What is an electronic invoice?
Electronic invoices, or e-invoices, are fully digital invoices that are sent directly between companies' financial systems in a structured, machine-readable format.
Electronic invoicing provides various benefits for companies, such as saving time and resources, improving control, and promoting environmentally friendly and sustainable practices.
Electronic invoice formats and networks in Denmark
The most commonly used format for electronic invoicing in Denmark is the OIOUBL format, a subset of the international standard UBL 2.0 (Universal Business Language) from OASIS (the Organization for the Advancement of Structured Information Standards). OIOUBL 2.02 was released September 2009 and was updated to OIOUBL 2.1 May 2022.
One of the advantages of OIOUBL is the standardization of business documents, and being based on UBL 2.0, OIOUBL supports a number of different business requirements, ensuring cross-border exchange of documents, including electronic invoices.
Nemhandel is the official digital infrastructure for exchanging business documents in Denmark, both in the private and public sectors. Nemhandel has been mandatory for B2G transactions since 2005 and is managed and founded by the Danish government through Erhvervsstyrelsen, whose mandate is to make responsible business conduct easy and attractive throughout all of Denmark.
Nemhandel consists of a series of access points and a digital contact register NHR (Nemhandelsregisteret), which is a Peppol SMP (Service Metadata Publisher). It was originally based on NHR, OIOUBL and OIORASP (the latter has been decommissioned).
In summary, Denmark utilizes two networks:
- Nemhandel for domestic transactions, supporting a wider selection of documents
- The Peppol network for cross-border transactions, to allow smoother integration with foreign business partners
Status of electronic invoices in Denmark
The government in Denmark has been proactive in promoting electronic invoicing for a number of years, making e-invoices mandatory in B2G transactions as early as 2005. Through Nemhandel and the work of Erhvervsstyrelsen the officials give the businesses in the private sector the framework and support needed to digitalize their procurement processes.
Today, 99% of all invoices to the public sector is now an electronic invoice and the Nemhandelsregister has 67.633 registered recipients.
How to get started with electronic invoicing in Denmark?
In Denmark, domestic electronic invoices are mainly sent through the Nemhandel network, consisting of access points and the Nemhandelsregisteret (NHR).
To send and receive electronic invoices in Denmark, a company needs:
- A financial system that can send and receive electronic documents, e.g. in OIOUBL 2.1 format
- Registration in the Nemhandelsregisteret or another SMP (your access point provider makes this registration)
- Connection to an access point in the Nemhandel network
In addition, it is recommended that the access point provider registers you in the Peppol network.
For smaller businesses, there are several cloud-based financial systems available with integrated Nemhandel access points as part of their service. However, most mediums-sized and larger companies will need an EDI service provider that offers an access point. These service providers will usually also offer additional services to simplify the handling of electronic invoices.
International Electronic Invoicing
International electronic invoicing is often more complex than domestic. Most countries have their own preferred formats and use different networks. When invoicing internationally, it is therefore crucial to find the right EDI service provider with the necessary interconnection agreements and access to relevant networks, as well as an overview of the applicable legal requirements.
To be able to receive electronic invoices from abroad, you need to be connected to an EDI service provider that can:
- Exchange documents with the service provider that the sender of the invoice uses - either via interconnection agreements or via interoperability networks.
- Handle different invoice formats and convert these into a format that is compatible with your financial system.
To send electronic invoices abroad, you must be connected to an EDI service provider that can ensure that:
- The invoice can be converted to the recipient's preferred format (or a format agreed upon with the recipient’s service provider)
- The invoice is sent to the correct recipient, often by network collaboration, or via interconnection agreements
Success factors for electronic invoicing
- Choose the right EDI service provider: An experienced EDI service provider with a large network can be essential
- Collaborate with a System Integrator: Ensure seamless integration with your existing systems. (Logiq has a large and expanding network of partners that can help you)
- Build internal competence: Invest in training and understanding of electronic invoicing for your employees
- Prepare to scale: Choose solutions that can grow with your business
Summary
Electronic invoicing has long since established itself as the standard for B2B transactions. With the right partner and system in place, your company can achieve significant savings and efficiency gains. As a leading EDI provider in the Nordic region, Logiq has the expertise and infrastructure required to ensure the successful implementation of electronic invoicing.
Do you want to know more about how your company can get started with electronic invoicing? Contact us for a talk about what can be achieved.