From paper to e-Invoicing

1. From paper to e-Invoicing Kuala Lumpur ICH UG 2010 - Breakout Session Bruno Roussel

2. Agenda Invoicing today Problems with the paper cycle SIS e-Invoicing benefits SIS is not just an IT project The steps to consider IS-Web vs. IS-XML SIS e-Invoicing Charge Category Charge Code Invoice structure Sample Interoperability between IATA SIS and IATA e-Invoicing Best practices Question & Answer SIS – From Paper to e-Invoicing

3. Paper Invoicing in ICH world today Airline Financial System Accountant AP Clerk Typical paper process Finance Print Paper Invoice Mail Invoice Invoice Data Entry • Receives Paper Invoice • Supporting documents are compare to the invoice Photocopy • Theinvoice enters the validation workflow for approbation Engineering Accountant Supporting document Scan SIS – From Paper to e-Invoicing

4. Problems with the paper cycle • Needs people to consolidate the invoices and supporting docs • Needs people to put it in envelopes etc • Needs to be sent somewhere, possibly delivered to a collection point first • Needs to be AWBd, couriered or posted • Needs someone at the other end to receive it, take it out of envelopes and distribute it • Needs someone to check it’s all there • Needs someone to check it reconciles with settlements • Etc etc etc

5. Paper versus Electronic Invoice processing Typical paper process Airline System Airline Manager AP Clerk Supplier Print Paper Invoice Mail Invoice • Receives Paper Invoice • Approves Invoice on Paper Invoice Data Entry The Internet E-invoicing process 0111000110101001001110101011 01110001101010010011101 Airline System XML Supplier Transmit Invoice Electronically Transmit Invoice Electronically SIS – From Paper to e-Invoicing 5 October 2010

6. SIS e-Invoicing benefits Reduce cost of paper process Improve efficiency: Data quality Speed of information Automation Access to detailed information Audit trail Uses IATA IS-XML e-Invoice Standard Contributes to the green initiative SIS – From Paper to e-Invoicing 6 October 2010

7. SIS is not just an IT project You have to reengineer the current process to adapt to SIS: • Will you generate Invoices in each department or centrally ? • How will you Capture detailed information of the invoice at the source? • Which level of automation would you like to achieve? SIS – From Paper to e-Invoicing

8. SIS is not just an IT project • How to reconcile the invoices against clearing house settlement? • Today claims may not match IDEC or invoice • Tomorrow all the information will be consistent • Will you reconcile invoices against purchase order? • Reconcile the invoices against your account posting based on: • Your operational system • Contract database • Aircraft schedules Define your objective SIS – From Paper to e-Invoicing

9. The steps to consider 1/2 • Define a project team including all involved parties (Finance, IT…) • Depending on your objectives define the changes in your business processes and IT systems: • Analyze the process changes : • Creation of invoices for example: • Gathering all mandatory and recommended information for the invoice • Numbering of invoices unique per billing entity per year (10 AN) • Generating invoices out of your financial system (e.g. SAP) • Validation/ approval of outgoing/incoming billings • Reconciliation SIS – From Paper to e-Invoicing

10. The steps to consider 2/2 • Depending on your objectives define the changes in your business processes and IT systems: • Analyze the impact on your IT system: • Third party software (Product Road map) • In-house systems • File exchanges • ERP • Workflow • … • Develop • Test • Implement SIS – From Paper to e-Invoicing

11. IS-Web vs. IS-XML • IS-XML: • Could be generated/ processed from different systems including ERP or financial systems • Easy to handle large amount of invoices • Ease the use of workflow validation • Increase IT project requirements • IS-WEB: • Allows multiple locations to capture their invoices easily • Suitable for small amount of invoices • Workflow validation could be set up in SIS • Simplify SIS implementation • Payable invoices as PDF view

12. SIS e-Invoicing SIS will allow legal e-Invoicing NOTE – not legal in some countries yet PDF or XML could be used as the legal invoice. Billing entity choice In case of an XML invoice an additional XML file will be created Legal XML is a subset of the IS-XML SIS – From Paper to e-Invoicing 12 October 2010

13. SIS e-Invoicing The files may need a Digital Signature (DS) This digitally signed file should be archived in accordance with legal rules You may have to print the incoming invoice in your country if the electronic format is not considered as legal: You can do this yourself, or You can ask the billing entity to send you a paper copy, but this will be charged as defined in IATA RAM Chapter A13 Please refer to the plenary presentation for more details about legal compliance SIS – From Paper to e-Invoicing 13 October 2010

14. SIS e-Invoicing process without DS Settlement Processes ICH ACH Central Repository Processes at time of Sales 3 2 4 NFP engine ARC COMPASS™ 1 Billing information file Integrated Settlement Create invoice IS-WEB IS-WEB Billed Airline Billing Entity IS-XML IS-XML Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Usage File Legal PDF Legal XML Legal PDF Legal XML e-Invoice SIS – From Paper to e-Invoicing 14 October 2010

15. SIS e-Invoicing with DS Settlement Processes ICH ACH Central Repository Processes at time of Sales 3 6 2 5 4 NFP engine ARC COMPASS™ Sign the invoice Billing information file Validate the DS Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Entity “Validation DS” Company “Digital Signature” Company IS-XML IS-XML 1 Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Usage File Legal PDF Legal XML Legal PDF Create the invoice Legal XML e-Invoice SIS – From Paper to e-Invoicing 15 October 2010

16. Billed Entity: One zip file per billing category will include for every billed invoice: PDF invoice with embedded DS OR A copy of the invoice in PDF and the Legal XML file and a separate DS creation file and a separate Legal XML file DS verification log AND PDF Listing including line item details AND IS-XML Supporting document if any Billing Entity: One zip file per billing category will include for every billing invoice: PDF invoice with embedded DS OR PDF copy of the invoice and Legal XML file and a separate DS creation file PDF Listing including line item details Supporting document if any File dispatch SIS – From Paper to e-Invoicing 16 October 2010

17. Charge Category • Invoices are standardized and structured • 12 Charge Categories One charge category only allowed per invoice SIS – From Paper to e-Invoicing

18. Charge Code • 84 different possibilities to classify an invoice Several charge codes allowed per invoice SIS – From Paper to e-Invoicing

19. Invoice Structure Composed of : • Invoice Header • Line Item • Line Item details (replace supporting document) Including : • Legal fields • Required by law • Mandatory fields • Substitution allowed for one year • Recommended fields • R for recommended for one year and will become mandatory • RA for recommended always • Optional fields • Additional information not required to reconcile, may be used within Alliance

20. Ground Handling / Catering Invoice sample

21. Supporting document

22. SIS e-Invoicing fields Mandatory: Ground Handling / Catering SIS – From Paper to e-Invoicing

23. SIS e-Invoicing fieldsRecommended: Ground Handling / Catering SIS – From Paper to e-Invoicing

24. Original invoice is missing: • Mandatory fields: • Charge Category: Ground Handling • AircraftTypeCode: Substitution “0” • FlightNo: CHARTER • Recommended fields • CabinClass • ContractNo

25. SIS invoice view

26. SIS supporting document

27. Printinganddistributionservices Paper Interoperability between IATA SIS and IATA e-Invoicing Invoices from SIS can be routed to IATA e-Invoicing for additional services, such as workflow, and printing/distribution services IS-XML, IS-IDEC, IS-Web CH Airline Configurable Routing(airline specific) PAX, Cargo, MISC IS-XML, IS-IDEC, IS-Web IS-XML, IS-Web CH Associate MISC Invoice receiving Airline Digital signing Archiving Premium Functionality (IS)XML, Web Airline andnon-airline (IS)XML, Web MISC

28. Printinganddistributionservices Paper Invoice Senders Invoice Receivers PO, Status, Codes ,… ERP XML • Fiscal dematerialization(digital signature + storage) • Premium functionality: • Invoice validation • PO & receipt match • Routing & approval • Dispute resolution • Payment status • Reporting ERP XML File Transfer Invoice +supportingdocuments Invoice +supportingdocuments XMLCSV Web receipt Web entry Web Scanningand datacaptureservices Paper

29. Best Practices • e-Invoicing is a complete change for your organization, benefit from that to design optimal processes • Use of Charge Category and Charge Code allows appropriate routing of the invoice for validation, and GL posting • Use segregation of tasks to ensure better controls on overall validation process • The sooner the better, project could be implemented in several phases, but be ready to process incoming billing from day one in an electronic manner SIS – From Paper to e-Invoicing 31 October 2010

30. Best Practices • Automate the reconciliation with the maximum of electronic data possible, general ledger posting against CH settlement... • Automate the matching of PO and invoices or contract • Generation and integration of electronic data should be automated. • Leveraging your existing ERP system will ensure an all electronic data world • Use the IATA IS-XML e–Invoice standard, develop once, connect to all. SIS – From Paper to e-Invoicing 32 October 2010

31. Question & Answer e-Invoicing contact in IATA: • Invoicestandards@iata.org for any request to add information in the IS XML such as charge category charge code or new business requirement • e-invoicing@iata.orgfor any question related to InvoiceWorks SIS P3 – ICH User Group – From Paper to e-Invoicing

32. Thank you. Email: sis@iata.org SIS Website: www.iata.org/sis SIS – From Paper to e-Invoicing 34 October 2010