In this post, we will focus on the topic of electronic invoice management in the Pharma industry. We will look at the legal obligations, as well as the advantages and opportunities to be exploited.
Electronic invoicing has now become something familiar for professionals and companies in all sectors in Europe. In Italy, companies and individuals are accustomed to this legislative obligation, and we have begun to understand how it works and the various advantages, both for individuals and for the community. In addition, electronic invoicing offers enormous opportunities, both direct and indirect, that not everyone has grasped; yet they are there, ready to be exploited.
These opportunities are linked to the broader theme of digitalization, i.e., the availability of increasingly detailed and “deep” data, which, in turn, can positively transform business processes and relationships with customers or intermediaries. Also, effective electronic invoice management give some advantages.
All of this even more true for a sector as important and delicate as the pharmaceutical industry.
The Pharma Industry, in fact, is tasked with a great responsibility in this period: its role has become even more central with the global explosion of the Covid-19 pandemic. In this absolutely extraordinary time, companies understand that there is just one path to follow: that of Digital Transformation.
The difference lies in the fact that today we are called upon to do so with greater incisiveness, and in a very short time. What is the final objective? The goal is to put patients at the center of the business, to create a new relationship with them that is more intimate, more dynamic, more personal, and more based on mutual trust.
We repeat: this epochal change, today, can only come through digital. And e-invoicing in the pharmaceutical industry fits right into this thread. In the continuation of this post, we will start by focusing first on the regulations and obligations related to this issue (with a specific eye on the Pharma sector). But we will then move on to the advantages and opportunities: precisely on that aspect that, as we have mentioned, today remains little explored, but on which it is crucial to learn to focus.
Electronic invoicing – the obligations and latest legislative updates
Let’s start with the basics: the electronic invoice is an invoice in digital format, which fully replaces the old paper invoice. It must be completed according to legal standards and must be transmitted exclusively through the Interchange System (SDI).
The possibility to issue invoices only in digital format was introduced in Italy with Legislative Decree n.52 of February 20, 2004. The Finance Act enacted in 2008 introduced the obligation to issue electronic invoices only to the Public Administration, with the related obligation to store digital documentation for 10 years.
The other turning point was 2019, when the obligation for electronic invoicing was extended to private individuals; only certain categories remain excluded. Finally, as of January 1, 2021, new technical specifications will come into force (for the latest updates, see provision no. 166579/2020, dated April 20, 2020).
An important specification for invoice management in the Pharma Industry
As far as pharmaceutical companies are concerned, there is no exception, and everything falls within the regulatory framework that is valid for all other types of business.
However, there is an important specification regarding pharmacies and healthcare operators required to send data to the TS (Sistema Tessera Sanitaria) system. The prohibition for issuing electronic invoices through the SdI for healthcare services provided to individuals has been confirmed for all of 202. This exemption is concerned with privacy issues, which is naturally a very delicate topic for the sector.
Everything is normal (as for other sectors), except for the electronic invoicing of pharmacies towards suppliers, distributors, and eventual external collaborators.
Finally, as Federfarma reminds us, as of January 1, 2020, the obligation for electronic storage and telematic transmission of receipts has come into force for all retail businesses, including those with a turnover of less than €400,000.
Invoice management in the Pharma Industry: from obligation to advantage
So far we have analyzed the obligations related to electronic invoicing, with an important focus on the pharmaceutical sector (pharmacies, in particular). But what are the advantages?
First of all, for the community, there is a reduced rate of tax evasion, which, as is well known, is one of the most serious and long-standing Italian problems. According to the European Union, Italy has the largest “tax gap”: €35.4 billion, according to the most up-to-date estimates (fiscooggi.it). These are lost revenues which, in the final analysis, have highly negative effects on our economic system, and on all taxpayers, large and small. With electronic invoicing, we have more weapons to combat this problem: we can, in fact, put on track controls in real time, and the authorities can therefore quickly block suspicious transactions.
Then there are the advantages in terms of savings, which apply both to individuals and to the community. Printing and shipping costs are reduced to zero. Storage costs are greatly reduced (no more need for physical storage space, manual data entry is reduced to a minimum, if not completely eliminated).
The possibility of errors, loss, forgery, and duplication are also drastically reduced (the reduction in errors also translates into a reduction in average payment times). With that comes increased security.
An estimate by the Observatory on Electronic Invoicing of the Milan Polytechnic has calculated that the dematerialization of document management processes leads to savings that can exceed 80% of the costs related to paper media. But that’s not all…
The real breakthrough lies in digitization
We’ve seen above how e-invoicing works and what the obligations are. Subsequently, we’ve looked at the advantages in terms of savings and optimization. But it is important to go further: the real opportunities to be seized, in fact, reside above all in digitalization, or, to put it better, in the dematerialization of Pharma company processes (large and small). We focused on the differences between the concept of dematerialization and that of simple digitalization in this post.
Federfarma sums it up this way: with the implementation of an efficient electronic invoicing system there is “the opportunity to achieve a significant improvement in administrative processes as well as data knowledge and analysis and transparency” (federfarma.it).
Here, then, is a keyword: data.
With digital, invoices are no longer just simple service documents related to payments. Here, they become a valuable trove of precise data about your customers and suppliers. This data must be collected securely. It must be analyzed and interpreted in a way that is smart and functional for your business. In this way, data becomes the basis for setting up a tailor-made dialog that is much more effective, dynamic, and transparent and that naturally leads to loyalty.
Finally, the invoice can be transformed from a cold “service” document into a channel of one-to-one communication, and even a vehicle for marketing.
Of course, upstream of all this, there is a need to design a specific software platform, tailored to each individual company, based on its characteristics, its modes of operations, and its needs.
Such a platform, in practice, must be able to:
- Not only send and receive, but also classify and organize the electronic invoices issued and those received from customers, collaborators and external suppliers.
- Automatically and intelligently archive documents for immediate retrieval.
- Enable digital preservation with the highest possible level of security, and in accordance with legal requirements (paying close attention to regulatory updates).
- Automatically extract data from documents. And this is a particularly important point, as we have seen above.
- Report errors and inconsistencies.
- Able to integrate with platforms and systems already in use within the company.
- Allow for a wide range of personalization and as flexible and scalable as possible.
It’s clear that this type of architecture requires the use of a specialized company like Doxee. With Doxee’s paperless experience solutions, electronic invoicing for the public and private sectors is complemented by digital storage and electronic ordering services.
But that’s not all.
Starting with these initial operations (and the relative collection of data), it is possible to improve the procedures of Customer Communication Management (with the Doxee document experience offering for document management in the cloud), up to and including the true personalization of digital communication with customers and suppliers; one-to-one, omnichannel, interactive communication that transforms the sending of invoices into a powerful tool for dialog, marketing, and loyalty (on this subject, see the Doxee interactive experience solutions).
In 2017, Doxee managed about 10% of all electronic invoices to the Public Administration exchanged in Italy. This is a truly significant figure that can be explained by the breadth of its offer. It’s not only about the fulfillment of legal obligations, but also the ability to exploit the enormous advantages made possible by digitization.
The turning point of electronic invoicing for the pharmaceutical industry lies here.
Download the free ebook and find out all the opportunity given by Digital Trasformation in the Pharma sector!