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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
September 2008 SIS – Materials – E-Invoicing 3
Introduction toE-Invoicing
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
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)
September 2008 SIS – Materials – E-Invoicing 6
E-Invoicing with Integrated 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
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
September 2008 SIS – Materials – E-Invoicing 9
Legal Aspects ofE-Invoicing
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
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)
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?
September 2008 SIS – Materials – E-Invoicing 13
Legal Obligations ofE-Invoicing
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
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
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
September 2008 SIS – Materials – E-Invoicing 17
Thank you.
Email:
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