The E-invoicing Glossary

CONTENTS

Approved Workflow Automatic Reconciliation B2C, B2B, B2G Certificate Authority Chorus Pro Portal Days Sales Outstanding (DSO) Digital Safe Dynamic discount eIDAS Regulations Electronic Data Interchange (EDI) Electronic invoice Electronic signature E-reporting European E-invoicing Service Providers Association Federation of Trusted Third Parties GS1 Integrity Interoperability National Agency for Information Systems (NAIS) National Electronic Billing Forum (NEBF) Optical Character Recognition (OCR) Order 2014-697 PEPPOL Post-audit clearance Purchase bill Qualified Certificate Reliable Audit Trail Reverse factoring SAF-T Sales bill Smart PDF Split payment State Financial Informatics Agency (SFIA) Time stamping UN/CEFACT CII UBL Web scraping XML Format

Approval Workflow

A workflow provides a flow of operations that needs to be done to complete a larger project. An approval workflow can automate a process such as sending an email to a vendor when an invoice changes its status. The workflow and associated approval procedures will create a business logic that is based on certain principles. Workflow rules assign tasks to users or update certain fields, while approval processes allow users to submit sensitive-recording documents, such as contracts or purchase orders, to other users.

Automatic Reconciliation

Automatic reconciliation is used to verify the consistency between invoices, purchase orders and goods received. There are sometimes discrepancies or differences between this data, which can be due, among other things, to entry errors or oversights. Automatic reconciliation is therefore a tracking, comparison and control operation that allows inconsistencies to be identified and then searched for the cause. The ultimate goal is to ensure the accuracy of accounting. ERP-type software eases this process for businesses.

B2C, B2B, B2G

The B2C, BtoC or business to consumer, represents companies that cater to individuals, such as a specialized retailer (bookstore, clothing store, etc.), or a supermarket. The sale of products or services is done directly with customers for personal use. B2B, BtoB or business to business, refers to a company that offers professional services to other companies. B2B companies’ customers are looking for a real partnership with the provider. The sales and purchase processes are longer than for the B2C. The B2B invoice is therefore one sent between companies. The B2G, BtoG or business to government, concerns companies that devote part or all of their business activity to government organizations and administrations. The sales and purchase processes are less flexible than for the B2C and B2B: contracts are signed following a call for bids where companies must provide official documents (technical specifications, certification of environmental standards, etc.) and comply with more rigid processes.

Certificate Authority

The certificate authority is a trusted third party capable of providing a cryptographic key that ensures and authenticates the identity of issuers and the data exchanged. It issues electronic certificates to assure the protection of digital exchanges, authentication of data and signatures, but also encryption. There are three types of certificates:

• The SSL encryption certificate, ensuring the integrity and security of the data exchanged between a website and the browser through the HTTPS protocol
• The authentication certificate, which verifies and authenticates the identity of the issuers
• The signature certificate, guaranteeing the value of signing an electronic document

Any certification authority issues an electronic certificate that guarantees the identity of an applicant and the security of the data.

Chorus Pro Portal

As of January 1, 2020, all companies providing goods or services to the French administration are required to issue electronic invoices. These must be deposited on the Chorus Pro platform, comply with the structured UBL and UBL-mixed formats and include certain mandatory fields.

Days sales outstanding (DSO)

DSO (days sales outstanding) is one of the components of the working capital requirement. It is a performance indicator that designates a customer’s average payment time. It is particularly useful, if not indispensable, in the areas of collection, finance, and accounting. The DSO indicates the amount of time it takes a company to collect a payment (cashing) after the invoice is issued. The objective is therefore to minimize the DSO rate : if it is low, it means that the cashing time is satisfactory. Using this performance indicator, companies can measure the efficiency of collection techniques and identify areas for improvement.

The accounting and countback methods are the two ways a company calculates its DSO.

• The accounting method: assessing, over a specified period of time, the ratio of turnover to receivables.
• The capital depletion method: deducting TTC turnover from the financial stock each month before adding up the number of days of the corresponding months.

Digital safe

A digital safe is a space where important documents are stored electronically. This space must be secure, confidential and provide optimal archiving to guarantee not only the proper sharing of data but also ensure protection against incidents such as intrusion, failure or data loss. Its interest lies largely in the effectiveness of its backup and security system, but a digital safe must also have very strong ergonomic and use guarantees (aka “probative value“). Notably, these include:

• Interoperability
• The infrastructure’s authentication performance
• The provider’s ability to ensure the integrity of the data and to reproduce it

Dynamic discount

Dynamic discounting, or dynamic reduction, refers to a set of conditions to speed up a payment between a buyer and a supplier against a discount or price drop. Dynamic discounting allows you to determine payment terms that automatically vary the discount depending on the prepayment date. Thus, the earlier the payment is made, the greater the discount. It also enables both the buyer and the supplier to agree on an advance payment date and a discount in the case of a one-time payment. In the absence of contractual or pre-arranged prepayment terms, or when the payment date does not meet the specified discount terms, dynamic updating methods can be used for business-to-business transactions. With these methods, suppliers can be paid earlier, and buyers can vary the number and size of the discounts they receive. In the Supply Chain, dynamic discounting can allow the supplier to grant a discount for the early payment of its invoices. In this context, the amount of the reduction and payment deadlines are negotiable freely and quickly.

eIDAS Regulations

Regulation 910/2014, known as eIDAS, ensures the security of electronic transactions in the EU internal market. It establishes common conditions between citizens, businesses and public authorities to ensure the authenticity of data and digital interactions. However, the main users affected by eIDAS regulations are public sector bodies and trusted service providers in the European Union. With the emergence of the digital market, the eIDAS regulation facilitates exchanges, including ensuring the security of electronically signed documents and repealing the 1999/93/EC directive.

Electronic Data Interchange (EDI)

EDI allows partner companies to exchange invoices, quotes, purchase orders, etc. in dematerialized form, replacing physical exchanges of documents. The communication of these documents is done in a standardized electronic format, and only between computers connected by dedicated links, or by a network that can be private or value-added (VAN). To structure the data, international reference standards, such as EDIFACT, and XML-type syntax languages are used. Before sending, companies must agree on the terms of standards and version. Provided these terms and conditions are met, all commercial documents can be exchanged electronically by the EDI. The key is reduced costs and errors, faster processing and a better relationship between business partners.

Electronic invoice

An electronic invoice, or e-invoice, is a dematerialized document transmitted by a supplier to its customers via a secure computerized data transit platform. Popularized by the legal recognition of electronic signatures, e-invoicing saves time and physical storage space. Note: whether it is dematerialized or issued in paper format, an invoice must always mention certain information to be compliant and eligible for a tax deduction (signature, fees, expense notes, VAT calculation, etc.).

Electronic Signature

The endorsement of a digital document can be done by a unique authentication system: electronic signature. Unlike the handwritten version, which is visual, the electronic signature is composed of a series of characters. Authorized since March 13, 2000 by the French State, when the law came into force, the electronic signature has the same characteristics as a traditional signature: according to Article 1367 of the Civil Code, “it consists of the use of a reliable identification process guaranteeing its connection to the act to which it is attached.” The electronic signature, like the traditional signature, marks the agreement of the signatory. However, a digitally-signed document cannot be falsified: its authenticity is therefore validated by a real electronic seal, which overrides the security of a classic signature.

E-reporting

E-reporting, or real-time reporting, refers to architectures in which a state requires its taxpayers to declare on a central server managed by a tax authority the invoices data exchanged with its customers or suppliers. It is an extraction of data allowing the administration to automate controls and fight VAT fraud. Depending on the country, reporting files are transmitted daily, monthly or quarterly.

European E-invoicing Service Providers Association (EESPA)

EESPA is a non-profit trade association founded in 2011. It operates across Europe to promote e-invoicing service providers and now has more than 60 members and associates. The role of EESPA is to provide and develop certain services for its members. These include:

• industry representation
• engagement in public political debate
• promoting e-invoicing and interoperability
• promoting best practices in European forums

Federation of Trusted Third Parties

Founded in 2001, the Federation of Trusted Third Parties is a digital security label. Now recognized as a pillar of the security of dematerialized exchanges and the preservation of information, it brings together professionals of dematerialization, divided into four colleges according to their activity. These include software editors, service providers, institutional structures and user representatives. The foundation’s goal is to contribute to the development of dematerialization in a reliable and safe way. Its role is to promote trusting relationships between dematerialization players, improve the quality and security of services at the heart of the digital economy, and to ensure the defence of users, their rights and the interests of trusted third parties. The Federation of Trusted Third Parties

• produces references and labels,
• provides training,
• makes tools, products and services available to entities it intervenes with in order to defend their rights and to protect them from the dangers of digital technology.

GS1

Formerly known as GENCOD from 1977 to 2005, GS1 is a global organization specializing in standardization. It deals with coding methods used in the Supply Chain, including EAN barcodes. In Europe, product coding meets the specifications of EAN 13. Barcodes usually have 8 to 13 positions and a series of numbers placed on segments, which varies depending on the nature of the products. Note: This coding varies between a manufacturer or distributor and differs between variable weight items and individual items. In the latter case, the manufacturer’s codification may vary depending on the nature of the product: fruits and vegetables, books (ISBN), magazines (ISSN), etc.

Integrity

Electronic billing is based on three main pillars: authenticity, integrity and legibility. In this context, the concept of integrity is to ensure that the content of an invoice is unalterable. This must be true both during an exchange and throughout the legal time it takes to archive the invoice. This takes:

• 5 years in the commercial field
• 6 years in the taxation field
• 10 years for accounting documents

To ensure the inalterability of invoices, the anti-fraud VAT law, which came into force in 2018, requires that any data relating to an invoice registered in a database be sealed during its publication (paper printing or electronic edition).

Interoperability

Interoperability is when a product or system can work with other existing independent products or systems or to be created, with no limit on access or implementation. This reciprocal compatibility makes it easy to create a network and transfer data from different programs. The lack of digital interoperability creates problems for businesses and individuals alike: Illegibility of a document that can only be read in a single software, incompatibility of tools, inability to connect, communicate or dialogue between applications. To avoid these difficulties and the replacement or reprogramming of tools, it is advisable to choose a so-called “universal” platform, which can work in an existing IoT ecosystem. In fact, interoperability plays a crucial role in 3D modeling of buildings and building information modeling (BIM), and has become indispensable to the development of industry 4.0.

National Cybersecurity Agency of France

Created by decree in July 2009 to replace the Central Directorate of Information System Security, the National Cybersecurity Agency is a French service. Linked to the General Secretariat of Defence and National Security, its ambition is to ensure cybersecurity for all. To do this, the agency proposes rules to strengthen security, provides a monitoring service against cyberattacks (detection, alert and reaction), but it also provides technical assistance to operators of vital importance (OVI), administrations and businesses.

National Electronic Billing Forum

The National Electronic Billing Forum is the national forum for electronic invoices and public markets, and is a mirror forum of France. Founded in January 2012 on the initiative of the Directorate General of Business, it is an organization belonging to the Economy, Industry and Digital Ministry.

Its role is to ensure a broad consultation between French public and private actors in the context of the deployment of e-invoicing and electronic public markets on the national territory. It is also a driving force for the definition of public policy and regulations.

The forum also serves as a meeting place and consultation for private and public players in France who are interested in the subject of digital billing or are involved in its implementation at national or international levels. This is where some proposals for national positions are developed, which will be put forward by representatives to European forums and foreign partners.

Optical Character Recognition (OCR)

This technique allows a computer system or application to automatically read and store typed, printed or handwritten text, through the interpretation of an optical process (a scan or a photograph). As a result, it considerably saves time. OCR features allow for the extraction and editing of the textual part of an image in a text processing software. Some, even more advanced, aim to imitate the human ability to recognize objects.

Order 2014-697

Order No. 2014-697 of June 26, 2014 sets out the rules for the generalization of electronic billing. The aim is to impose the use of dematerialized invoices between public persons and suppliers via a shared digital platform or “billing portal”.

The order requires suppliers dealing with public persons to send them invoices electronically. At the same time, public persons must be able to accept these dematerialized invoices. The obligation was imposed in four maturities between 2017 and 2020, in descending order of corporate size (large groups first, average-sized groups in 2018, SMEs in 2019, micro-enterprises in 2020).

PEPPOL

The PEPPOL (Pan-European public procurement on-line) network allows business partners to transmit standardized electronic documents. It provides artifacts and technical specifications that enable the electronic procurement of cross-border markets. These modalities can be implemented in existing eProcurement solutions and eBusiness exchange services, to make them inter-operable between different European systems. PEPPOL allows for the exchange and standardization of electronic documents (invoices, catalogues, purchase orders). Its use is governed by multilateral agreements held and maintained by OpenPEPPOL. Note: Buyers and suppliers alike can choose their PEPPOL access point provider to connect to other network participants.

Post-audit clearance

Post-clearance audit, defined by the revised Kyoto Convention, refers to a set of measures used by border customs to ensure the authenticity and accuracy of the declarations. To do this, the customs administration reviews the books, files, business systems and commercial data held by the individuals concerned. This control methodology allows customs and border control authorities to apply a multi-dimensional approach based on risk assessment. This means moving to a strengthened system of administration based on auditing, not just transactions. Transaction controls are those applied to each shipment done at border crossing. It is a physical examination and various checks of licences and permits, but also of the value, origin or classification of goods.

Purchase bill

A purchase bill, or invoice, is a sales contract. It attests to the good or service that a supplier must deliver or perform for a customer in exchange for a specified amount. To be compliant, it must include several elements: name and address of the customer and supplier, SIRET number, date of purchase, invoice number, intra-community VAT number, etc. An invoice is also and above all an accounting document. Please note that depending on the nature of the purchases, consumables, durable goods and services must be accounted for in separate accounts.

There are several types of invoices:

• simple, without reduction
• with commercial or financial reduction, calculated before VAT
• with associated purchase costs such as transportation
• insurance or commissions
• with advances and down payments

Qualified certificate

A certificate qualified by an electronic signature (CES) guarantees the integrity of a registered document. According to EU Regulation No. 910/2014, it is used to build trust between consumers and businesses. It also meets the requirements of Annexes I and II of the Regulation, concerning certification service providers. The qualified certificate is issued to the signatory in the form of a smart card or USB stick. The certificate corresponds to the level 3 security of the eIDAS regulation regarding electronic signatures.

Reliable Audit Trail

The Reliable Audit Trail is a mandatory device that allows the issuer of an invoice to track and trace all transactions (order, billing, discount, deposit, etc.) since the creation of the document. Since the reliable audit trail allows all accounting steps to be traced, transactions to be justified (provided they have the original documents) and to guarantee the authenticity of the exchanges (goods or services sold), companies have the opportunity to accept electronic invoices that have not yet been signed. It is therefore possible, with the reliable audit trail, to trace all the steps of an invoice (paper or digital) and to check for any accounting discrepancies.

Reverse Factoring

Reverse factoring is a financing solution. It requires the assistance of three entities: a customer, a supplier and a factoring company. Reverse factoring differs from conventional factoring in that it is the customer and not the supplier that initiates this method of payment. In this case, the customer offers to pay their own bills in exchange for a discount.

These invoices are financed by a bank or company that specializes in early factoring. The customer pays the bill to the company concerned at the deadline defined by the company. For suppliers, the advantage is to be paid upfront. For its part, the customer can continue to benefit from payment deadlines while obtaining a discount for the outright payment. In any case, this is a major advantage in managing its cash flow.

SAF-T

SAF-T is the acronym for standard audit file for tax, an international standard for the dematerialized exchange of accounting and tax data. This is a standard XML file, defined by the Organisation for Economic Cooperation and Development (OECD).

This standard specifically applies to the transmission of accounting data between an organization and a national tax authority or external auditors. In this context, it organizes the archiving and transmitting of documents to the relevant administrations.

The SAF-T standard responds to a desire by tax authorities to have a common foundation to improve performance. Systematizing the use of computerized audits allows them to improve the results of tax audits, combat fraud, increase tax revenues and share data from these inspections more easily with other countries. Following the example of Portugal, which has been using it since 2008, Luxembourg, and even France, more and more European states are choosing to adopt this standard to generate electronic tax returns.

Sales Bill

A sales bill is a document used by a supplier to establish a debt. It is a result of providing a service or providing a good to the customer. In France, each company is free to format its sales invoices, provided that they contain certain mandatory information: the nature of the good or the service, quantity, price, VAT (if any), date of issuance, VAT numbers of the supplier and the customer.

Smart PDF

The acronym PDF means portable document format. It is used to view an electronic document, regardless of any hardware, software or operating system. It was developed by Adobe® Systems with the ambition of creating a universally compatible file format–today it has established itself as the standard for document exchange.

So-called “smart” PDFs are able to understand field verification, maximum length or the type of data entered. Access and modification rights may be limited to ensure the security of the transferred data. The user can select text and even perform searches. They can also add their electronic signature. All of this makes it a more customizable format.

Split Payment

Split payment refers to fragmenting a single, complete amount into multiple simultaneous transactions but with different payment methods. This method involves using multiple payment cards belonging to the same user or multiple parties, all involved in the transaction. Split payment involves many technical challenges because, by default, computer systems dedicated to financial transactions will treat these transactions as a single atomic entity. Financial systems are used to processing transactions from start to finish, not managing split payments. This has an impact on costs, reporting obligations and the fight against fraud, not to mention the partial information that is stored in the trading system.

State Agency for Financial Information Technology (AIFE)

It is a national competent service (NCS) linked to the Ministry of Economy and Finance. Its role is to define and implement the state’s financial IT strategy, under the decree of February 11, 2005, amended by the decree of May 7, 2014. As such, it offers dematerialization solutions for the public and businesses and also oversees the Chorus Pro portal.

Time stamping

This mechanism associates a date and time with computer data or an event. It therefore specifies the moment an operation was performed. With the widespread use of electronic signature solutions, time stamping features are more essential than ever. They allow organizations to record the exact moment that a message, document or software has been signed. In this context, many software, like Microsoft Office, incorporate time stamping functions.

The role of time stamping is even more essential in stock market transactions or certain court proceedings. It is also used for audits and record keeping because it proves whether a digital certificate was valid or not when it was used. However, time stamping can only bring real added value if it is secure. Otherwise, it may be exposed to legal problems and non-compliance. Note: Without time stamping, organizations are unable to prove whether signatures were done before or after a certificate was revoked.

UBL

UBL (universal business language) is an open library of XML business documents, designed for commercial correspondence in procurement and transportation. The UBL electronic format allows for the exchange of, among other things, purchase orders, invoices and international airway bills.

Derived from the EDI and XML standards, it was developed by the OASIS Technical Committee as well as by several industry data standards bodies. UBL is designed to adapt directly to existing practices, whether legal or commercial. This format eliminates the recomposition of paper data in existing business correspondences. It also provides an entry point to e-commerce for SMEs.

UN/CEFACT CII

The Center for Trade Facilitation and Electronic Business is a United Nations agency. As such, it is also known as CEFACT-UN. As for the “CII” component, it means cross-industry invoice. The role of this entity is to ensure the interoperability of information exchanges between the public and the private sector, and to promote close collaboration between governments and businesses.

UN/CEFACT has developed:

• the ‘framework formula‘, a standard applied to UN trade documents
• UN/EDIFACT, an international standard for electronic exchanges.

Among its many works, this organization has:

• restructured different groups of the UN/CEFACT Forum
• popularized processes that conform to the ebXML language
• developed open development process, a new way of working
• defined a new e-commerce-specific architecture that facilitates data exchange

Web scraping

Web scraping automatically extracts data from one site via another site, program or software for reuse. Several sites or programs allow for web scraping. Import.io and kimonolabs.com are among the best known and easiest to use.

Unlike copy and paste, web scraping allows for retrieval of the contents of a website without distorting its structure–which is why it is often used to make competitor monitoring. The process can also be hijacked to create content on its own site from competing content… Thus, to the extent that web scraping allows the entire site to be copied under a different domain name (and to plagiarize), it can be seen as a way to divert traffic and thus fall under “negative SEO”. When unmasked, sites that use this practice are blacklisted by Google.

XML Format

XML (eXtensible Markup Language) is a computer language used since 1998 to simplify data exchange on the Internet. XML is quite close to HTML (function and structure) but it is an improved and much more open language that allows for the creation of new markups. Easily accessible, it does not require extensive coding knowledge and can be written using a simple word processor. Beware, a single error in the form can break the processing chain and cancel the XML format.