Mr. Shuichi Sakurada
Chief Research Committee Member, Japan CFO Association
Managing Director, Accounting Advisory Co.
Certified Public Accountant

Mr. Shinsuke Fujii
Executive Officer (SaaS), Works Applications Systems, Inc.

Mr. Shogo Ishikawa
Executive Officer, Works Applications Enterprise Corporation (in charge of ERP)

Sakurada: Next, I would like to ask about DX. I personally think of DX from three perspectives: first is the digitization of business, second is the digitization of transactions, and the last is the digitization of processes. From an accounting perspective, I believe that the digitization of transactions and processes is an important theme. In particular, process digitization is the automation of monthly closing except for accounting estimates. And, as recently referred to as data-driven management, we believe that management decision-making based on data is important. How does Works Applications view the promotion of DX in the accounting and finance area?

Ishikawa: Digitization of processes has been a fundamental point since we started offering accounting products. Currently, automated processing is built into each product, but we have not yet reached the point where monthly closing can be completed completely without human intervention. This is because the digitization of transactions cannot be completed by a single company alone, although it may be possible to achieve complete digitization of processes with a certain level of investment if the data flow is limited to the company's own internal data flow. First of all, there is a need to achieve consistency of understanding among companies, and this is where government measures such as digital invoicing come into play.

　Sending a PDF file by e-mail or other means may also be considered as electronic data transmission. However, these are just electronic data that are neither standardized nor structured, so to speak, lacking in information. In contrast, digital invoices are standardized and structured data that can be processed automatically. If the spread of digital invoices leads to the digitization of information transmission between companies, we may be able to see the future of fully automated monthly closing of accounts. That is why we have high expectations for this digital invoice and would like to contribute to its widespread use.

Sakurada: Looking at the Japan CFO Association's Financial Management Survey, I still feel that the revision of the Electronic Bookkeeping Act and the invoice system have accelerated the shift to cloud computing and digitization all at once. Although the change in the legal system has forced us to change long-standing business practices, I hope that the reforms will continue to progress, even if only gradually, as people learn the convenience of actually doing it. I know that Works Applications often targets large companies, but what do you think are the key points for the spread of digital invoicing?

Fujii: We would like to support the spread of the system, regardless of the size of the company. Our SaaS business already provides services to many small and medium-sized companies. With Digital Invoice, we see a trend in which large companies that have many business partners will essentially take the lead in spreading the service to the SMEs that are their business partners. We want to spread digital invoicing to both large and small companies with as little time lag as possible, and we are committed to providing a service that allows all companies, regardless of size, to immediately realize the benefits of increased efficiency through digitization.

Sakurada: According to the Japan CFO Association's 2020 survey, 50-70% of companies with sales of less than 500 billion yen use SaaS-like cloud services in the accounting area. However, for companies with sales between 500 billion yen and 1 trillion yen, the percentage is less than 30%. In that sense, it is encouraging that Works Applications is supporting all companies.

Sakurada: In the invoicing area, many vendors offer a variety of solutions, but what are the characteristics of Works Applications' products?

Mr. Fujii: As Mr. Sakurada said at the beginning, accounting is basically the same regardless of industry, and I don't think there is much difference in accounting system functionality between products. We have a track record of improving the productivity of various companies' accounting operations, and our strength is our customer base of approximately 2,200 companies, mainly major corporations. In addition to delivering products compatible with digital invoicing to our large corporate customers, we expect that more and more of their customers, such as small and medium-sized companies, will also need to transact using digital invoicing in the future. In such cases, even if it is difficult to respond immediately with the accounting system in use, by using our SaaS products in combination, they will be able to smoothly respond to digital invoices and realize the convenience of digitization more quickly. Furthermore, by linking with ERP and SaaS products, we can increase the number of things that can be automated by linking not only invoice-related operations but also workflow linkage and a wide range of operational improvements.

Ishikawa: We are also the executive committee member of the Digital Invoice Promotion Council. The purpose of the council is to promote the digitization of accounting and tax-related operations as a whole through the utilization and dissemination of digital invoices, a standard specification based on the international standard Peppol*1.

Sakurada: I am not familiar with Peppol myself, but what is the situation in Japan?

Ishikawa: Peppol is being deployed mainly in Europe and the U.S., and in Asia, it has entered Singapore. In Japan, the Digital Agency serves as the Peppol management bureau in the country, and is working to promote and establish a standard specification for digital invoicing in the country based on Peppol. The standard is to become a unified standard based on international standards, and we, from a private-sector standpoint, are involved in support activities through participation in the planning and study groups of the Digital Invoice Promotion Council.

Sakurada: I hope that the council and vendor companies will actively promote the standard for the sake of popularization.

Ishikawa: It seems that the rate of Peppol diffusion varies widely from country to country, even in Europe and the United States. The key points will be how far the private sector can promote the benefits of introducing Peppol and how to make it possible to introduce Peppol at low cost, and I would like to make sure that we are responding to these issues.

1: Peppol (Pan European Public Procurement Online) is a global standard specification for "document specifications," "networks," and "operation rules" for exchanging electronic documents over networks.

Sakurada: Returning to the topic of digitization of transactions touched on in the DX perspective, I believe that as automation progresses, input-less will be realized. What exactly do you envision when you say "input-less"?

Ishikawa: Input-less does not mean that there will be no human intervention at all. A series of processes occur in conjunction with approval requests, budgets, strategies, and business plans, from quotations to orders, delivery, invoicing, and settlement with suppliers. If all of this information transfer between companies is digitized and connected over a network, the burden of having to input data each time is virtually eliminated, as the information received from suppliers is simply combined with the company's own information. The process of checking and approving human modifications will never disappear, but the key point is how to reduce this part of the process.

　With digital invoicing, an overwhelming amount of information can be incorporated into invoices. When this happens, payment slips can be automatically drafted. In addition, Japanese business practice involves reconciling invoices with the company's own payment slips, which will also be automated once the data standards are standardized. There is the Zengin EDI system (ZEDI)*2 promoted by the Financial Services Agency, and a new mechanism called "New ZEDI" has been created that allows digital invoice invoice information to be attached to bank deposit information. If the new ZEDI system can automate the entire payment cancellation process, it will allow us to concentrate on important tasks such as confirming the difference between the two invoices. I believe that the future of semi-automation without information fragmentation can be called an input-less world.

Although we understand that some companies have their payment systems read APIs so that their applications can support them, until now they have basically been based on the JBA format, known as FB data, and have provided a minimum of information using fixed length as the medium for information transmission. Although the volume of information has increased with the introduction of ZEDI, it is not yet widespread. I think one of the reasons is that even if the volume of information has increased, its use had not been clarified. Once digital invoicing starts and the new ZEDI can be utilized, I believe that the way of looking at the data will change significantly. I believe that the combination of solutions will enable the recipient to feel the convenience of the business.

2: The Zengin EDI system (ZEDI) is a system that enables the attachment of various data, such as payment notice numbers and invoice numbers, when making a general transfer from a paying company to a receiving company.

Sakurada: In the concept of a digital workplace, the work environment itself will be digitized, and of course transactions will also be completed digitally.

Fujii: The concept behind the development of our SaaS system, "HUE Works Suite," is "easy DX starting from the workplace. We have services such as an online system that allows multiple people to manage project progress and a cloud-based workflow system that makes it easy to circulate requests for approvals and applications, and we are planning to link these services together with Digital Invoice services. We would like to support a digital workplace suited to each company.

Sakurada: We believe that the digitalization of transactions will increase the amount of data, and if we can eventually utilize those data to make decisions, we will have a better system. I was impressed by the fact that Works Applications is not only supporting companies' response to the invoice system, regardless of the size of the company, but is also aiming to eventually support a digital workplace. What are your prospects for penetration?

Fujii: What we are focusing on with the Digital Invoice support service is ease of use. We hope to leverage our strength in our customer base to make our services available to both large corporate clients and small and medium-sized enterprises. We are confident in our technical capabilities and development speed, and we hope to improve our product features as we start our pilot program and bring better products to the market. In addition, we would like to contribute not only to delivering easy-to-use products with stable quality, but also to making a contribution in terms of cost.

Sakurada: UI/UX is a deciding factor, isn't it? Accounting is an area where there is not much difference between industries, and I think that systems that are easier to use will be chosen. The UI and UX should be detailed, such as how much information can be input with few movements, how intuitive it is to operate, and how the work flow is uninterrupted.

Ishikawa: It is also important that the system can be used quickly by people in the field. We cannot reflect the detailed usability of a system unless we know the business in detail, so we are working to improve the system from the customer's point of view.

Sakurada: In order to really spread DX, it is essential to consider how the people on the front line can learn to use IT.

Ishikawa: In ERP, digital invoice is one of the means of information communication, but it is beneficial in that it has an overwhelming amount of information. I expect that this information will lead to input-less and other DX, which will lead to fundamental business reform in companies. As the executive committee of the Digital Invoice Promotion Council, we would like to make a company-wide effort to promote the spread of DX.