The order cycle is a process that involves all companies, whether as customers and suppliers. As a matter of fact, it is a fundamental process for any operator. Buying or selling goods and services can be part of the core business of our company, or it can be functional for performing activities. In any case, it’s an activity that we cannot do without.
Precisely because of its centrality and its transversal nature for companies in every sector, the complete digitalization of the order cycle offers companies significant advantages, leading to greater efficiency, speed, and economy of all processes and a streamlining of activities in general.
The elements of a digitized procurement cycle
An all-round digitization of the order cycle requires a complete re-engineering of the process itself. This means that, at the preliminary level, it is necessary to analyze a company’s supply processes in order to optimize and automate them where possible. Digitization, as it is now well established, is only beneficial when it is approached in a rational and rigorous manner. The other key step is, of course, to dematerialize the documents involved in the order cycle: Invoices, purchase orders and transport documents.
In Italy, we have seen the full introduction of the electronic invoice, which is mandatory for almost all economic operators, for two years now. More recently, however, we have seen the introduction of the electronic order, which is currently only binding for entities of the National Health System and their suppliers. The management of these two types of document takes place thanks to two platforms, the Interchange System (SDI – Sistema di Interscambio) and the Order Sorting Node (NSO – Nodo Smistamento Ordini). These platforms are part of a much broader and articulated information system.
Here, we are are talking about APiR (Acquisti Pubblici in Rete), the Networked Public Purchasing System. APiR is an integrated network that enables communication between SDI and NSO and a series of other platforms and databases, such as SIOPE, SIOPE+ or the National Database of Public Contracts (BDNCP – Banca Dati Nazionale dei Contratti Pubblici), which contain the information necessary to carry out procurement and supply processes within the Public Administration.
By limiting ourselves here to considering only the categories of documents that come into play in the order cycle, we see that, while for the electronic invoice and electronic order we have technical solutions and structured and standardized IT tracks, as well as a series of regulatory constraints, this does not apply to the electronic transport document. Instead, when it comes to the electronic transport document (ETD), we still have no indications to that effect. However, things could change very soon.
What is the transport document and when is it mandatory?
The transport document provides proof of the transfer of goods from a supplier to a customer and makes it possible to track this transfer. The transport document, therefore, generally follows a purchase order and precedes the invoice from both a logical and temporal point of view. In addition, it must accompany the goods or, when issued in electronic form, must be transmitted to the recipient no later than midnight on the day of shipment. Accordingly, the information within it must include the:
- Progressive number of the document
- Generalities of the assignor and assignee, as well as of the carrier, if any
- Date of shipment and delivery
- Precise description of the goods to be transported and their relative quantities
All of these details must be accurately reflected in the corresponding order and invoice. In addition, the transport document must specifically indicate whether the transport includes hazardous materials and of what type and must specify their weight and quantity.
Therefore, the transport document is a useful connecting document in itself, which allows us to verify that the goods delivered actually conform to what we have ordered and which we will then settle through the invoice sent by our supplier. From a civil point of view, the transport document can constitute an important means of protection in certain situations, both for the assignor and for the supplier.
Moreover, we remind you that the transport document has relevance for fiscal and VAT purposes and, in certain cases, its issue is mandatory. Specifically, the issuing of the delivery note is mandatory in case of deferred invoicing or in case the goods are not destined to the transfer of property (for example, in case of gifts, viewing accounts, sale accounts, returns, etc.).
Since from a technical point of view it is already possible to automatically link the electronic invoice and electronic order (indeed, in the healthcare context it is already mandatory), it is easy to imagine the potential and benefits that the electronic transport document (ETD) and the complete dematerialization of the order cycle can provide in terms of simplifying the process.
What’s New for the electronic transport document (ETD)
As we have mentioned, we currently have precise standards and regulations governing the electronic invoice and electronic order and their related obligations. The most recent electronic order has been developed with an important goal in mind: To achieve the highest levels of interoperability not only at a national level, but also at a European and international level. In fact, the NSO electronic order is entirely based on the UBL format, a highly interoperable standard on which all documents that travel within the PEPPOL infrastructure are based.
Within the PEPPOL scenario, a new track has been developed that has all the credentials to become the next standard in electronic transport document (ETD). We are talking about the Despatch Advice 3.1, which has been recently updated from the previous version 3.0. The collaboration between PEPPOL and AgID, which represents the Italian PEPPOL Authority, has made it possible to develop a specific profile that takes some typical specificities of the Italian eProcurement system into account, while ensuring full interoperability with the international context.
The Despatch Advice 3.1 allows organizations to include all of the mandatory information typical of the traditional paper transport document according to the Italian law in force in the electronic transport document (ETD). It also makes it possible to automatically reconcile the electronic transport document (ETD) with the corresponding electronic order and invoice, thanks to special ad hoc fields. For the characteristics listed and also considering the interest and contribution of AgID in the development of this path, the Despatch Advice 3.1 could have all of the requirements to become the next standard for the electronic transport document (ETD), thus closing the circle of an automated and completely digitized procurement cycle.
Currently, there is no general obligation regarding the use of the electronic transport document (ETD). In fact, the only obligation at the moment concerns the transport of goods by sea or air. In this case, as of May 1, 2018, the Union Customs Code established the obligation to use the electronic transport document (ETD). More recently, as of January 1, 2021, the Ministry of Agricultural, Food and Forestry Policies has established the obligation at the national level, to issue the MVV document (accompanying document for wine products) solely in telematic mode. Signs such as this suggest that a more generalized obligation regarding the use of the electronic transport document (ETD) may not be far off.
The advantages of integrating electronic transport document (ETD) in business processes
Whether mandatory or not, digitizing the transport document and therefore integrating it into an organization’s supply processes, which can thus become completely digitized, has its advantages. First of all, think about the convenience of being able to manage all the documentation linked to the order cycle in the same way, without having to adopt different practices for the electronic invoice and for paper documents.
With the digitization of invoices, purchase orders, and transport documents, we will have three documents that are perfectly integrated and interoperable with each other, all of which can be reconciled automatically, drastically reducing the risk of compilation errors. This makes it much easier to identify them. Creating a standardized and automated workflow can greatly simplify the work of a company’s employees, allowing them to invest more time, energy, and creativity in other activities that require their attention.
Moreover, as we know, invoices, orders, and transport documents aren’t just relevant from an operational point of view. They are subject to precise maintenance and preservation obligations that are dictated by the current fiscal and tax legislation. Specifically, such documents must be retained for 10 years and, in the event of ongoing litigation or assessments, they must be retained for as long as necessary to conclude them.
Choosing a technology solution that can manage all three of these documents electronically and automatically store them digitally, including the receipts of correct transmission and receipt generated by the enabling platforms such as NSO or PEPPOL, is the best way to protect and preserve them in case of need. It also supports organizations in streamlining operational processes while ensuring compliance with tax rules and those for the maintenance and storage of computerized documents.
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