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Tag: e-invoicing

Invoicing in China: how to successfully transform to Fully Digitized eFapiao

Companies that want to do business in China and work with local suppliers through their local office quickly realize that invoicing is much more complex than in Western Europe or North America. It's time-consuming, labor-intensive and has many unique requirements. In the future, this complex process will be completely digitized—and somewhat simplified.Fapiao & Golden Tax: an introduction to Chinese invoicingBut let's start at the beginning: In China, domestic invoices cannot be sent directly from the supplier to the customer. Instead, special tax hardware is required, such as a so-called tax control USB disk. In some cases, paper receipts are also required. Most importantly, companies must use state-certified providers as intermediaries and pre-register their invoices with the central tax authority using the Golden Tax System (GTS) software.An invoice issued and registered with the tax authority is called a Fapiao. In the classic Fapiao process, suppliers first submit invoice data to the Golden Tax System. These invoices are pre-validated by government-certified vendors to ensure, for example, that all tax data has been entered correctly.An invoice issued and registered with the tax authority is called a Fapiao. In the classic Fapiao process, suppliers first submit invoice data to the Golden Tax System. These invoices are pre-validated by government-certified vendors to ensure, for example, that all tax data has been entered correctly.After successful validation, the system assigns a unique number to each invoice. Once this step is successfully completed, suppliers can print the invoice data with the assigned invoice number on a Fapiao paper receipt and send it to their customers. These Fapiao receipts are special formatted papers with a seal and are available in blocks from the State Taxation Administration (STA). To issue an invoice, suppliers must obtain a sufficient number of Fapiao paper blocks in advance.If this procedure is not followed, suppliers will not be allowed to issue VAT invoices.On the customer side, the Fapiao document must be automatically recorded, evaluated, and compared with existing data in the GTS upon receipt. This is a tedious, error-prone, and cumbersome process that often requires a lot of manual verification.The following video explains the old paper-based process in more detail: From paperless to "Fully Digitized eFapiao"Some time ago, the paper-based Fapiao process was transformed into a paperless version, although this is not widely used in China. In the paperless process, the procedure remains the same, but the paper-based Fapiao receipt has been replaced by a proprietary digital data file. However, the cumbersome process with all its drawbacks has not changed.The Chinese government has therefore decided to convert the classic Fapiao process, whether paper-based or paperless, into a fully digitized version, the so-called "Fully Digitized eFapiao". This is based on a new central platform where invoices can be exchanged between suppliers and customers in a fully digital format.To comprehensively test the new Fully Digitized eFapiao process, the Chinese government launched a pilot in 2021 in several major cities and regions, including Guangdong, Shanghai, Foshan and Inner Mongolia. Meanwhile, the pilot operation has been extended to further regions.Here are some details about Fully Digitized eFapiao:Fully digitized: Fully Digitized eFapiao is a new type of electronic invoice. It has the same legal meaning and use as the conventional paper Fapiao, but without the paper.No copies: Unlike the traditional Fapiao, copies are no longer necessary. This greatly simplifies the process. The paper-based process involved multiple copies of the Fapiao receipt.Reduced invoice size: Only 17 data fields are required.No pre-registration: No need to purchase paper blocks in advance. The Fapiao invoice number is assigned directly by the central platform.No special tax equipment: Enterprises do not need to purchase special tax control equipment such as USB disk, tax control USB disk and Tax UKey in advance. Instead, they can issue the Fully Digitized e-Fapiao directly through the national e-invoice platform.Diversified input channels: In the current pilot phase, it is possible to issue invoices directly through the central platform. Soon, this will be extended to digital terminals and mobile applications.Reduced workload: Scanning and OCR processes are no longer necessary on the recipient side, as paper and PDF invoices are no longer required.Always up-to-date with SupplyOn InvoicingSupplyOn Invoicing has supported the classic Fapiao process for several years. This applies to both the paper-based and paperless versions. The new Fully Digitized eFapiao process is also supported by SupplyOn: All suppliers from the pilot regions in China can also use SupplyOn Invoicing to work with their customers in a tax-compliant manner.The advantage: Invoices are checked and validated in advance by SupplyOn against order or other demand data. If there are any errors or discrepancies, corrections can be made before the invoice is submitted to the tax authorities. Time-consuming cancellation or credit processes are a thing of the past. Suppliers can rest assured that invoices meet customer requirements and have been verified against country-specific requirements. In return, purchasing companies only receive invoices that have been validated in advance by SupplyOn Invoicing and match the purchase order or goods receipt. This allows for direct posting without any manual effort.As a first step to support the pilot phase of Fully Digitized eFapiao, SupplyOn has provided the pilot suppliers with the successfully validated invoices in a new download format. This format is accepted by the new central platform and can be directly uploaded.From now on, pilot suppliers can also use SupplyOn Invoicing to transfer the validated invoice data directly to a local, government-certified provider and thus to the central platform. A manual download is no longer necessary. We are also working on further simplifying the invoicing process for purchasing companies.Our customers can rest assured: By using SupplyOn Invoicing, they are always up to date with the latest developments in China, as we promptly implement all relevant Chinese government requirements in our solution.
Ludwig Jahrstorfer · November 14, 2023 - reading time < 6 Min.
Invoicing in China: how to successfully transform to Fully Digitized eFapiao

The first Supplier Community Event for suppliers in the Aerospace industry

In addition to numerous events about various SupplyOn solutions, we also hosted one for our aerospace suppliers.News, tips and tricks on SupplyOn solutions were on the agenda — this time for AirSupply and Invoicing.Christian, our Vice President SCM & Finance Solutions, gave an exciting keynote speech, which was then followed by our product experts providing insights into the solutions.How can I customize my AirSupply dashboard according to my needs?How can I decide which email notifications I receive, how often they are sent to me and when?How can I schedule my downloads in the future?Saskia and Wolfgang answered these questions all about the AirSupply solution.Ludwig then showed the suppliers how the Invoice Clearance process will be supported in Invoicing in the future and how suppliers in France and Spain will be able to send their invoices to the central government agency via SupplyOn.In the second part of the event, we moved from the product demo into practice: representatives from two companies discussed the usage and benefits of AirSupply in their processes - and how the benefits can be further increased. Why was this so exciting? In the panel discussion, we looked at both sides of the coin - the customer's view as well as the supplier's view.One of the invited companies - Airbus Aerostructures GmbH (formerly PAG) - fulfills both roles and uses SupplyOn on both the purchasing and selling sides. That's why two representatives from Airbus Aerostructures - Jan-Hendrik Drees, Supply Management in the role of the "buyside" and Christoph Bertz, HO Ordering Process & DP Account Management, in the role of the "sellside" - met Benjamin Klotzbücher, Sales Manager at Georg Martin GmbH, an innovative supplier to Airbus Aerostructures, in the SupplyOn Studio.All three panelists agreed on the quintessence of the discussion: AirSupply offers the great advantage that any company, regardless of size and IT resources, can use the solution and benefit from it. However, it is also clear that the benefits increase with the depth of the integration of AirSupply into the company's own processes, and that a back-end integration, such as the one implemented at Airbus Aerostructures, is only worthwhile above a certain order volume. Nevertheless, even for smaller companies, a potential for added value can be identified and leveraged with less effort, for example by exploiting the greater transparency or by making intelligent use of the structured digital data with as many customers as possible on the same platform.Airbus Aerostructures has written a remarkable success story in this regard by approaching its customers with the clear intent to collaborate via AirSupply in the future or to expand the scope of its usage. As a result, Airbus Aerostructures is now using SupplyOn AirSupply very successfully with 20 customers.We would like to thank all contributors for a highly rewarding event with interesting outlooks, helpful information on usage and an exciting panel discussion with a wide variety of viewpoints and insights into the everyday life of a customer and supplier! Stay tuned and find out everything about the next events with new guests and topics here.
Lena Zuber · March 29, 2023 - reading time < 3 Min.
The first Supplier Community Event for suppliers in the Aerospace industry

Are you ready for Invoice Clearance in France?

In recent years, an increasing number of countries have introduced so-called invoice clearance procedures. Before electronic invoices can be sent to the recipient, they must be checked and approved by a central government agency. The primary concern is the correct reporting of tax data. These clearance models are usually referred to as Continuous Transaction Controls (CTCs) because the verification takes place in near real-time.  CTCs aim to reduce the VAT gap. Governments use this term to describe the loss of tax revenue due to missing or incorrectly reported tax data.The first countries to implement such models are in Latin America. They are already discussing extensions such as the reporting of incoming payments or certain tax benefits. The EU is also considering CTC. Just at the end of last year, an important package of measures entitled "VAT in the Digital Age", or VIDA for short, was adopted. This creates a framework for how tax reporting for companies in the EU should look in the future.Companies in France will have to be "clearance-ready" by 2026In France, a CTC model for B2G (business to government) transactions has been in place for several years. Invoices to public institutions must be sent to a central government portal called "Chorus Pro". In future, this procedure will be gradually extended to B2B (business to business) transactions.In addition to the e-invoicing obligation, there is also an e-reporting obligation. This applies primarily to cross-border invoicing and relates to invoices that are not already covered by the national clearance procedure, for example, invoices from other European countries. Their tax data must also be reported to the French tax authorities.Regarding the planned timeline and introduction of the French Invoice Clearance procedure, a delay was communicated in summer 2023. A mandatory introduction was planned originally in stages starting in July 2024. French companies mentioned in several consultations with the authorities that more time is needed to prepare their processes and systems. This, however, is not the only reason. From the tax authority's side, the completion of the central government portal PPF (Portail Public de Facturation) also requires more time. The launch date of July 2024 faced pressure in summer as a result.Due to these reasons, the French Ministry of Finance has decided to postpone the introduction of the B2B Invoice Clearance procedure. In a recent meeting, the national tax authority provided some details on the postponement. As the formal dates have yet to be determined, the rough timeline was presented as part of a three-phase rollout:2024: In spring 2024, the French authorities will publish a list of officially registered PDP (Plateforme de Dématérialisation Partenaire) providers. In the second half of the year, the central government portal PPF (Portail Public de Facturation) will be completed.2025: During this year, France will implement a large-scale pilot program that will run for the entire year 2025. Companies of all sizes as well as provider companies can participate in this project. The pilot phase is intended to enable companies and software providers to test their systems and processes in order to prepare as well as possible for the launch of the clearance model.2026: In 2026, the Invoice Clearance procedure will be introduced and become mandatory for companies. The exact phased introduction will become clear at the end of 2023, when the planned finance law is passed by the French parliament.What does the French clearance model look like?Before the introduction, France evaluated and compared different CTC models from other countries. It chose a decentralized approach that gives maximum flexibility to market players. The invoice sender or recipient has two options here: Either they send the invoices directly to the central government portal PPF (Portail Public de Facturation, an evolution of the "Chorus Pro" portal already used for B2G). Or they work with certified providers called PDP (Plateforme de Dématérialisation Partenaire). The PDP receive the invoices, report the tax data to the central PPF platform and forward the invoice to the recipient.Each French company is free to choose whether to work with a PDP or to connect directly to the central PPF platform. In addition to the PDP, there will be another type of provider, the so-called OD (Opérateur de Dématérialisation). Only PDP are allowed to send invoices directly from a supplier to a customer and report tax data to the central PPF platform.Furthermore, providers specializing in purchase-to-pay processes offer additional advantages, such as matching an invoice against specific "requirement data" such as the purchase order or advance shipping notice. This can ensure that only invoices that have undergone successful upstream validation enter the clearance process. Lengthy and cumbersome cancellation processes can thus be avoided.In addition to transmitting invoice data and tax messages, suppliers in France must support a standardized status model. The so-called "lifecycle status" of an invoice can go through several phases. The following statuses are mandatory and must be supported by all parties: "Submitted", "Refused ", "Rejected" and "Payment Received".Decentralized clearance model in France:How does SupplyOn support the new French clearance model?SupplyOn Invoicing already covers the French invoicing requirements. SupplyOn also offers a solution for the new French clearing procedure. The development team is already working on an extension for Invoicing to support the new French CTC procedure. This solution extension will be available in time when the pilot phase starts in 2025 for SupplyOn's customers to prepare. During solution design, SupplyOn works closely with government agencies and consulting firms to ensure that all requirements are directly incorporated into the product.SupplyOn Invoicing enables suppliers to check invoices against various quality criteria before sending them. This can be a check against a purchase order (PO) or against customer-specific specifications. In this way, suppliers can be sure that their invoices will be accepted by the customer and paid promptly. Time-consuming correction processes are eliminated. In case of discrepancies, suppliers can work directly with their customers to find a solution.For customers, SupplyOn Invoicing is an upstream quality gate that checks invoices in advance and ensures a consistently high level of quality. This leads to an almost completely automated invoice receipt process. The planned solution expansion for France thus ensures that SupplyOn customers continue to enjoy all the benefits of Invoicing and can use the service as usual.The latest communicated postponement puts all sub-services and providers in a position to be prepared for the rollout, provided they take advantage of the additional time. In particular, the pilot program planned for 2025 gives all stakeholders the opportunity to test their processes and systems and gain confidence with the new system. Large companies, which are first in line to implement the CTC process, should view the postponement only as a six-month delay and consider the start of the pilot program in early 2025 as a de facto launch date.SupplyOn intends to monitor further developments closely. The time gained enables SupplyOn to work together with customers on preparing the systems.
Ludwig Jahrstorfer · March 23, 2023 - reading time < 6 Min.
Are you ready for Invoice Clearance in France?