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From paper to e-Invoicing

From paper to e-Invoicing. SIS Awareness Regional Workshop, Beijing April 2011 Bruno Roussel. 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

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From paper to e-Invoicing

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  1. From paper to e-Invoicing SIS Awareness Regional Workshop, Beijing April 2011 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 P3 – Beijing Workshop – 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 approval Engineering Accountant Supporting document Scan SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  4. Electronic Invoicing in ACH Airline Financial System E-Mail Invoice Accountant AP Clerk Electronic process Finance Generate a file Invoice Data Entry • Receives Electronic Invoice • Supporting documents are compare to the invoice • Theinvoice enters the validation workflow for approval Engineering Accountant Supporting document SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  5. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  6. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  7. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  8. SIS all data world benefits ICH F1 from debtor's XML F1 XML Billed Airline Billing Entity Integrated Settlement IS-IDEC / IS-XML IS-IDEC / IS-XML / IS-WEB CSV SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  9. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  10. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  11. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  12. 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 • Migrate SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  13. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  14. 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. • SIS will use PDF by default, XML when legally required • In case of an XML invoice an additional XML file will be created • Legal XML is a subset of the IS-XML SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  15. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  16. Settlement Processes ICH ACH Central Repository Processes at time of Sales 4 3 2 NFP engine ARC COMPASS™ SIS e-Invoicing process without DS 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  17. Settlement Processes ICH ACH Central Repository Processes at time of Sales 5 2 3 6 4 NFP engine ARC COMPASS™ Sign the invoice SIS e-Invoicing with DS 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  18. SIS e-Invoicing with DS and Validation Settlement Processes ICH ACH Central Repository Processes at time of Sales 2 3 5 4 NFP engine ARC COMPASS™ Billing information file Digitally sign the invoice and Validation of DS Integrated Settlement IS-WEB IS-WEB Billed Airline Germany Billing Entity USA Digital Signature And Validation 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  19. SIS e-Invoicing with Digital signature Settlement Processes ICH ACH Central Repository Processes at time of Sales 2 3 5 4 NFP engine ARC COMPASS™ Sign the invoice Integrated Settlement Billing information file IS-WEB IS-WEB Billed Airline USA Billing Entity Germany “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 P3 – Beijing Workshop – From Paper to e-Invoicing

  20. File dispatch • As a Billed Entity: 1. One zip file containing Incoming Invoice information in IS-XML format 2. One Offline Archive zip file for Payable Invoices containing: - PDF copy of the billed invoices - Detailed Listings - Digital Signature and Verification log files - Supporting Documents • As a Billing Entity: 1. One zip file containing Invoices submitted by 3rd parties on behalf of the carrier in IS-XML format 2. One Offline Archive zip file for Receivable Invoices containing: - PDF copy of the billing invoices - Detailed Listings - Digital Signature and related files SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  21. Invoices are standardized and structured 12 Charge Categories Charge Category One charge category only allowed per invoice SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  22. 84 different possibilities to classify an invoice Charge Code Several charge codes allowed per invoice SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  23. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  24. Ground Handling / Catering Invoice sample SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  25. Supporting document SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  26. SIS e-Invoicing fields Mandatory: Ground Handling / Catering SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  27. SIS e-Invoicing fieldsRecommended: Ground Handling / Catering SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  28. Original invoice is missing: • Mandatory fields: • Charge Category: Ground Handling • AircraftTypeCode: Substitution “0” • FlightNo: CHARTER • Recommended fields • CabinClass • ContractNo SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  29. SIS invoice view SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  30. SIS supporting document SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  31. Corresponding IS-XML Line Item <LineItem> <LineItemNumber>2</LineItemNumber> <ChargeCode>Catering</ChargeCode> <Description>Catering at CLE - Condiments</Description> <EndDate>2009-05-22</EndDate> <Quantity UOMCode="EA">1.0000</Quantity> <UnitPrice SF="1">100.0000</UnitPrice> <ChargeAmount>100.00</ChargeAmount> <TotalNetAmount>100.00</TotalNetAmount> </LineItem> See ISPG for further details SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  32. Corresponding IS-XML Line Item Details <LineItemDetail> <DetailNumber>1</DetailNumber> <LineItemNumber>2</LineItemNumber> <Description>Catering at CLE - Condiments</Description> <ProductID>ER453</ProductID> <EndDate>2009-05-22</EndDate> <Quantity UOMCode="EA">1.0000</Quantity> <UnitPrice>100.0000</UnitPrice> <ChargeAmount>100.00</ChargeAmount> <TotalNetAmount>100.00</TotalNetAmount> <ContractNumber>Z7013</ContractNumber> <AircraftDetails> <AircraftTypeCode>330</AircraftTypeCode> <CabinClass>Y</CabinClass> </AircraftDetails> <FlightDetails> <FlightNo>Charter</FlightNo> <FlightDateTime>2009-05-22</FlightDateTime> </FlightDetails> </LineItemDetail> SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  33. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  34. 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 SIS P3 – Beijing Workshop – From Paper to e-Invoicing

  35. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  36. 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 P3 – Beijing Workshop – From Paper to e-Invoicing

  37. 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 – Beijing Workshop – From Paper to e-Invoicing

  38. Thank you. We’d be glad to address all your questions through the SIS Forums, register for an account at: www.iata.org/SISForum SIS P3 – Beijing Workshop – From Paper to e-Invoicing

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