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E-invoicing in Estonia - changes in Accounting Law approved

On December 15, Estonian Parliament approved the amendments to the Estonian Accounting Law. Most important change was related to “original” documentation. The preferred choice for all documents is from now on electronic. In relation to e-invoices, the following dates were set in stone:
  • from March 1, 2017, Estonian public sector must be ready to receive e-invoices; 
  • from July 1, 2017 the private sector should use the Estonian e-invoice standard or the new European standard (to be published soon) when sending e-invoices to the public sector.

Currently, about 63% of the public sector institutions are already taking advantage of the possibilIty to use e-invoice receiving. Less than 10% of all invoices sent to the public sector are presently e-invoices.

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Lithuania using e-waybills since October 2016

On October 1, 2016, Lithuania commenced with its smart tax administration system i.MAS. Both e-invoice i.SAF and e-waybills i.VAZ subsystems are operational.

In mid November, there were about 46,000 registered i.MAS users. About 7,000 different taxpayers submitted more than 1,7 million waybills. Most companies are currently entering data manually to i.MAS portal, only 160 companies are submitting waybills automatically. i.SAF subsystem receives about 150,000 invoices daily.

Deputy head of Lithuanian State Tax Inspectorate Vygantas Ivanauskas says the main goal of the system is to increase transparency of business. As the system is not perfect, the transition period was extended until the beginning of 2017. Those VAT taxpayers, who start submitting the required documents in due time, will not be penalized with sanctions.

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Stockmann implementing EDI in Baltics

December 2016 marks the event many Stockmann’s suppliers have been waiting for. Now Stockmann is ready to send out EDI orders and expects EDI invoices in return.

Stockmann Group operates 500 stores in 18 countries. In the Baltic countries, one large department store is located in Riga, Latvia and another in Tallinn, Estonia. Local suppliers have been waiting for an opportunity to exchange trade documents over EDI. First Tallinn department store will adopt the innovation, Riga store will follow in the future.

In Stockmann’s home country Finland electronic data interchange is operated by Capgemini. Suppliers in Estonia and Latvia will be able to connect to Stockmann via roaming connection between Capgemini and Telema, which has been operational already since 2001. The 200 local suppliers will be informed about the EDI transition in due time.

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Getting product data from suppliers to retailers faster

While basic trade documents, orders and invoices, are moving in supply chain over EDI, master data is still exchanged in Excel files over email. A little known fact is that EDI operators transfer and “translate” also product master data.

Today, suppliers fill out various retailer defined Excel forms for product data. All retailers have slightly different product data forms, so that suppliers spend a lot of effort filling those forms. Retailers on the other hand have many people working with Excel files to get product data into their own systems.

The better option is master data automatic synchronization over global data pools. The GS1 organization has been promoting GDSN (global data syncronization network) for years, but it has not taken off in Baltics. Another alternative to sending Excel files over email is a point-to-point master data solution. Suppliers can transfer not only transactional documents, but also product data to retailers in EDI format using the help of EDI operators.

EDI operators do not only transport product data in EDI format. Their more important role is to gather all retailers’ requirements and “translate” suppliers product data in a way that is understandable to each retailer. Retailers will benefit from much faster and accurate product data, allowing for smoother stock replenishment and assortment changes. Both suppliers and retailers will benefit from avoiding low security and low reliability of emails and from getting rid of Excel-related manual work and errors.

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Why should you not send e-invoices over e-mail?

As sending PDF invoices over e-mail is something we have all practiced for many years, we could have a question of why could we not send xml-invoices over e-mail. It seems to be a simpler and cheaper solution than using services of an e-invoice operator. There are 5 main reasons for not sending real e-invoices over e-mail:
  1. E-mail as a transportation channel is not reliable (every fifth e-mail does not reach its intended recipient).
  2. No traceability: when an e-mail gets lost, you don’t know, where, when and why it got lost or whether it was sent in the first place at all. (“But we never got your invoice!”)
  3. E-mail is just as private as a postcard (remember Hillary Clinton’s 50 000 “private” e-mails?)
  4. Security risks: instead of an invoice, your ERP might be importing some malware or virus.
  5. Sending invoices over e-mail could be more expensive than sending them via e-invoice operator. This is true when you consider not only setup and running costs, but also cost of handling the missing-invoice related incidents. Missing e-mails mean missing invoices and missing cashflows. 
Using e-invoice operator comes with a bonus of additional services related to e-invoices. For example, invoice validation: do all the required fields exist? Or more advanced, like automatic checks whether a product is in assortment, or price on invoice is the same as agreed in the contract.

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