Electronic Invoicing in Denmark Donostia-San Sebastian April 12, 2005 Thomas Mærsk Pedersen, Special adviser, Agency for Governmental Management

Table of Content - I The Initiative and Its Background The Content of the Act (L1203) Electronic Invoicing Electronic Invoicing – Some Key Data Which Work Processes are infected by Electronic Invoicing? The Impact on the Public and Private Sector Paper vs. Digital?

Table of Content - II What is ”Read In-Bureaus”? The Technical Concept The Course of the Project The Content of the Project and its Focus Areas Status as of Mid-April Lessons Learned

The Initiative and Its Background Navision Stat (Acc. System) Cost-based accounting Digitalizing work processes Public Payments Act L1203

The Content of the Act (L1203) Easy Account –Citizens and companies receiving public payment must register an account to which payments must be made (account-to-account payments) Closing public cash tills –Due to elimination of cash payment the public cash tills will be closed Electronic invoicing –All bills must be digital when arriving to or send from the public authority

Parties of Interest Ven- dors Counties Municipalities Gov. Inst.

Electronic Invoicing What is meant with the term “The Public”? Governmental institutions = 19 Ministries plus sub institutions Counties = 14 plus sub institutions Municipalities = 271 plus sub institutions The Public receives app. 90 mil. bills every year Expected benefit: 60 mil. € yearly due to savings in transaction costs

Electronic Invoicing – Some Key Data The Act was passed December 27, 2003 The Departmental Orders were in hearings during the summer of 2004 The Departmental Orders were published October- November 2004 Go Live February 1, 2005

Which Work Processes are affected by Electronic Invoicing? Connected processes for purchasing, invoicing and payment Requi- sition Requi- sition Appro- val Appro- val Orde- ring Orde- ring Deli- very Deli- very Invoi- cing Invoi- cing Pay- ment Pay- ment Electronic Invoicing/ Easy Account Electronic Procurement & Financial Systems

The Impact on the Public and Private Sector Each public institution must be connected to a standardized Network through which the vendors can reach the institution (VANS) Other Network can be used if both parties agree Each public institution must be able to receive and read at least one electronic format (OIOXML) Other formats can be used if both parties agree The invoices must be electronic at arrival –For private vendors: no demand that the invoices are electronic at the time of sending –Public vendors invoicing: other public customers: the invoice must be electronic private customers and companies: the invoices can be electronic if wished so

Paper vs. digital? The bills can be electronic from mailing to receiving Companies unable to generate electronic invoices can use two central scanning bureaus (”Read In- Bureau”). It is free of charge to use the two central bureaus for SMV’s

What is ”Read In-Bureaus”? Receives paper bills and transforms them into electronic format (OIOXML) The bureaus must be certified and meet certain demands regarding e.g. security as defined in relevant acts The bureaus have 5 working days the handle and deliver the invoices The vendor pays for using the Read In-Bureau The use of Read In-bureau is free for SMV’s

The Course of the Project The legal work was based in the Ministry of Finance The practical/operational work was based in the Agency for Governmental Management In average 15 people took part in the project The project was initiated in the Agency for Governmental Management Mid-April 2004 and finished by the end of February 2005

The Content of the Project and its Focus Areas Development of an integration component for the governmental finansial systems Founding and development of the technical infrastructure (VANS, EAN, OIOXML) Participation in legal tasks Making the departmental Orders Support for public institutions and private citizens and companies –Infoline (telephone support) –Electronic mail box –Information campaigns –Seminars –Courses –Working groups (trade associations, Local Government Denmark and others) –Newsletters –Other publications

Status as of April 2005 February: invoices, March: invoices (of which 30% where from the bureaus) Most public institutions are able to receive electronic invoices All vendors send invoices either fully digital or through Read In-bureau The press has not been as critical as expected The technical concept is working, BUT the implementation of new processes will take a long time…

Lessons Learned The project involves almost the whole country The project is an infrastructure project The keyword is “information” to all parties of interests The process of information should have been initiated earlier in the project Very narrow time schedule (only 3 months from legal framework in place to go-live) Electronic invoicing is “only” one step on the road to make the public sector more efficient Very important to be proactive towards the press

Questions?