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This is ISO20022 invoice message standard

 Some confusion and negativism has been seen around the splendid progress in e-invoicing standardization. This text by Stig Korsgaard is very useful:

“The following sets out the background and also the reasons why the ISO20022 Financial Invoice message standard under the ISO20022 standard was developed; what characteristic the final message standard has; and the current state of play concerning support and adoption.

Background

In 2006 the business need to develop an ISO20022 Financial Invoice was identified. Initially this came as a consequence of the interoperability proof of concept led by financial experts to place ISO20022 Payment Initiation into the ISO15000 Core Component Library. In reverse the same process was proposed for Cross Industry Invoice only this involved exporting invoice trade data from the Core Component Library and submitting it into the ISO20022 repository.

Additionally according to the ISO20022 standard a number of financial messages already existed that specifically in the trade service business area directly built upon e-invoicing services and e-invoice data. This data was not as robust or aligned as it might have been because it represented only the limited financial services view of the necessary invoice data from the business context of trade services. It was not based on a coherent model, like the Cross Industry Invoice (CII), and therefore led to deviations in implementation in various ISO20022 messages.

Last, but by no means least, payment service providers wanted to leverage the leading market position of ISO20022 as a globally adopted solution, and thereby taking advantage of having a Financial Invoice standard within ISO20022 for use by the global financial services industry and to match advancing regulation building upon financial messaging according to the ISO20022 standard.

Preparation

In order to initiate the work an ISO20022 Business Justification was submitted and approved by ISO. This work was never in itself a UN/CEFACT project; rather it was closely coordinated with the Finance group within UN/CEFACT, called TBG5. Detailed work was conducted by a group of experts that also happened to be TBG5 members and given the nature of interest by both sides of the environment including the role of TBG5 as a bridge between standards in finance and the wider trade domains, TBG5 ended up as the name of the responsible group.

While the ISO20022 Financial Invoice work had no intention whatsoever to build in isolation an invoice data model, it was very clear early on - also in the original Business Justification - that the work would build on the combined knowledge of the invoice model built under UN/CEFACT. The decision to maintain alignment with UN/CEFACT delayed the ISO20022 Financial Invoice work several times, as the work to build the CII data model in UN/CEFACT became increasingly complicated. Despite these delays, and the uncertainty they introduced, the responsible parties developing the ISO20022 solution remained committed to re-using the UN/CEFACT CII data model.

Not until a stable version of CII v2 became available in the middle of 2009 was it possible for the Financial Invoice work under ISO20022 to begin in earnest. Fortunately at the same time the requirements of the European Expert Group on e-Invoicing were also defined and they were naturally included. In the autumn of 2010 the ISO20022 Financial Invoice was approved and published (see www.ISO20022.org).

Summary facts about ISO20022 Financial Invoice:

- a global message, standardized under ISO20022 that was released December 1st 2010. Comprehensive documentation can be found at http://www.iso20022.org/UNIFI_trade_services_messages.page

- supported by a transparent ISO governance model which is open to a.o. payment service providers and end users.

- supported by a sustainable and stable maintenance environment embedded in the global structure under a global approved ISO20022 standard

- entirely based upon the CII v2 data model as the overall reference data model for invoicing and it maps back to that model

- based on a different methodology and syntax than ISO15000 and is therefore not identical to CII in every respect.

- not covering the entire CII model that in itself due to inclusion of all requirements from supply chain, customs, transport, finance etc. is too large for the purpose of the ISO20022 solution as well as identified requirements

- covering all current financial identified requirements both in terms of the invoice message itself as well as the integration to other financial messaging such as payment initiation, direct debits, card payments, invoice financing and trade service utility.

- supporting business scenarios such as Request for Payment, Invoice Factoring, Electronic Bill Payment and Presentment, e-Invoicing via Service Provider and Supply Chain Financing

- compliant with the requirements from the European Expert Group on e-Invoicing such as fulfilling the core requirements, integration to public procurement requirements, full integration to SEPA and the mandatory ISO20022 standard for that and to our knowledge best market practices to fulfill the SME and Cross Industry scope

- supported by the European Commission, SWIFT, Service Providers such as Tieto, multiple national banking communities, global banks and corporates, ISO TC68 and other vendors.

- implemented by Service Providers and market infrastructures and has among other things support in the form of public accessible validation tools – see https://portal.gefeg.com/ISO20022.htm

Now full steam forward – the network should adopt the standard as soon as possible.

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Bo Harald

Bo Harald

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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