Author Archives: Rodrigo Martinez

Things to know about STP

04/05/2020

Key to onboarding: Message Compliance Testing (MCT)

Onboarding your suppliers to EDI is an exciting time, but it can be challenging, particularly when it comes to EDI message testing. If you’ve undertaken an onboarding exercise before, you’ll know that suppliers rarely get it right the first time around. Testing EDI messages often involves lots of effort from your team to process messages and communicate back to the supplier after each test. We’ve onboarded thousands of companies to EDI and our team have seen first-hand how resource-intensive it is. The good news is we now have a message compliance testing (MCT) tool. It simplifies the testing and compliance process to get you up and running with your suppliers faster. Your team will never have to let a supplier know that they’ve missed out a field again. Just think of the time and cost it could save!

What is message compliance testing (MCT)?

MCT is a service that allows companies onboarding to EDI to test their messages automatically before moving to a production EDI environment. It helps your suppliers to start trading via EDI as efficiently and effectively as possible.

How does it work?

Traditional EDI testing is a manual and resource-intensive exercise. Whether you do it yourself or outsource it, it usually involves sending suppliers all your EDI documentation (like your MIGs) and then testing each message type with each supplier to ensure they adhere to your requirements. This involves a lot of back-and-forth communication which is time consuming for everyone.
Define and setup your process
Our MCT tool lets you define a step-by-step process for your trading partners to test against your EDI requirements. The tool can replicate the different day to day business scenarios that you experience in your supply chain and then replicate them in your testing. For example, this could be:
  • Receive a purchase order
  • Send back a corresponding purchase order response accepting the order in full
  • Send back a corresponding purchase order response rejecting the order in full
  • Send back a corresponding purchase order response with a different quantity for one line
  • Send back a corresponding despatch advice
  • Send back a corresponding invoice
The syntax and business rules will be setup in the background for your suppliers’ messages to be validated against. For example, if you need the date in a particular format or a POR to include the reduced quantity. The process is designed to meet your business requirements and can be as simple or complex as you need.
Invite your suppliers
Once you’ve invited your suppliers to join, they can start the certification process.
Start the certification
They’ll be taken through your process where they can generate messages that they would receive (like a purchase order) and confirm that it can be processed on their side. Then they’ll be prompted to upload their messages to be validated against your syntax and business rules. Unlike manual EDI testing, our software will identify each error and feed the information back to your supplier in plain English. They can fix up the errors and try again.
Watch suppliers’ progress
Our reporting lets you monitor where each supplier is in the process and will let you know if anything needs actioning on your side.
Move to production with confidence
Once the whole flow is completed, you can move them to production with your mind at ease that their messages, business processes and rules will be compliant.

What are the benefits?

For those onboarding large communities to EDI:
  • Reduce costs and less internal resources Automating your testing reduces the need for internal or outsourced resources.
  • Easily monitor progress Our dashboards and reports make it easy for you to track the progress of your community.
  • Increase testing capacity You’re not limited by how quickly your team can support your partners. All your suppliers can test at once.
  • Faster problem resolution Your suppliers can find issues in messages and fix them straight away.
  • No additional software required Our MCT service is accessible through a browser, anywhere with internet.
  • 24/7 access It’s online and can be accessed at any time.
For those being onboarded to EDI:
  • Move to production faster You don’t have to wait for anyone to get back to you with your results – see them on screen as you go. Fix the issues up straight away and try again. Once you’ve completed the testing, you’re ready to move to production.
  • Troubleshoot errors straight away Errors are shown quickly once a message is sent – no need for back and forth communication.
  • Test whenever it suits you It’s online, so all you need is a browser.

How do you get started?

We’ve made the process as easy as possible.
  1. Get in touch with us.
  2. We’ll document your messages, workflow and business rules.
  3. We’ll go away and configure it.
  4. You’re ready to roll it out to your suppliers.
We can configure your setup to any file format (including UN/EDIFACT D01B, UN/EDIFACT D96A, ANSI ASC X12, cXML, GS1 EDI and more) and business rules; it’s completely customisable. Click here to find out more. Or if you’re interested in learning more about our MCT tool, request a call back from one of our team.
EDIRetailers

26/03/2020

Benefits of eInvoicing for software providers: An infographic

eInvoicing automates the sending and receiving of invoices directly between businesses' software. Countries in Europe and South America were among the first to mandate eInvoicing and others around the world are starting to follow after seeing the benefits. In Australia and New Zealand, more and more government agencies and their suppliers are connecting to the eInvoicing network. Often the benefits of eInvoicing are focused on end users, but what are the benefits for software providers? We’ve gathered some statistics to explain some of the benefits for software providers and their customers at a quick glance.

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E-invoicingSoftware providers
Prepare for STP

20/03/2020

Getting business buy in to your EDI project: a guide for businesses onboarding suppliers

Getting buy in to your EDI project from others in your business can be a challenge. But it’s a crucial step. Having the buy in from others will give you have support along the way and help make your EDI implementation smoother. We have extensive experience in helping businesses achieve success with their EDI projects. As a result, we’ve come up with some things to think about when engaging with various parts of your business to help you get their buy in. When going through the business, show your colleagues that you’re prepared. And remember to show them what’s in it for them.

Management

Often management is the first part of the business you need to get onboard. So, if you haven’t already been asked by management to undertake your EDI project, here are some things to think about:

Building your business case

It can be difficult to know where to start with your business case for EDI. When calculating your cost savings make sure you include: Orders Calculate the cost of sending a purchase order to your supplier.[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

(time it takes to put together email or postage x orders sent x hourly rate)

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+

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printing related costs

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+

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postage costs

The cost of suppliers processing the orders incorrectly.[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

number of orders incorrectly processed

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X

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time it takes to rectify the incorrect entries

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X

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hourly rate

Invoices Costs of processing an invoice for payment.[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

time it takes to enter invoices into software

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X

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number of invoices

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X

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hourly rate

Costs of fixing incorrect invoice payments.[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

Time it takes to fix errors in invoices

[vc_column_inner width="1/12" css=".vc_custom_1584660555829{padding-right: 10px !important;padding-left: 10px !important;}"]

X

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number of invoice payment errors

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X

[vc_column_inner width="1/4" css=".vc_custom_1584660687060{padding-right: 0px !important;padding-left: 0px !important;}"]

hourly rate

Warehouse Costs of updating incorrect data[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

Time it takes to update inventory in system

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X

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number of orders with incorrect data

[vc_column_inner width="1/12" css=".vc_custom_1584660587092{padding-right: 10px !important;padding-left: 10px !important;}"]

X

[vc_column_inner width="1/4" css=".vc_custom_1584660687060{padding-right: 0px !important;padding-left: 0px !important;}"]

hourly rate

Once you’ve done that you can use these figures to work out your expected ROI.[vc_column_inner width="1/4" css=".vc_custom_1584660745420{padding-right: 0px !important;}"]

Savings

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÷

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(establishment costs + running costs)

* These calculations are to be used as a guide only

Partner onboarding plan

Getting partners onboard to EDI is critical for the success of any EDI project. Providing a plan to management can often provide assurance to them that ROI will be maximised. Make sure to include how you intend to segment and onboard suppliers. Check out our guide, 10 steps to successful community onboarding.

Information technology (IT)

Your IT team will be one of the impacted groups when you implement EDI. To get their buy in, and to make their lives easier, think about these things:
  • Will they need to buy or install any new hardware or software? Some solutions require new hardware or software to be installed. Here at MessageXchange, we don’t require our customers to install any new hardware or software. We simply connect to your existing software.
  • Will they need to additional resources to implement EDI? This is dependent on the EDI solution you use. With our technology, your software only needs the ability to import and export messages and exchange them via a secure connection protocol. Check with your IT team whether they can currently do this. If not, what resources will they need?
  • Does the provider adhere to your security policy? IT teams are often aware of security risks to your internal systems. Put their mind at ease by showing what measures your EDI provider takes to keep your data secure. MessageXchange is ISO 27001 certified and having developed the software from inception, owns its intellectual property.

Finance

Another area of the business that you need buy in from is the finance department. Costs on the business are a big factor so it’s important to show the savings that will be gained from EDI. Finance teams will also benefit from the use of EDI. It greatly reduces the amount of manual inputting required and can automate a lot of their processes, leading to:
  • improved efficiency, allowing staff to work on higher value tasks
  • fewer errors: less time and costs to fix mistakes
  • reduced costs: no need to printing and archive paper invoices.
  • more accurate data for decision making.

Accounts payable

EDI can simplify accounts payables through two- or three-way matching. Rules can be put in place to check the invoice, delivery information and/or purchase order information for accuracy. This saves the accounts payable team time manually looking for documents before approving payments. Some suppliers offer early payment discounts for paying invoices early.

Accounts receivable

An added bonus for your accounts receivables team is reduced payment times. Studies show that EDI can reduce payment times by as much as 20%. This means improved cashflow for your business.

Buying/procurement

One concern for the buying and procurement teams is the impact it may have on their ordering process. EDI uses your existing software to produce and send the purchase orders to your suppliers. Usually the only change to your existing procurement process is that you won’t need to put together PDFs and emails or send purchase orders via post. Plus, through the use of purchase order responses and despatch advices, your teams will have more information at their fingertips like what can be fulfilled and when the order will arrive. And EDI orders can reach your suppliers almost instantly, so you’re more likely to get the stock faster.

Warehouse

Once you’ve implemented EDI, your business operations teams will be able to get the most out of the data received through EDI. Advanced shipping notices (ASNs) or despatch advices will get your warehouse teams delivery information before the goods arrive so they can organise the warehouse crew for receiving goods. This information can then be used to update your inventory levels in your warehouse management systems. The data from EDI can also be used to monitor your suppliers’ performance against KPIs with more accuracy.

Planning

EDI will mean some change for businesses so it’s often best to have a training plan for all departments. This should cover what's being changed in processes, such as:
  • how accounts staff will process payments to suppliers?
  • how buying teams raise purchase orders?
  • how warehouse staff process deliveries?
On top of having a training plan, a contingency plan in place will also improve buy in and trust throughout the business. This assures departments of what to do if, in the unlikely scenario, something goes wrong.

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EDIRetailers

27/02/2020

What do you need to prepare for eInvoicing? Your readiness checklist

So, you’re interested in implementing eInvoicing but unsure where to start? You’ve come to the right place. We’ve put together a few things you’ll need to think about.

Look at your business processes

This is to understand your current business processes and where eInvoicing could fit. Ask yourself:
  • How many invoices are you processing?
  • Are you sending invoices, receiving them or both?
  • Do you work with suppliers or customers overseas?
  • Are you looking to implement this with customers or suppliers, or are you complying with a partner’s requirement?
You’ll need this information to determine what solution is best for your business.

Gather information

If you’re going to send eInvoices, you’ll need to gather your trading partners’ eInvoicing identifiers – it’s usually an ABN or NZBN, but can be a GLN. The identifier is used by your eInvoicing Access Point to find your customers in the eInvoicing network. Your Access Point will also need your own identifier to register you in the network.

Get the relevant teams involved

It’s easy to have just one team take ownership of the project but it’s best to get all relevant business departments involved. By getting them involved, you’ll ensure that the solution suits everyone. The main departments are normally the finance and procurement teams, but it’s also important to include the IT team as it will involve your software.

Define your objectives

It’s important to think about what you’re trying to achieve – your business objectives – and how eInvoicing will help you achieve them. Defining these up front will help you keep on track throughout the project.

Review your software for eInvoicing

Before getting started with eInvoicing you will need to make sure your software is ready. Here are some things you should ask your invoicing software provider. Your Access Point may need this information to get you setup.
  • Does your software support eInvoicing?
    • If so, to what extent? Some software providers will offer a fully-integrated solution, while others might produce a file and customers will have to find their own Access Points.
    • Does eInvoicing require an update or an additional cost?
  • Does your software produce the Peppol file? If it doesn’t, your Access Point may be able to translate the file to the Peppol format.
  • Is your software cloud based or on-premise?
  • What connection protocol your software can work with?

Find an access point

There are a few things you should think about when looking at Access Point providers. These include:
  • Technical capability Make sure they can get you connected with your partners and the Peppol network quickly and easily. You should also be looking for a provider that can offer other services to future proof your investment.
  • Experience It is important to know about your provider’s experience and how they keep up to date with eInvoicing developments.
  • Pricing and support Understand exactly how you will be charged and what support you will receive to avoid any conflict in the future.
Having the information in all the sections above will help you start the process of enabling eInvoicing.

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E-invoicing

27/02/2020

4 things to think about when choosing an eInvoicing Access Point

Businesses around the world are recognising the benefits the Peppol eInvoicing network. Some of the benefits are:
  • easier invoice processing
  • cost savings
  • faster invoice payments
  • fewer errors
  • exchanging invoices directly to and from software
  • security
  • it’s 60–80% more efficient than paper-based processing.
If you’ve decided eInvoicing is right for you, the next step is choosing an eInvoicing Access Point. It’s important to make the right decision the first time around to avoid changing providers later on. Four main areas to consider when comparing eInvoicing Access Points are:
  • technical capability
  • experience
  • pricing
  • support.

Technical capability

An eInvoicing Access Point’s technology plays an important part in assessing their capability. Some of the things to ask are:
  • Does your eInvoicing Access Point have an integration with your ERP or accounting software? If they already have an integration with your software, the eInvoicing setup time is usually much quicker.
  • Can your Access Point translate files to the Peppol standard? This is important if your software doesn’t export files in the Peppol standard. If you’re not sure about your software’s file format, ask your software provider.
  • Can your Access Point send more than just invoices? Future-proof your investment by checking that your Access Point has other Peppol messages on their product roadmap. Automate the exchange of other supply chain documents such as purchase orders, advanced shipping notices and remittance advices once they’ve been added to the Peppol standard.
  • Can your Access Point provide other services? Some providers also offer Single Touch Payroll, SuperStream and electronic data interchange (EDI) solutions so you can bundle your services with the one provider. Some can even automate invoice reconciliation through an integration to your bank. Ask them what other services they offer.
  • Does your Access Point provider offer tools to onboard your customers and suppliers? eInvoicing is only beneficial if your customers and suppliers can exchange invoices with you. Here at MessageXchange, we offer a free service for you to onboard your customers and suppliers. It’s free for them to join and exchange invoices. Your Access Point may also have a service for you to test your messages before going live so you can make sure your message is compliant before you start sending eInvoices.
  • How does your Access Point make changes to their software and infrastructure? Find out their security and infrastructure procedures to make sure your business won’t be impacted when they perform security patches and releases.

Experience

Experience is important when comparing Access Point providers. Your Access Point will be your first point of call for information, so ask them how they keep on top of eInvoicing news and developments. Beyond experience in eInvoicing, it’s beneficial for your Access Point to have experience in related areas, such as electronic data interchange (EDI) for example. Providers with similar integration experience can provide insights and different approaches for your business to achieve its supply chain goals. They might have case studies you can look at. Ideal providers will have worked with businesses in your industry and location so they can provide you with insights and help along the way. If your Access Point has staff familiar with the countries you operate in, they’ll also be able to help you comply with the local requirements.

Pricing

Find out how your Access Point charges. Take the time to understand their model. Do they charge per message? On data consumed? The number or kilocharacters? Are their plans capped or uncapped? And look at their charging model for ongoing support. Be clear about what’s chargeable and what’s not. This will ensure you’re both on the same page and will reduce likelihood of conflict in the future. As well as the cost to you, ask your Access Point to provide you with a guide to work out the expected cost savings from eInvoicing. You can use this to set your expectations and to review the project once it’s been up and running for a while.

Support

Finally, look at the support they offer. Does their support model work for you? Support is crucial when implementing eInvoicing so make sure you‘re fully aware of what is included. Having support in the country you operate in makes your eInvoicing implementation much easier. Ask provider how quickly they respond to enquiries from customers. MessageXchange is the first Peppol-certified eInvoicing Access Point provider in Australia.

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16/12/2019

eInvoicing Access Points: Building your own vs outsourcing it

Access Points are vital to eInvoicing. But why are they so important? As part of the four-corner model, Access Points send and receive trade documents between two parties. Organisations who want to connect to the Peppol eInvoicing network need an Access Point. Access Points go through a certification process set by the Peppol framework. It sets out the standards and interoperability requirements for providers. Certification ensures providers have the capability and compatibility to function within the network, to help maintain reliability and stability of the network and manage risks that might damage the trust of the network. Businesses have two options when it comes to Access Points:
  1. Choose to become an Access Point themselves by going through the certification process.
  2. Work with an Access Point service provider, such as MessageXchange, to connect you to the eInvoicing network.
In this blog we compare both options to help you decide what’s best for your organisation.

Cost and infrastructure

There are a number of costs and infrastructure requirements to become an Access Point. Costly hardware and infrastructure are one thing, but the associated maintenance costs are another substantial cost. There are also a number of compliance-related costs to become a Peppol-certified Access Point. Some include:
  • ensuring your software is compliant with Peppol requirements
  • security, which requires multiple controls, one of which is adherence to ISO 27001 or ASD/NZ ISM standards
  • adherence to messaging and e-delivery standards.
All these are required to obtain and maintain your Peppol certification. On top of this, Peppol charge a sign-up fee and an annual membership fee. When using an Access Point service provider, all the costs and requirements are covered by the provider, and the costs are often shared among all their clients. Overall, this makes it much less resource intensive and often much more cost effective.

Time

Becoming an Access Point is a very time-consuming process. The Australian certification process looks like this:
  1. Comply with operational framework The operational framework is a set of standards used to enable access to the eInvoicing network. The framework is split into four areas:
    • Legislation and policy: Ensure you comply with the implementation guidance and governance of the local authority.
    • Organisational interoperability: Ensuring you are able to comply with all requirements for sending invoices (and adjustment invoices) and recipient created tax invoices. You must demonstrate you can connect with all corners within the four-corner model. Unique business identifier requirements need to be adhered to so businesses can be found. A business address needs to be established for all businesses to be able to send and receive documents.
    • Semantic interoperability: Sets out requirements to ensure different applications can read and process information that is exchanged.
    • Technical interoperability: This involves standards and protocols to exchange information securely and reliably between businesses (directly or via service providers).
  2. Security compliance You’re required to implement security controls equivalent to ISO 27001 or ASD/NZ ISM standards, which can often be a lengthy and costly process in itself. You also need to implement encryption in transit and at rest, security monitoring and multifactor authentication.
  3. Join OpenPEPPOL Fill in registration form and pay the annual subscription.
  4. Expression of interest This is submitted to the local Peppol Authority, the Australian Taxation Office (ATO).
  5. Sign Transport Infrastructure Agreement (TIA) Following membership approval, you need to sign the Transport Infrastructure Agreement (TIA) with the ATO. You will also need to sign the New Zealand Annex 5 if you want to be certified in New Zealand.
  6. Complete due diligence Checks relate to business operations, senior staff, criminal record and insurance.
  7. Complete security questionnaire You must show evidence of adherence to ISO 27001 or ASD/NZ ISM, encryption requirements, security monitoring and multi factor authentication.
  8. Testing
    • Unit testing Verify your ability to send and receive Peppol documents in line with eDelivery Network specifications within your own environment.
    • Obtain test PKI certificate Request a test PKI certificate from OpenPEPPOL and fill in the form. This form will then be reviewed by both Peppol and your local Peppol authority.
    • Peppol acceptance testing – eDelivery network compliance This happens within the OpenPEPPOL test environment to ensure you comply with Peppol eDelivery network specifications.
    • Interoperability testing This involves working with a partner to test interoperability. In Australia, scheduling and identifying your partner is done by the ATO. You need to allow a lead time of two weeks for the ATO to find a suitable partner.
  9. Receive certification
  10. Proceed into production
By using an Access Point service provider, you don’t need to go through any certification process. Instead, you just need to provide some information for them to tailor their service to your business. This includes:
  1. Determining your file format If you’re software doesn’t produce the Peppol standard file format then your Access Point may be able to translate, or map, your file for you.
  2. Connection type Your Access Point will need to know what connection protocol you require for your software. This might be API, sFTP or something else.
  3. Business identifier Access Points require your business identifier to register you in the eInvoicing network. In Australia and New Zealand, the ABN and NZBN are needed to uniquely identify organisations when exchanging eInvoices.
Connecting to the Peppol eInvoicing network using an Access Point service provider can take less than a day.

Knowledge

Another fundamental aspect of becoming an Access Point is knowledge. You’ll need to keep up-to-date with developments and requirements from Peppol and the ATO. You’ll also need to connect with other Access Points and rectify any issues that come up to send and receive documents. All these things will require knowledgeable staff and dedicated resources. Access Point service providers take care of all developments as they come out. There’s no need to connect with Access Points, Peppol or the ATO. It’s all taken care of. Using an Access Point service provider can save businesses money, time and hassle when connecting to the Peppol eInvoicing network.

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E-invoicingSoftware providers

13/12/2019

The benefits of EDI: an infographic

Electronic data interchange, or EDI, is widely adopted around the world by companies looking to gain efficiencies, visibility and cost savings. But if you’re new to the concept, it can seem overwhelming. Simply put, EDI (electronic data interchange) is the exchange of business information directly between business software. Think of a purchase order being created in one company’s accounting package, and it ‘magically’ appears in the supplier’s software; no email, no PDF, no manual data entry. Well, it’s not magic, it’s EDI! But what are the quantifiable benefits of EDI? We’ve gathered some data to explain the benefits at a quick glance.

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EDIRetailersSuppliers

28/11/2019

Why should software providers become eInvoicing-capable?

eInvoicing continues to gather momentum and increase uptake around the world due to its many benefits. These include:
  • improved cash flow and quicker payments
  • easier processing and cost savings
  • fewer errors
  • direct and secure messaging
  • available for every business size.
A business’ software plays a big part for those looking to implement eInvoicing. Businesses will need software that is eInvoicing-capable. What’s in it for software providers? We look into some of the reasons software providers incorporate eInvoicing into their product.

What’s in it for software providers?

Retaining and acquiring customers

One of the clear reasons is retaining existing customers and the potential to acquire new customers. Software providers are always looking for ways to provide more functionality and improve features for their clients. Becoming eInvoicing-capable increases existing functionality for their customers. It also provides additional value to help software providers differentiate themselves from competitors.

Allow customers to trade seamlessly internationally

The Peppol eInvoicing network currently has 33 countries using the standard, allowing businesses around the globe to send and receive trading documents such as eInvoices. This means software providers that become eInvoicing-capable also allow customers to trade seamlessly with partners overseas. This is a huge benefit for existing and potential customers who currently trade internationally. This also benefits businesses looking to expand around the world.

Early payments from the Australian Government

The Australian Government has announced its plan to make payments within five days for contracts under $1 million from January 2020. This is set to increase demand for eInvoicing, which makes it a big potential market for software providers. Many smaller suppliers will be looking to implement eInvoicing to benefit from of this incentive. The Australian and New Zealand Governments’ push to move more suppliers to eInvoicing will also help drive demand in the region. As larger businesses look to connect to the eInvoicing network, demand will grow even further. Globally, we are seeing 20% growth annually in eInvoicing uptake.

What is the process for software providers to integrate?

There are a number of options for software providers to make their products eInvoicing-capable. The process normally consists of:
  1. Choose an Access Point Access Points connect companies to the Peppol eInvoicing network. They send and receive the messages and pass them on to the recipient’s Access Point. There are options when it comes to Access Points:
    • Choose to become an Access Point yourself by going through the certification process with Peppol and local Peppol authority.
    • Work with an Access Point provider, such as MessageXchange, to connect you to the eInvoicing network. Working with an Access Point provider is often the easiest and quickest way to connect to the network, and in many cases is the most cost efficient.
  2. Determine your file format The Peppol eInvoicing network exchanges messages in the Peppol standard. There are two ways to comply:
    • Produce the Peppol file format from your software.
    • Work with an Access Point provider to translate your software file to a Peppol compliant file.
  3. Error messaging As part of sending and receiving eInvoices, you’ll need to be able to display any error messages. You can choose to show these error messages in your own software. Some Access Points offer a solution for displaying error messages that don’t require development on your side.
  4. Customer onboarding In order to enable your customers for eInvoicing, their organisation details will be needed for the Access Point to register businesses. In Australia and New Zealand, the ABN and NZBN are needed to uniquely identify organisations when sending and receiving eInvoices.

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E-invoicing

25/11/2019

Traditional invoicing and eInvoicing: A comparison

We’re beginning to see a big change in the way we do invoicing in business. What used to be a very manual, paper-based process is now becoming automated and digital with the introduction of eInvoicing. What is eInvoicing? To put it simply, it is the electronic sending and receiving of invoices in a structured data format directly between software applications. This isn’t sending a PDF and or sending an email, eInvoicing is software to software and 100% automated. By comparing traditional invoicing and eInvoicing we can see just how efficient eInvoicing can be for both buyers and sellers in the following areas:
  • Processing and payment
  • Costs
  • Visibility, transparency and accuracy of information
  • Security

Processing invoices

Traditional invoicing

In traditional invoicing, the process of creating invoices and receiving payments can be lengthy. Often it looks like this:
  1. Create the invoice
  2. Print and post it (or send via email)
  3. Buyer receives and sends it to their accounts team
  4. The invoice is downloaded, reviewed and approved
  5. The invoice is paid
  6. The invoice is archived.
The process involves a lot of manual handling and re-keying of information, causing errors in invoice data, slowing processing and running the risk of invoices being sent to the wrong person or company. Traditional invoicing is also very labour and time intensive, so when staff are working on multiple tasks, the process can be slowed down even further. All these elements can create huge delays in payments and reduce cash flow for sellers, which is especially problematic for smaller businesses. Overall, paper invoices are estimated to take 23 days to process when the process runs smoothly. This can blow out to up to 90 days when they run into errors.

eInvoicing

eInvoicing works a bit differently. It looks like this:
  1. The seller finds their purchase order (PO) in their software and creates an invoice. The information is brought across from the PO. The seller sends the invoice electronically from their software. The invoice is sent, almost magically, through Peppol network directly to buyer’s software.
  2. The buyer’s software matches the received invoice against the PO for payment authorisation.
The process is streamlined through automation for both the seller and buyer. The issues presented by traditional invoicing are eliminated by significantly reducing redundant manual processing. eInvoicing has been shown to be 60-80% more efficient than paper-based processing greatly reducing payment times. One source calculates the average for processing an eInvoices is just 5 days . By reducing processing times with eInvoicing, sellers receive payment faster and buyers streamline their processes and business operations.

Costs

Traditional invoicing

There are a few different costs that are attributed to the traditional invoicing processing. For both buyers and sellers, the main costs are:
  1. Printing: even if using PDFs, invoices may be printed. Costs include paper, ink and even printer maintenance.
  2. Labour: you need people to process invoices and this only increases as your business grows.
  3. Postage
  4. Filing
Overall, costs have been estimated to be $30.87 to process a paper invoice and $27.67 for PDF invoices.

eInvoicing

Costs are much lower when we look at the costs associated with eInvoicing. Many traditional invoicing costs are reduced or eliminated altogether because of reduced manual processing and electronic sending. It’s been calculated that eInvoices are approximately 70% cheaper than traditional invoicing. On top of this, buyers can often stick to the payment terms of their suppliers, reducing late fees and even benefiting from early payment discounts.

Visibility, transparency and accuracy of information

Traditional invoicing

Traditional invoicing can require multiple platforms and software and sometimes complicated physical and electronic filing systems. This can make it very difficult to manage, maintain and retrieve records. This can make reporting harder, which impacts the accuracy of your business performance results and the data used in decision making.

eInvoicing

eInvoicing allows you to use a single piece of software for creating and processing invoices. This makes it much easier for businesses to have visibility and transparency of their payables and receivables. The need for collating information from multiple systems and paper documents is significantly reduced. As well as this, the reduced risk of errors from manual processing increases the accuracy of data.

Security

Traditional invoicing

There are a number of security issues that can occur from traditional invoicing.
  • Fake or comprised invoices: details on invoices can be changed or altered without knowledge from either party.
  • Billing scams and fraud: invoices can be sent to misleading sources, causing money loss.
This is commonly because the formats the documents are sent in allow them to be easily altered. Plus, sending invoices through mail or email means they’re easily intercepted, sent to the wrong person, or send fraudulently.

eInvoicing

eInvoicing uses the Peppol network, which requires buyers and sellers to have a certified Access Point send and receive invoices. The Peppol network adheres to a secure and reliable framework that all parties must comply with. eInvoices are sent in a pre-defined format which can’t be changed or altered. Archiving using eInvoicing is much easier to track, improving your audit trail. Comparing both traditional invoicing and eInvoicing shows significant efficiencies when using eInvoicing. If you’re interested in finding out how eInvoicing could work for your business, request a call from one of our experts today!

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E-invoicing
Single Touch Payroll search

20/11/2019

New eInvoicing legislation has become law. What does it mean for you?

More than 1.4 billion invoices are sent every year in Australia and New Zealand. With that in mind, it is easy to understand why people, especially those in the Australian Government, see eInvoicing as a game changer.

What is eInvoicing?

eInvoicing enables organisations to send and receive invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning. The eInvoicing model is based on four-corners, where corners one and four are the supplier and customer two and three are Access Points. These Access Points connect to each other to exchange eInvoices. You might also hear about Peppol in relation to eInvoicing. Peppol is a standard for eInvoicing, developed by OpenPEPPOL, an international standards body. It defines the eInvoice message format, as well as connection protocols and governance. The Peppol network is also able to exchange more than just eInvoices. Purchase orders are being reviewed and localised for Australia and New Zealand with more expected to be launched in the future.

What are the benefits of eInvoicing?

  • Easier invoice processing
  • Cost savings
  • Faster invoice payments
  • Fewer errors
  • Exchange of invoices directly to and from software
  • Secure
  • Available for businesses of every size
  • 60–80% more efficient than paper-based processing
  • Could save Australia and New Zealand more than $10 billion a year
  • The US Government has already seen eInvoicing save them more than US$450 million in processing costs alone.

A round up of developments so far:

  • In March 2018, the Australian and New Zealand governments agreed to look at common approaches to eInvoicing under the Single Economic Market (SEM) agenda. This was formalised on the 25th of October 2018 when the Australian Assistant Treasurer and the New Zealand Minister for Small Business signed the Trans-Tasman Electronic Invoicing Arrangement.
  • In February 2019, both governments announced their intention to adopt the Pan-European Public Procurement Online (Peppol) interoperability framework for eInvoicing.
  • In November 2019, the Australian Government announced that as of the 1st of January 2020, contracts valued up to $1 million will be paid in five days or face interest on late payments, as long as both the seller and the agency use eInvoicing.

What’s in the new eInvoicing legislation?

On the 29th of October 2019, legislation became effective allowing an Australian Peppol authority to be established by the Australian Taxation Office (ATO). The ATO put in their application to OpenPEPPOL to begin the membership process and was announced as a Peppol member on the 31st of October. Around the same time, the Ministry of Business, Innovation and Employment (MBIE) become the New Zealand Peppol Authority. As a result of the new legislation, the ATO and MBIE can now start to certify Access Points in Australia and New Zealand respectively. The ATO has begun working with software and eInvoicing solution providers to get the ball rolling. This is an important development as it means Australian and New Zealand businesses can connect and start to send invoices through the eInvoicing network as soon as Access Points have been certified.

What does this mean for you?

To access the eInvoicing network and start reaping the benefits of eInvoicing, businesses will need an Access Point. Software providers should find their own Access Points, or if your software doesn’t have an Access Point, you can find one directly. You can choose to become an Access Point yourself by going through the certification process with Peppol or you can work with an Access Point provider, such as MessageXchange, to connect you to the eInvoicing network. Working with an Access Point provider is the easiest and quickest way to connect to the network, and in many cases is the most cost efficient. Some Access Points can also translate files into the Peppol eInvoicing format. For software providers: Now is the time to start engaging Access Points to get your customers ready for eInvoicing. For businesses: Speak to your software provider to find out their plans for eInvoicing. If they’re not providing an Access Point, start getting in touch with Access Point service providers to prepare for eInvoicing.

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E-invoicing

14/05/2019

Costs of manual vs EDI procurement: A comparison

Placing orders

Think of a company that issues thousands of purchase orders a month. They’ll likely receive at least one invoice for every purchase order issued. Let’s look at the process for this simple scenario:
Buyer manually enters the purchase order in their software Buyer sends order to supplier via email Supplier manually enters the purchase order in their software Supplier manually enters the invoice in their software Supplier sends invoice to buyer via email Buyer manually enters the invoice in their software
Some organisations have put a price on manually processing a single invoice in the ballpark of $30. Some of the costs associated are:
  • Paper
  • Postage
  • Printing
  • Filing
  • Labour – This includes staff working on the processing of the transactions.
  • Error checking costs – Manual processes create errors and these errors can add costs to your business in order to correct them. This isn’t just additional labour hours to correct the issue. If the wrong number of goods to be sent is incorrectly inputted, it could lead you having an under supply or over supply of goods required.
Now let’s compare this process with EDI.
Buyer enters the purchase order in their software Purchase order appears in Supplier’s software Supplier enters the invoice in their software Invoice appears in Buyer’s software
As you can see from the diagram the process is reduced and streamlined because of the EDI automation. The amount of manual inputting is reduced, saving time for your account team. Connecting partners’ ERPs reduces or eliminates the need for postage, filing and printing and paper costs. This scenario is just one of the steps in the procurement process. Other messages can be exchanged to automate other steps, such as:
  • Purchase Order Change – sent by buyer to supplier if the original purchase order has been changed.
  • Purchase Order Acknowledgement – sent by supplier to buyer to acknowledge receipt of the order.
  • Purchase Order Response – sent by supplier to buyer to notify them of any responses or changes to an order.
  • Advanced Shipping Notice – sent by supplier to buyer to let them know when and how goods will be shipped.

Receiving goods

When receiving goods from suppliers, a team is needed in the warehouse ready for the order to be delivered. Using a manual procurement process, it is hard for the receiving team in the warehouse to know what will be in each package sent or how it is packaged. It is also difficult for them to know when it will be sent. Once the delivery comes in, items need to be checked off manually and inspected to ensure no goods are damaged. This is sometimes done with pen and paper on a clipboard. This information then needs to be inputted into the ERP system or sent separately to the accounts team. Costs associated are:
  • Labour costs – accounts team and receiving team.
  • Stationary – paper, pens, etc.
  • Any errors occurred during this process.
With EDI, this process is simplified and more streamlined. Before goods are shipped by the supplier, they can send an Advance Shipping Notice (ASN) to the buyer. This details what is being sent, how it is being sent and when it is expected to arrive. The buyer can then prepare their warehouse with the right personnel and equipment to accept the goods once they arrive. This reduces labour costs and increases productivity. The supplier can also generate SSCC labels on the individual logistic units sent to the buyer (e.g. pallet, carton, container). This can be scanned by the receiving team, automatically sending the information to the buyer’s ERP.

Preparing payments

Once your goods have been received, any discrepancies are raised and need to be rectified before payment is made. This is often done using three- or four-way matching. Some of the discrepancies that may arise in the matching process are:
  • Inaccurate quantities received or invoiced
  • Incorrect prices
  • Received (including damaged) goods.
Typically, matching requires three documents to be reviewed:
  • Purchase order – confirms the order has been made
  • Receiving advice – details what has been received and the condition of the goods
  • Invoice – sent by the supplier requesting payment.
The accounts payable team collects and reviews each of these documents for the quantities, prices, and payment terms. This can be quite time consuming as this information can be in the form of paper documents, emails, faxes and PDFs; all stored in different places. Documents can also be lost or misplaced causing further delays to payment potentially missing discount opportunities. With EDI, the process is faster and more simplified. All required information is sent directly to your software via EDI. It can then be programmed to automatically match the information and identify discrepancies. If an issue is detected during matching it is filtered to be investigated by your accounts team. All successful matches are processed and scheduled for payment; no need for manual processing and paper-based documents, saving you money and time. Interested in implementing EDI for your business? get a free consultation from one of our EDI experts.
EDIRetailersSuppliers

08/04/2019

EDI more than just automating your supply chain

Looking for ways to improve processes is critical to any business, particularly in the areas of efficiency and cost reduction. Electronic Data Interchange (EDI) allows the exchange of business information directly between the software of your business and your customers and suppliers. It automates unnecessary manual processes while streamlining supply chain transactions. Companies commonly implement EDI to:
  • Gain better visibility into the supply chain
  • Reduce errors in exchanging paper or PDF documents
  • Reduce costs
  • Increase information security.
Let's have a look at these benefits in more detail.

Gain better visibility into the supply chain

With a manual purchase order and invoice, can a buyer answer questions like:
  • Can the supplier fulfil my order?
  • When will the goods be shipped?
  • When can I expect my goods to arrive?
  • What is in each package I am about to receive?
In short, no. But all of these questions can be answered through other EDI messages exchanged in near-real-time. Often companies will exchange more than just a purchase order and invoice; they’ll exchange purchase order responses (which tells a buyer if the supplier can fulfil the order), advanced shipping notices (which tells the company how the shipment is packed and when it will arrive) and more.

Reduce errors in exchanging paper or PDF documents

Traditional procurement has many manual processes that are prone to error. Human mistakes occur for a number reasons including:
  • Inputting incorrect numbers or values
  • Missing or skipping key steps in the process
  • Transferring the wrong purchase order information
Here is an example of traditional procurement for a PO to Invoice process:
Buyer manually enters the purchase order in their software Buyer sends order to supplier via email Supplier manually enters the purchase order in their software Supplier manually enters the invoice in their software Supplier sends invoice to buyer via email Buyer manually enters the invoice in their software
With EDI, processes are automated reducing manual errors. For example, when a buyer places a purchase order (PO), it can automatically trigger an acknowledgement to let the buyer know it’s been received, and the order can be put into the supplier’s system. Here is an example of EDI procurement for the same process as above:
Buyer enters the purchase order in their software Purchase order appears in Supplier’s software Supplier enters the invoice in their software Invoice appears in Buyer’s software
When the supplier is ready to ship the order, an advanced shipping notice (ASN) can be created and sent to the retailer to advise them of delivery. This can include information like how it’s packed, when it’ll arrive, the shipping company and more. The supplier can the raise an invoice in their software, which can be sent automatically to their customer’s software. Without EDI, all these processes would require manual creation greatly increasing the risk of errors.Through the use of EDI many areas of the supply process are completed with no additional manual inputting of information. Want to learn more about EDI? Download our introduction to EDI whitepaper.

Reduce costs

In low-margin businesses, reducing costs is critical. Think of a company that issues thousands of purchase orders a month. They’ll likely receive at least one invoice for every purchase order issued. Without EDI, that’s a lot of manual handling. Some organisations have put a price on manually processing a single invoice in the ballpark of $30. You can see how it adds up! EDI vastly simplifies the supply chain process through automation. Some examples of costs reductions are:
  • Manual data entry costs: EDI automates many manual data entry processes, reducing the amount of labour required.
  • Transaction costs: No physical sending of documents to your partners reduces costs related to printing, postage and filing.
  • Receiving and shipping related costs: By receiving shipment information from suppliers prior to delivery, you can prepare in advance for receiving goods. By streamlining the receiving process, you can achieve reductions in labour costs.
  • Error correction costs: Errors in the supply chain can result in extra costs being incurred. With the elimination of manual steps in your processes, errors are reduced. If errors do occur, they can be found and corrected much faster.

Increase information security

In today’s business environment, information security is a prominent issue. Sending sensitive information through unsecure channels can add risk to your business. You could be sending these via email, post or even SMS, which can easily be sent to the wrong person or even intercepted. EDI can send this information more securely than conventional methods. Using secure message communication types such as Secure File Transfer Protocol (sFTP) or AS2 decreases your risk. EDI adds a layer of authentication to the process which is required for the information to be sent. It also limits the connection to specific partners reducing the risk of your sensitive business information being sent to the wrong recipient.

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