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E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

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Page 1: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

E-Invoicing & Legal Aspects

RA42 Presentation

Michael Uebber, LH

SIS – Simplified Interline Settlement

Page 2: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 2

Overview of this Presentation Introduction

Introduction to E-Invoicing E-Invoicing with Integrated Settlement

Legal Aspects of E-Invoicing Legal Obligations of E-Invoicing

Page 3: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 3

Introduction toE-Invoicing

Page 4: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 4

The typical paper process is fragmented and discontinuous

e-invoicing process

e-invoicing platform

The Internet

emailXML

01110001101010010011101

Supplier

• Receives Email• Can view Invoice

On-Line

Airline AP Manager

Airline AP System

0111000110101001001110101011

TransmitInvoice

Electronically

TransmitInvoice

Electronically

Print PaperInvoice

Mail Invoice

Supplier• Receives Paper

Invoice• Checks Invoice

on Paper

Airline Manager

Invoice DataEntry

AP Clerk

Airline AP SystemTypical

paper process

Page 5: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 5

E-Invoicing in the aviation industry

Carriers are already using an e-invoicing platform: Over 270 participating airlines Over 5,500 participating suppliers (fuel, ground handling,

etc) Plus various bilateral relationships

But carriers don’t currently use e-invoicing for settlements between themselves – just to pay suppliers But similar relationship (supplier – customer)

Page 6: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 6

E-Invoicing with Integrated Settlement

Page 7: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 7

SIS follows a 2 pillar strategy to address the challenges of e-invoicing implementations Address the content of e-invoicing

(What information is part of the invoices): Development and maintenance of Invoice Standards together

with industry experts E-Invoicing WG modifies the “IATA Aviation Invoice Standard”

Address the communication part of e-invoicing (How are invoices exchanged and processed): A web service to support and promote the exchange of e-invoices

SIS selects supplier with e-invoicing tool

Page 8: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 8

E-Invoicing with IS

BilledAirline

Integrated Settlement

BillingAirline

Enab

ling

Proc

esse

s

Billing & Invoicing ProcessesCentralRepository

“DigitalSignature”Company

Enab

ling

Proc

esse

sSettlement Processes

ICH ACH

Processes at time of SalesNFP

engineARC COMPASS™

ProrateEngine

IS-WEB

IS-XML

IS-IDEC

Other

IS-WEB

IS-XML

IS-IDEC

Billing File / Data(similar to today)

Billing File / Data(similar to today)

Create invoice file (where applicable)

Optionally create and verify digital signature

Optionally store e-invoice in a legal archive

Settle claims via ICH / ACH Make invoice (incl. optional

digital signature and verification) available for download

Page 9: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 9

Legal Aspects ofE-Invoicing

Page 10: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 10

What makes an e-invoice a legal document? Legal document with all required information (based on

jurisdiction), e.g.: Specific fields (e.g. Billing Company Address or VAT

Registration Number) Digital signature (if required) “Stamp” (if required)

Depending on legal requirements, the same submission file could be a legal invoice or just simple billing data

Page 11: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 11

Required Data & IS Some jurisdictions require 14 elements on a legal invoice (e.g. VAT

Registration #, VAT Amount, Billing Carrier’s Address, Billed Carrier’s Address, etc) Some jurisdictions require the proper naming conventions (e.g. “IVA” instead

of “VAT”) Some jurisdictions require digital signature, which is string of text that is

computed and sent with the signed document in order to prove:1. Identification of invoicing party (“Authenticity of origin”)2. File content is unchanged (“Integrity of content”)

With Integrated Settlement, the data can be provided in two ways: Billing carrier leaves blank, IS supplies data from airline profile Billing carrier submits (IS will check against airline profile and, if they don’t

match, will send a notification)

Page 12: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 12

Different Jurisdictional Requirements Requirements discussed are not consistent across

countries Legal requirements depend on the most restrictive

country European Union – Most Restrictive But new Activities United States – Less Restrictive Other Countries - ???

IS will be configured by each airline The transaction depends on

the configuration of the mostrestrictive airline

Billed Carrier

Billing

Carrier

U.S. E.U.

U.S.

E.U.

Digital Signature Required?

Page 13: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 13

Legal Obligations ofE-Invoicing

Page 14: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 14

Legal Obligations for E-Invoicing Billing Party:

Create and attach digital signature where necessary Prove conformity with e-invoicing laws Apply VAT where applicable Archive and prevent modification (e.g. on a CD-ROM)

Billed Party: Verify digital signature before processing the invoice Archive and prevent modification (e.g. on a CD-ROM) Logging of the digital signature and key, receipt of billing, and

the type of archive and any conversion for 10 years

Page 15: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 15

Role of Integrated Settlement IS legally mandated by billing carriers to “create” or

“transport” the invoice Where necessary, submitted billing data is “transformed” to an

invoice by creating the digital signature and/or adding the reference data

IS legally mandated by billed carriers to verify the signature, archive the invoice, and log the receipt

IS also archives keys and signatures IATA will use a “trusted company” to help to comply with

local laws and to create and verify the digital signatures

Page 16: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 16

Carriers’ Obligations with IS Investigate and configure the IS airline profile and

submitted files with your country’s requirements for e-invoices Digital Signature option E-archiving Reference data Etc

Ensure that your carrier complies with your local regulations

Page 17: E-Invoicing & Legal Aspects RA42 Presentation Michael Uebber, LH SIS – Simplified Interline Settlement

September 2008 SIS – Materials – E-Invoicing 17

Thank you.

Email:

[email protected]

SIS Website:

www. t .or .w tw o. n n . l.ia a g ha ed fi a cece

r n .s s. n x. tma i g i i de h