2018 a new milestone en route to French digitisation via Chorus Pro
Since 1 January 2017, Chorus Pro has already received 10 million e-invoices. This figure might seem enormous, but it is actually rather small in comparison with the yearly potential of 100 million invoices to the public sector.
An important milestone will be reached next January when it will become obligatory for medium-sized businesses to send e-invoices to the French public sector. This, in contrast with the 250 large groups affected by the obligation as of 1 January 2017, presents a new challenge to the French administration, because this time around it may represent as many as 30 or 40 million invoices to be handled electronically.
The decree of December 2008 defines a medium-sized company (ETI, Entreprise de Taille Intermédiaire) as an organisation which is not an SME, has a staff of more than 250 but less than 5,000, and a turnover of EUR 1,500 million or less, or EUR 2,000 million as a consolidated balance sheet. 5,100 legal entities meet this definition, including 1,300 foreign companies with subsidiaries in France. It is estimated that 2,500 of the total 5,100 are suppliers to the public sector.
“An important milestone will be reached next January when it will become obligatory for medium-sized businesses to send e-invoices to the French public sector.”
Pagero operates a direct connection to Chorus Pro for its customers
Pagero is committed to deploying e-invoicing capability in every country with an e-invoicing mandate. We have followed this commitment in France as well, and in late 2016, we set up a connection to Chorus Pro to reach the French public sector. There was also a strong expectation of our clients that we would offer this connection to comply with local regulations. How does this connection work and what are the lessons learnt?
Pagero runs an EDI SFTP connection to Chorus Pro, secured by an RGS level 2 (French General Security Scheme) server digital certificate. This connection is in full production and handles a large volume of invoices (mainly in batch process) daily, of any kind or format.
The inbound format to Pagero’s cloud-based platform, Pagero Online, is initially converted to a pivot format used for integration, then converted into the target format supported by Chorus Pro. This format, incidentally, is both a standard (UBL 2.1 or ISO/IEC 19757-2) and a PEPPOL BIS.
Better error handling with Pagero means less invoice rework
The Pagero Online platform performs validation upon entry to ensure that invoice content conforms with Chorus Pro specifications. For example, it is checked that an invoice contains the minimal information for routing, such as a Siret number.
The entire Chorus Pro directory is managed by Pagero in a database so that any invoice that reaches Pagero is automatically identified with the recipient service and checked before integration into Chorus Pro. This verification loop is permanent and systematic for every invoice sent. It adds value for the customer, because it prevents errors that are a major cause of rejection and considerably reduces the number of errors and level of manual handling.
As soon as an invoice has been integrated into Chorus Pro, Pagero returns an application response with different statuses such as “integrated”, “in progress” or “rejected”. These statuses returned in EDI are displayed either in Pagero Online or directly in the customer’s ERP. Pagero also reports lifecycle statuses such as “invoice integrated” or “available for payment”. This considerably improves visibility, enabling accounting departments to better trace invoices and payments.
“The Pagero Online platform performs validation upon entry to ensure that invoice content conforms with Chorus Pro specifications.”
What are the lessons learnt?
One year later, Pagero’s connection is running smoothly without major incident. The service is rendered to any customer, whatever their business size or field of activity and independently of ERP type.
Since Chorus is regularly upgraded (currently to version 1.3.2), the service can face some short interruptions. Those interruptions do not affect the service, however, as e-invoicing is generally considered non-critical, in contrast with orders or delivery.
Increased traceability and better management of accounts receivable
We recognise that Chorus Pro can not only improve traceability within the platform but also dramatically improve accounts receivable management by reducing payment delay. This is mainly due to invoices flowing from the gateway to the recipient system and then to the accountant and the payer without any process disruption.
We are having ongoing discussions with AIFE (the service of the Ministry of Finance which is in charge of Chorus), which is aware of more recent progress. For example, AIFE has assessed that invoice integration has improved and that an invoice is visible and available for download or integration into the buyer’s system in less than 30 minutes on average.
This has led to a major finding. E-invoicing considerably reduces payment delays, by almost six days. We can expect this to have a proportional impact on the financial ratio and working capital and considerably reduce the amount of money locked up in the financial supply chain.
“With Pagero Online, French companies’ e-invoicing to Chorus Pro will definitely take on a new dimension.”
Pagero reduces the time and cost of implementation of Chorus
Bearing this in mind, Chorus Pro remains a major stake for both large and small organisations. By introducing a more standardised way of raising an invoice, Chorus has triggered change within most of the organisations that use it. They are now obliged to rethink and sometimes redesign their processes. It is a veritable business transformation.
Specific business requirements have long been accommodated in the invoice and no one has raised any objection as long as the processs was paper-based. With digitisation, such requirements are simply no longer sustainable. This has been a major cause of project and cost overrun, because nobody has really anticipated the magnitude of change that Chorus Pro would create in business process adaptation.
For example, most ERPs do not support Siret numbers, but Siret numbers are used for party identification and secure invoice routing to the recipient. This is a domain where Pagero can help organisations add that information automatically (so called enrichment) and avoid making expensive changes to their ERP.
Pagero to accompany change in your organisation
One virtue of Chorus is that it initiates a change management process that can spread internally within the company organisation. Take the example of sales administration. Most of the time the invoicing process is handled by the accounting department and sales not play a direct role in the process.
Now, with Pagero being able to immediately return invoice statuses from Chorus to the company’s ERP, a company’s sales administration can keep an eye on e-invoicing. This means it can play a more active role in invoice conflict resolution, contacting the buyer, taking and enacting decisions and raising corrective invoices or credit notes.
Pagero is involved at every stage of the decision process to facilitate data analysis, information enrichment, the display of invoice queuing and different statuses, reporting in dashboards and constantly monitoring the process efficiency.
With Pagero Online, French companies’ e-invoicing to Chorus Pro will definitely take on a new dimension.