The Schaeffler Group is one of the world’s leading manufacturers of high-precision components and systems for automotive, aerospace, and industrial uses. As a global company, Schaeffler maintains a significant presence in China, where it is an important supplier and business partner to the automotive and industrial sectors in the region.
Schaeffler has deployed Tradeshift as its global e-invoicing partner in 13 countries, including in China, where it leverages first-of-its-kind capabilities from Tradeshift to deliver a seamless digital e-invoicing solution that is fully integrated with Schaeffler’s global invoicing system.
See how the Schaeffler Group was able to solve complexity in China to create a seamless, global e-invoicing experience in the full case study here.
Tradeshift claimed an industry first when it successfully bridged its China-hosted platform with the Tradeshift Network. The major milestone creates a seamless e-invoicing experience for companies conducting trade in and out of China.
Companies doing business in China can now use the e-invoicing and accounts payable solution Tradeshift Pay to send and receive digital purchase orders and invoices with cross-border trade partners. The e-invoicing solution helps overcome the regulatory hurdles that have been a barrier to digitalizing the $530+ billion in global trade activity that passes through the country each month. Hurdles that make it difficult for Chinese companies to access existing foreign e-invoicing solutions, forcing their global partners to operate a separate China-only system or rely on paper.
In this article, we explain how Tradeshift helped Schaeffler Group become a first-mover in leveraging e-invoicing in China across its business.
For those not familiar with Chinese tax law, it is putting it mildly to call it complex. In China, businesses are required to file official ‘fapiao’ issued by the Chinese Tax Bureau (but provided by the seller) for any goods or services purchased within the country.
In the strictest sense of the word, fapiao is both a receipt and a tax invoice. In Chinese government terms, the fapiao system is an integral part of China’s tax law and compliance for business.
For some time now, the Chinese government has been pushing to move away from paper and towards e-invoicing. As more and more industries in China implement e-invoicing either optionally or by mandate, the journey towards digitalization is gathering momentum. But there is still some way to go, and a significant proportion of documents are still paper-based.
For several years now, Schaeffler has been working with Tradeshift to digitize invoice entries globally. In China, it has used an OCR (optical character recognition) scanning solution, which leverages a QR code to capture relevant information from primarily paper-based documents.
The Schaeffler team, however, recognized that to get the full benefits from automation, they would need to go a step further. That meant eliminating paper from the process entirely and creating a fully digital, end-to-end e-invoicing solution that could also accommodate cross-border transactions between suppliers in China and Schaeffler’s entities outside of the region.
In early 2022, Schaeffler received its first tax-validated SVAT e-invoice sent from a Chinese seller across the Tradeshift platform. This event marked the first fully digital transaction of a fapaio from a Chinese seller to a Chinese buyer - completely removing the effort from the buyer, the digital fapiao arrives directly in their workflow system for further processing.
By linking China to its global invoicing system, Schaeffler was able to future-proof its supply chain and ready operation for when the country embraces e-invoicing for both domestic and cross-border transactions.
Tradeshift can replicate this solution with any global customer looking to eliminate friction in its AP/tax-validation process domestically in China, and cross-border transaction flows between China and the rest of the world. Onboarding sellers onto a truly digital trade platform offers unmatched transparency and efficiency.
Read the full story on how the Schaeffler Group was able to solve complexity in China to create a seamless, global e-invoicing experience in the full case study here.