Interoperability and cross border compliance on e-delivery platforms
Mita Srinivasan
10X Industry

Interoperability and cross border compliance on e-delivery platforms

In a global economy, businesses need to be able to buy and sell in a fluid manner with the fewest possible obstacles, to do this we need to break down barriers. In a special op-ed, Luis Ortega, Managing Director for Middle East, Africa, Asia at Pagero, shared his view on digital invoicing and what that means for GCC governments

In a global economy, businesses need to be able to buy and sell in a fluid manner with the fewest possible obstacles, to do this we need to break down barriers. Open interconnected business networks provide businesses global reach that extends beyond your service provider and your supplier or customer network.

Interoperability (roaming as commonly referred to in the telecom industry) in this connected world is more essential now than ever before. The idea of this interoperability for e-document exchange is still a young idea. The telecommunications sector is an example of an industry that had to embrace interoperability and it benefitted us all. However, we are quickly approaching the same tipping point for the e-procurement sector as the telecommunications sector once did.

A truly open network is also designed to integrate seamlessly with new technologies and solutions as they emerge. This brings value to businesses, as they then have the full freedom of choice for their own operations, without the burden of needing to consider what systems or processes their business partners are using.

Many governments across the globe are looking for ways to facilitate this kind of buying and selling process for goods and services. In Europe, as part of European integration standard protocol for communication between business to business and business to government, Peppol was created. It is a set of artifacts and specifications enabling domestic and cross-border eProcurement. The use of Peppol is governed by a multi-lateral agreement structure which is owned and maintained by OpenPeppol.

Since the introduction of e-procurement regulations in Europe, the scope of Peppol has grown way beyond the original B2G (business to government) intent, gaining more use in the B2B space. Organizations in countries that are importing and exporting and dealing with European trading partners using Peppol find it easier and cheaper for cross border trading. Peppol has since grown and adopted beyond Europe in several countries including Australia, New Zealand, Singapore and, soon, in Malaysia.

In the Middle East, as a region that relies on cross border trading, this kind of roaming in the e-procurement process is even more relevant and crucial.

E-procurement also brings standardization on e-invoicing models. This in turn provides real time control on transactions to facilitate indirect taxes, cross-border trading combined with compliance with global indirect taxation and regulations. In addition, it provides the opportunity to validate the buyer and seller and in markets like the GCC, provides transparency and an opportunity to connect with other businesses not only within their country but across borders.

Given the high volume of cross border regional trading activity in the GCC countries it will be advisable that any Electronic Invoicing initiatives driven by tax or commerce regulators in the region are coordinated and standardized taking in account the interoperability with other global initiatives like Peppol currently adopted by EU, Australia, New Zealand and Singapore. This will facilitate the goals of the governments to simplify and increase the visibility of the indirect taxes but also will provide businesses with enough flexibility to operate under standardized framework, and facilitate the flow of trading documents digitally, accurately and across borders. Some of the key drivers of adopting a Peppol type of e-procurement models are:

  • Global interoperability

  • Existing infrastructure and rules of engagement known to many businesses and service providers, which decreases investment and governance effort for the government

  • Efficiency; several studies demonstrate cost savings in invoice processing of 50-90% per transaction depending on levels of eInvoice adoption

  • Electronic invoicing improves and facilitate automation of data validation. Better data makes for better decisions

  • Clear, well defined standardized format and contents facilitates compliance

  • In a fully digitalize trading documents flow (orders, dispatch advises, invoices, payment instructions), the Tax authorities can get easily closer to the data source creating better control for governments.

  • Connect once, reach all

Companies like Pagero are building the world’s largest open business network. With a cloud-based network, companies can now reach any business, anywhere in the world – no matter how many borders their operations cross. These companies partner with the leading players to take care of the technical and regulatory requirements across the entire order-to-cash, purchase-to-pay and freight processes, to provide data accuracy and security, transparency and real-time visibility.

This level of interoperability helps organizations streamline their flow of business documents, making it possible for them to reach as many other companies as possible in both the private and public sectors, worldwide.

Pagero, for example, works with organizations such as OpenPeppol, EESPA (the European E-Invoicing Service Providers Association, VeR (the German e-invoicing association) and NEA (the Swedish Electronic Business Network) to help standardize and smooth the e-invoicing process between businesses, institutions and across borders. This gives them a broader understanding of the market but also makes it easier for their customers to connect with their business partners.