The era of fully digital financial processes has arrived Kaur Lohk FITEK We enable fully digital financial processes

Numbers There are (1/2 trillion) invoices issued in world annually 42 billion (8,5%) are in some digital form 80 million invoices are issued annually in Latvia 35 million to business or government Only a tiny fraction of these is in machine readable XML format (e-invoice) 20 minutes takes average incoming purchase invoice handling. That makes more than 35 million people in the world handling only incoming invoices every day. That takes more than 6000 people annually in Latvia to handle incoming invoices 100% every day. *Sources: Fitek data and assumptions, Billentis study 2015

Incoming financial process today: Receiving mail & opening the envelopes. Handling the papers over the accountants. Receiver identification. Document registration. Stamping / first notes. Vendor control. Making additional copies. Routing to workflow Accurarcy control. Posting. Approving. Sending to next approver Approving. Invoice routed back to accountants. Posting control. Entering data into ERP. Archiving invoices. Receiving the invoice and preparations Control & approving Accounting 1 invoice minutes of work

Fully automated purchase invoice procedures 1 invoice 2-3 minutes of work

Some weird regulations Michigan: A woman isn’t allowed to cut her own hair without her husband’s permission. New Hampshire: It's illegal to show a movie before 2 pm Vermont: You're not allowed to intentionally kill a bird with a plane. Latvian bookkeeping law article 6: accounting records must be in the Latvian language and together with supporting documents must be kept within Latvian territory in Lithuania law requires to store invoices in the same format they were sent/received for 10 years Good news is that e-invoicing is fully legal in both countries!

Current financial process automation industry situation There are a few ERP-s available in the market which are having functionalities of receiving e-invoices, sending e-invoices and functionalities of workflow There are operators who offer customised solutions for larger companies and institions for automating the accounting procedures. Fitek in all Baltics, Telema (mainly in EDI-XML), Omniva in Estonia, Lithuanian Post in some fields in Lithuania, different ERP providers Fitek self-service solution for small end medium companies will be available in the Q1 next year. Based on a Civitta study (November 2015) with 1859 companies answered in Lithuania we can assume, that many companies would like to improve the current situation. 70% of answered companies are willing to use for automated invoice receiving processes, and 57% are willing to pay for the used services

Benefits of automated processes The time and cost entailed in entering invoices will reduce up to 80% thanks to a decrease in manual labour. Data quality will increase – there will be fewer errors in the system. Speed. The process of handling invoices will accelerate by multiple times. Systematic archiving of invoices. Finding data is faster and storing them is easier. Transparency. The status of invoices can be traced at any time and from anywhere. Completion of periods is much faster. Convenience. Invoices can be processed anywhere on various devices that have internet access.

Future Starting all Estonian public sector invoices must be in e-invoices By a common EU e-invoice standard will be announced as EU directive is the final deadline for all Euro countries to use in public procurement only e- invoices (EU directive 2014/55) Billentis estimates that 100,000+ public administrations / agencies in Europe will be affected by new directives. Agencies have to enable their systems and processes with the aim to receive and process invoices electronically by 2018 at the latest. That directive will drive e-invoicing in public sector and also in private sector, as necessary changes in IT and ERP will be done anyway And soon 30 million people will not waste time circulating purchase invoices but will do something productive and trees will grow