be processed to the ERP system (e.g. Oracle E-Business Suite or JD-Edwards).
We can dive in the technical details. But in short it comes down to the following steps;
- The B2B adapter connects to a (Oracle) Service Bus.
- The Service Bus checks where the message needs to go, and can transform it if necessarily
- The Service Bus calls the published web service(s) of the ERP system to deliver the e-Invoice at the right place.
- Now the ERP system can validate the e-Invoice
- e-Invoicing can drastically optimize the process of sending/processing invoices,
going from days to seconds.
- Based on reliable standards
- No human interaction is necessarily
- Cutting costs (in some cases costs were cut by 50%)
- No more paper is needed (supports your Corporate Social Responsibility)
- Legal clearance by the EU
So it’s time to catch up! Let us start e-invoicing, what are we waiting for?