Converga InvoiceMe (einvoicing) Report 1 of 3. Whitepaper

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1 Converga InvoiceMe (einvoicing) Report 1 of 3 Whitepaper

2 einvoicing in the Asia Pacific; Singapore and Hong Kong Focus As many economists and politicians point out, we are at the beginning of the Asian century. It is impossible to deny the large leaps forward Asia-Pacific countries and companies have made over a short period. This is undoubtedly set to continue. Despite this, there remains significant accounts payable cost and compliance efficiencies where Asia-Pacific companies lag behind similar companies in Europe and North America. This capability is electronic invoicing (einvoicing). This paper is the first of three from Converga which will introduce einvoicing, set out the legalities surrounding einvoicing and indicate the main benefits of einvoicing for your company. 2 Whitepaper - Converga InvoiceMe (einvoicing) Part 1

3 About einvoicing What does einvoicing involve? einvoicing is simply the complete online automation of a companies accounts payable process. This involves removing all paper invoices from the accounts payable process in order to push cost savings, efficiency gains and increase visibility and control over your companies payables. The Converga InvoiceMe einvoice solution uses a combination of ed PDF invoices, Electronic Data Interchange (EDI) and the Converga Portal to deliver invoices from your supplier electronically to your AP or ERP solution bypassing the traditional methods of invoicing. These invoice processing methods and the full benefits for your company of using this combination of methods for einvoicing will be explained in further detail in later papers. For now, it is surprising considering that the Asia Pacific is such an innovative landscape that the region has so far lagged behind much of the globe in introducing einvoicing. Companies in European countries, such as Italy, Spain, France and Norway have already begun realising significant benefits from einvoicing and in fact einvoicing is predicted to grow 20% in Europe year by year. Similarly companies in North and South America are forging ahead with introducing einvoicing. However the rate of einvoicing in either B2B or B2G transactions in most Asian Pacific countries is some of the lowest world wide. One reason for this may be the lack of understanding of the legalities surrounding einvoicing. einvoicing legalities: Is einvoicing legal? Yes, einvoicing is legal in most Asia Pacific nations. Whitepaper - Converga InvoiceMe (einvoicing) Part 1 3

4 einvoicing in Singapore and Hong Kong Both Singapore and Hong Kong have a liberal approach to einvoicing and as such have little direct legal requirements or restrictions on einvoicing. 1 einvoicing has been legal in Singapore since 2003 and from May 2008 onwards the government has mandated the use of its vendors@gov einvoicing solution. As stated in the Inland Revenue Authority of Singapore (IRAS) document, Goods & Services Tax: Keeping machine sensitive records and electronic invoicing, you do not need to seek approval from the IRAS to send or receive electronic tax invoices. So put simply Singaporean tax authorities accept einvoicing. For einvoices it can be helpful to understand the legislation around electronic signature s for einvoices. For Singapore, electronic signatures are mentioned as a possible (but not mandatory) mechanism for ensuring adequate controls. When using e-signatures for such purposes it should be noted that Singapore has one of the most liberal e-signature laws in Asia 2. Similarly to most countries the mandatory period for storage of invoices is seven years. All of this points to a favourable economic & legal environment in which to utilise einvoices. Hong Kong has very few legal requirements for einvoicing. Only the Electronic Transaction Ordinance, has been enacted to facilitate the use of electronic transactions for commercial or other purposes 3. This ordinance places very few restrictions on the processing of einvoices. So from a business perspective einvoicing is a completely legal method for sending invoices in Hong Kong, and there is no need to seek permission to transact einvoices from the Hong Kong Tax Authorities. In fact, einvoicing already accounts for significant percentage of B2G transactions in Hong Kong. Similar to Singapore, Hong Kong does mandate that einvoices should be stored for a minimum of seven years Ariba Country Guide Compliant einvoicing, A guide for creating tax-compliant electronic invoices 3 Ariba Country Guide Compliant einvoicing, A guide for creating tax-compliant electronic invoices 4 Whitepaper - Converga InvoiceMe (einvoicing) Part 1

5 Momentum growing for Government mandated einvoicing in Asia Pacific As with most things to do with business, Asian-Pacific countries are catching up quickly to western economies. For example, the Chinese government has recognised the significant improvements that can be made to productivity through einvoicing. Only recently, Eight Chinese government agencies jointly announced guidelines to promote ecommerce and einvoicing. The guidelines are necessary as data showed that the number of e-invoices had increased by 40 % in 2009 from In the past, the cost of handling an invoice was about 30 (US$ 39.70). After the e- invoice system is implemented, the savings are expected to reach up to 80% 4. This is a clear sign that Asian - Pacific governments are catching on to the benefits of e invoicing. 4 E Invoicing Platform, China Issues guidelines to promote e commerce and e invoicing Whitepaper - Converga InvoiceMe (einvoicing) Part 1 5

6 Where is the ROI from einvoicing for your company? Converga InvoiceMe einvoicing benefits for your company: Immediate invoice delivery from supplier to your AP or ERP solution, maximising on-time payments and approval einvoicing brings savings of up to 80% compared to traditional paper based processes. Increased employee productivity Improved visibility and control over your companies liabilities Fewer late payments and penalties Improved regulatory compliance, full visibility to the invoices coming in electronically from your suppliers through Converga Portal Converga InvoiceMe einvoicing benefits for your suppliers: No cost for suppliers to send einvoices Increased efficiency and faster settlement times Improved visibility and control Quicker dispute resolution 5 5 Pay-Stream Advisor, Electronic Invoice Management 6 Whitepaper - Converga InvoiceMe (einvoicing) Part 1

7 Frequently asked questions Is einvoicing legal throughout the Asia Pacific? Yes. einvoicing is legal in all the major economies in the Asia Pacific. How much does einvoicing cost suppliers? einvoicing through the Converga InvoiceMe solution is free for suppliers. What are the main goals of einvoicing? einvoicing aims to improve your companies productivity by removing all paper invoices and enabling a fully automated AP process. For more information For more information on Converga and solutions please contact: Australia Phone: enquiries@converga.com.au Web: New Zealand Phone: sales@converga.co.nz Web: United States of America Phone: (630) enquiries@converga.net Web: Whitepaper: Converga InvoiceMe (einvoicing) Report 2 of 3 Whitepaper - Converga InvoiceMe (einvoicing) Part 1 7

8 About Converga Converga is a wholly owned subsidiary of New Zealand Post. Converga currently has offices in Australia, United States, New Zealand and Philippines. These offices operate with over 1200 staff. Converga specialises in, among other things, working with our clients to streamline their accounts payable departments and financial functions. This is achieved through the Converga InvoiceMe einvoicing solution. Converga is focused on expanding our expertise throughout the Asia Pacific to help our clients focus on their core capabilities. As a business process outsourcer, Converga has had considerable success, with clients from many sectors including government, banking, retail, mining, education and transportation companies. Visit for more information.