How would a shared global ledger for e-invoice addresses work?
Together with the other Nordic countries, Finland is among the world leaders in the digitalisation of the invoice traffic between companies. Worldwide, the market penetration of B2B e-invoices is assumed to be around 10%, whereas in the Nordic countries the corresponding figure is already approaching 50%. The e-invoice market is growing rapidly.
The European E-Invoicing Service Providers Association (EESPA) reported growth of as much as 27% in the market in September this year. The digitalization and automation of financial management processes and the software robotics associated with these are key drivers in the process. On the other hand, regulation and the actions of public administration, which are strongly directing companies towards the use of e-invoices, are also behind the development.
The sender of an e-invoice has to have a reliable digital delivery address for the recipient of the invoice. The further the processes from procurement to payment are digitalised and automated, the more important it becomes that the information about the recipient of the invoice behind the digital delivery addresses, as well as about its sender, is reliable and up to date. This requires that the processes associated with the updating and upkeep of the address details of companies are absolutely reliable, and authorizations and identity management around this information have to work. Globalization and the fragmentation of value chains are imposing their own challenges to the management of addresses. In Europe, there are attempts to solve these challenges with the aid of EU-level standards, such as PEPPOL.
In Finland, the address needs of e-invoicing have already been served for a long time by a centralised e-invoice address book of the Information Society Development Center, TIEKE – a non-profit organization which has carried out important pioneering work in the field of e-invoicing. However, the aforementioned and rapidly accelerating development requires that the technology used in national central e-invoicing address books or single-operator CRMs will change.
An attempt to build a new kind of organizationally distributed but logically centralised shared ledger of e- invoicing addresses has now been initiated in Finland. The objective is to deliver a first preliminary version of a distributed e-invoice address book in December 2016.
A significant group of operators in e-invoicing is involved in the project: Leading European B2B business integrators – such as Tieto, Enfo, Basware and OpusCapita; banks such as OP, Nordea, Danske and the s.k. Samlink – a group of Finnish Savings banks as well as the LähiTapiola insurance company are in. In addition, the consortium includes such government agencies as The Finnish Tax Authority, the Finnish Business Registry, The Government Services for Finance and HR in Finland Palkeet. The SMEs' involvement is covered by the Association of Finnish Accounting Firms. Furthermore, the payment processor Nets is also involved. The Federation of Finnish Financial Services is acting as the facilitator of the project. Nordledger Blockchain Design Studio is responsible for the design and coding in the project.
Please join us on November 29th in Helsinki at the ReCon hackathon to hear more and contribute to this project: Hackathon: Let's Create a Trust Machine!