Peppol in Japan
Peppol e-Invoicing in Japan is rapidly taking shape thanks to the adoption of the Peppol network at the government level. The transition, which began with the creation of the Digital Agency, will clear the way for digital transformation in Japan, facilitating a new culture of business document interchange and management.
In addition, it’ll precipitate the implementation of Peppol electronic invoicing, a move that’ll enable Japan tax authority to optimize efficiency in the taxation system, majorly done through manual bookkeeping. Further, Japan’s digitization will help intensify trade and accelerate business document exchange between the generally paper-based public sector and its trading partners. This post will take a closer look at Peppol e-invoicing in Japan and how the public sector and private businesses can leverage it to transform B2G and B2B transactions. We’ll also tell you what you need to do to prepare for e-invoicing in Japan, set to roll out in October 2023 and how Unimaze fits into the entire equation.
Peppol in Japan
Japan’s quest to join the Peppol network, and by extension, the eventual adoption of e-invoicing across the board, was primarily inspired by two things; the ravaging Covid 19 pandemic and the shortcomings of in-person transactions. Indeed, Japan’s resolution to implement electronic invoicing is a step in the right direction in a global business ecosystem where 90 percent of all invoices are still paper-based. It also places Japan in the league of countries like the United Kingdom, Australia, New Zealand, and Singapore, where mandatory e-invoicing.
The Status of e-Invoicing in Japan
Japan has used fax machines to send handwritten reports of Covid-19 cases to the health ministry. Even though the reporting moved online later, that incident exemplifies the country’s struggle to move away from requiring Hanko stamps on physical paper for authorization. Despite its high-tech façade, Japan is, to a large extent, a paper-based based analog society, manifested by the extensive use of hard cash and hesitation to adopt digital transformation. While Japan is the world’s 3rd largest economy, it’s ranked only 27th in the IDM’s World Digital Competitiveness Ranking, a survey of how countries implement digital technologies.
Japan’s digital drag is slowing down the country capacity for economic transformation, and the stats below show:
- The inclination toward paper-based transactions costs Japan 323 million working hours annually or an equivalent of $8 billion.
- More than 80 percent of administrative processes in Japan are still paper-based.
- Only 5.4 of Japan’s citizens use digital applications at public offices, a sharp contrast with countries like Estonia and Iceland, which have achieved a competitive edge across several digital sectors.
Japan’s Digital Policy
On September 1, 2021, the Japanese government set up the Digital Agency guided with the following mission, vision, and values:
1. Improve the user-friendliness of online public services.
2. Develop standards functions like certifications, IDs, and cloud-based services and networks.
3. Build digital capacity through education and training.
4. Spearhead regulatory reform to enable implementation of new technologies
5. Create a comprehensive data strategy.
6. Examine and appraise the digitization program.
7. Ensure the program’s secure accessibility.
The Agency also doubles up as Japan’s official Peppol authority, managing Access Point accreditation and the execution of regional standards.
What Does the Adoption of Peppol e-Invoicing in Japan Imply?
Implementing Peppol electronic invoicing in Japan means that the government and Japanese businesses can leverage Peppol’s Business Interoperability Specifications (BIS) for continuous transaction controls.
Benefits of e-Invoicing for Suppliers
Here’s how Japanese suppliers stand to gain from electronic invoicing:
- Becoming a Preferred Supplier to the Public Sector
Peppol e-invoicing in Japan means that all government agencies must receive Peppol compliant e-invoices. Put differently, a supplier who can send e-invoices per the Peppol standard stands a better chance of trading with the government than competitors who may not have started using Peppol yet.
The Peppol network takes security seriously. All the business-critical information exchanged on the Peppol invoice is encrypted to ensure safety. Japanese businesses sending invoices through the Peppol standard can abide by the strictest compliance requirements.
Peppol is invoicing drives down invoice processing costs by over 49 percent. According to the Aberdeen Group, companies spend an average of $20.30 (or an equivalent of 2,327.17 Japanese Yen) to process a paper invoice. The cost drops to $10.35 (or an equivalent of 1,186.58 Japanese Yen) with electronic invoicing. Essentially, this means that if you process 5,000 per year, electronic invoicing can save you an average of 5,932,900 Japanese Yen per year!
Benefits of e-Invoicing for Buyers
Here’s how Japanese buyers (government) stand to gain from electronic invoicing:
Stimulating the Economy and Improving Procurement
- Standardized Formats
- Reduced errors due to the elimination of manual data entry.
- Automated invoicing.
- Greater reliability.
- Better trading relationship.
Electronic invoicing enables faster B2G transactions. The ripple effect is the rapid injection of money into circulation, thereby stimulating the economy. E-invoicing in Japan will help break the country’s traditional bureaucracy by eliminating delays and supply chain bottlenecks. Adopting e-invoices will reduce clerical issues often caused by manual procurement processing. With the expected rollout of electronic invoicing in Japan, all government agencies will receive documents in the same format, increasing efficiency and consistency. On top of that, government and private businesses can skip manual bookkeeping, enabled by digital invoicing and electronic document sharing. Other benefits of Peppol e-Invoicing for B2B and B2G transactions in Japan include:
Why Peppol e-invoicing in Japan?
As stated, Peppol’s BIS bundles a single infrastructure to e-document transactions, making Peppol invoicing is powerful. Better yet, you can integrate Peppol invoicing into your current accounting system, meaning that you don’t need to install a new system to send, receive and process e-invoices via the Peppol Network. The E-invoice Promotion Association (EIPA) chose Peppol for electronic invoicing in Japan because of the network’s seamless integration and ability to guarantee interoperability with other countries’ standards while incorporating Japan’s specific e-invoicing requirements.
Unimaze Welcomes Peppol e-invoicing in Japan
Unimaze is exuberant to usher Japan into the growing number of countries adopting Peppol e-invoicing.
- As a Peppol-certified Access Point provider, we offer a suite of customized solutions to:
- Enable government agencies and Japanese businesses to connect to the Peppol network by setting up the necessary infrastructure.
- Integrate Peppol e-invoicing into your ERP systems
- Offer support and maintenance of your e-invoicing infrastructure by implementing security updates and software patches.
- Ensure that your electronic invoicing infrastructure remains operational round the clock according to Peppol’s service level agreements (SLAs).
- Enable scalability if you want to support other concepts like As4
Start Sending e-invoices!
Getting Ready for Electronic Invoicing in Japan
While Japan plans to launch its e-invoicing system in October 2023, the time to prepare for the new revolution is now. In fact, EIPA encourages organizations to start using electronic invoicing software that supports Peppol by October 2022. Whether you’re a business owner in a multinational with a branch in Japan, your capacity to navigate the imminent digital transformation starts by teaming up with the right Access Point Provider. With over 13 years of experience, Unimaze knows exactly what you need to do to ensure electronic invoicing works for your business. We’ve helped multiple businesses connect to the Peppol network in countries like Serbia, Iceland, Singapore, Canada, New Zealand, Australia, and the United Kingdom. And now, we’re ready to help businesses in Japan transition from paper based invoice to Peppol e-Invoicing seamlessly.
Book a consultation session today to get started.