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Single Business Number

In our home market of New Zealand we’ve been dialing up the awareness of a Single Business Number (SBN). An SBN is a public unique identifier for each small business.

Single ID number for firms

Australia already has a Single Business Number (called the Australian Business Number – ABN) as does Canada, the US (Employer Identification Number – EIN) and a number of other countries. Where a Single Business Number exists, these have normally been created by Government departments for the purpose of making it easier to collect information from small business.

In a cloud computing environment, a Single Business Number comes alive for the small business owner and is a key building block for a number of new services.

Possibilities

One of the key differences between cloud computing compared to desktop software is your data can be linked to other information. Take for example entering a new customer. You have to know their name and address and if they move you may not know for several months. In the cloud it would be great to be able to connect to that customer and have their latest address details load automatically into your system, and if these ever change, have them automatically updated.

If a new customer approaches you with a large order, wouldn’t it be great to do an immediate credit check. If they come back with a less than clear bill of health then you still might do the business but insist on a cash payment up front. Both parties win.

Another example is sending electronic invoices. It seems crazy that a small business creates an invoice in its own accounting system with structured data, then flattens that data into a paper invoice, which is essentially a picture, and then the customer has to retype that invoice back into structured data in their accounting system. (We’ve started on this at simpleubl.org)

Wouldn’t it be useful to have as the last page of your monthly management accounts an anonymous benchmark of similar companies in your space. You can see how well you are doing against your competitors and peers. That 1% growth you’re achieving might compare with an industry average of -2%, showing that your strategies are working and you are gaining market share in a tough market.

The Single Business Number is a key building block for all these scenarios.

What number?

So what could the Single Business Number be? In New Zealand it’s likely to be the GST (Goods and Services Tax) number as it’s already a number that each business uses to interact with our Inland Revenue Department. There may be a suffix or prefix to make it match other international numbers like the ABN. There is some Government policy work required to enable the GST Number to be used for this purpose.

But that may be a too literal interpretation of a Single Business Number. Another candidate identifier might be the physical address of head office. Essentially this is a physical key that already exists for many businesses and can be easily populated using a geo interface like Google Maps.

Another alternative is the Companies Office record. In New Zealand the Companies Office has recently implemented a new Companies Register which could generate a unique url for each business. (e.g. business.govt.nz/company/xero2006). The problem is the Companies Office does not have a register of sole traders and partnerships and is therefore missing the majority of small businesses. A policy option might be to allow sole traders to (initially at least) voluntarily register themselves to obtain a validated listing in the Companies Register. We believe that providing certainty over who you are trading with is an accelerator for most businesses.

Start the ball rolling

As anything involving Government can take a while, the industry can potentially just get started with some of these candidate keys and match them up later, but that is not as powerful as having certainty. We believe the traction cloud computing vendors are achieving creates the business case for businesses themselves to get interested in SBN. That leads to a massive opportunity for productivity gains and increased commerce for small businesses. We think that’s important.

Let us know what you think.  We’re keen to understand if there is any resistance to SBN so we can talk through those issues.

 

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5 comments

ECOMRC
26 October 2010 #

There is already a Single Business Number, and it is a national and
international standard – it is called the NCAGE number (Nato Commercial and
Government Entity) from the NATO Codification System or “NATO Master Catalogue
of References for Logistics” (NMCRL). Check out NZDF’s webste here:
http://www.nzdf.mil.nz/corporate/jlso/nato-codification/nmcrl.htm#ncage or
Google “NCAGE” for more information.

All suppliers to defence forces worldwide must have an NCAGE number. All of
the goods and services supplied to defence forces also have unique logistics
identifiers as well. It is logical that goernments wants to track what goods
and service are being sold to what countries, so they need a international
standard unique identifier for all suppliers.

If your company supplies to NZ Defence Force, then you have an NCAGE number.
NZ Defence Force (ergo the NZ government) already has a codification bureau
and the business process for application and issuance of an NCAGE number to
businesses. That means there are already thousands of businesses/suppliers
known to NZDF who already have an NCAGE number; an international standard
unique business identifier issued by a government agency using international
standard issaunce processes. The NCAGE number IS a global unique business
identifier.

MED’s SBN project doesn’t even list the NCAGE number as a possible option for
a New Zealand SBN, and the options they do list just don’t stack up. For
example, people often think the IRD GST number is the panacea for SBN. If it
was you could ask why the Aussies created an ABN instead of using the ATO
(tax) number? When you look into it detail, it is highly unlikely that the GST
number could ever be used in the ways eCommerce/eBusiness (computer
applications) people envisage a single identifier key working.

The IRD GST number might appear logical but has at least three serious flaws
as a Standard Business Number:
  - the Tax legislation prevents the GST number being used for anything other
than the purpose intended – a law change would be required assuming the IRD
policy makers can be convinced that there is NO alternative to the GST number
(when of course there are alternatives).
  - international suppliers do not have a GST number hence all inbound and
outbound trade is one sided, i.e. business systems would still have to know
other business identifiers, so it is not unqiue anymore. International
businesses supplying to NZ would not have a GST number.
  - maintaining the integrity and publishing a database of GST numbers would
logically fall to IRD being the issuer and authorative source and they would
probably be unlikely to want any trade enabling role especially when the
purpose extends beyond the Tax mandate.

— The NCAGE number is worthwhile looking into. Governments all over the
world already have the codification methodology and administrative systems and
processes to issue and operate a global identification system for businesses.

Peter Stevens
27 October 2010 #

I read with interest the previous posting about the NAGE code.

There is another very widely used global standard that would have ideal application. It is called the Global Location Number (GLN), one of the standard set of global identifiers developed by global standards organisation GS1.

GS1 is a global standard body, and our system of standards are the most pervasive globally. GS1 is most well known for the Global Trade Item Number (GTIN, otherwise known as the barcode number) that is on most items in global supply chains (retail, logistic, EDI).

Here in NZ, GS1 is an incorporated society governed by its 4,500 members and GS1 NZ is part of a global federation of 110 countries serving almost 2 million organizational members globally.

Apart from the product-focussed GTIN, GS1′s most widely used unique identifier is the Global Location Number (GLN), used for identifying legal (companies) or physical entities (stores, warehouse dock doors, kill chains).

Global Location Numbers (GLNs) are used widely as party IDs in EDI messages (order-to-cash), traceability (Global GAP requirements specify GLNs) and for whole industries (e.g. every farm in the US is allocated a GLN to provide a global, cf. state or federal ID).

Seems like GLNs should be what should be adopted?

Why go local when businesses like Xero & the government can use a widely used, understood & global standard? Indeed, some governments already use GLNs as an equivalent/option to other national company ids (e.g. in India where many ‘companies’ are not formally registered, but still need to be identified by the government and other entities – see http://www.mca.gov.in/Ministry/notification/pdf/GSR183(E)_23mar2009.pdf)

Find out more at:

http://www.gs1.org/sites/default/files/docs/idkeys/GS1_GLN_Executive_Summary.pdf

Martin
27 October 2010 #

While a SBN is a great goal, an interim solution could be using a variety of identifiers, where available. If the GST number is available, use that, next try the companies number, next their email domain, next their phone number. I think a head office address will change too often to be reliable.

While NCAGE sounds good as an international solution, I can see people getting annoyed at having another number thrust upon them. Especially by a foreign organisation.

I think one hurdle would be fears of identity fraud. While all this information is in the public domain anyway, I know I always think twice before entering any sort of unique identifier anywhere. I don’t really like the idea of the world seeing my GST number, even if it’s on every invoice I send.

Pam Crouch
4 November 2010 #

I agree with Peter’s comments about GS1. Before I came to NZ from UK a couple of years back I was involved with GS1 in the UK (through UDEX) in the development of standards for electronic invoicing. To enable effective electronic communications it is vital to get global standards agreed and GS1 has already spent years developing these. GTINs for products (barcodes) and GLNs for locations seem to be the right way to go for me. I also suggest considering GS1 for the electronic invoice standards being mentioned in another thread. The only thing I am not sure about is the cost implications for businesses to obtain these numbers.

Peter Livevsley
6 January 2011 #

A global SBN for over 170m businesses large and small already exists and has been adopted by several governments. D&B’s DUNS Number is a unique business identifier for all trading entities in over 220 countries and is the most comprehensive database of its kind. You have to adopt one standard or you get inconsistencies which results in lack of confidence and poor outcomes.

Is it absolutely every business out there, no, but we are constantly growing the number of business on the database and will always be striving to get as close to 100% coverage as possible. However it’s not difficult for both the public and private sector to ensure their supply base is covered. The US has used the DUNS for several years for all interactions with businesses, be it supply chain, business intelligence, loan recipients or fraud etc and I believe the ABN in Australian is supported by the DUNS (I am checking with my colleagues down under but it sits on a D&B website).

Here in the UK the NHS adopted the DUNS a few years ago for supplier identification, validation and risk assessment. It’s a core element of the eProcurement Strategy and facilitates electronic trading. They use GTIN’s for product (amongst others) but the GLN did not meet requirement for businesses. Over 750,000 supplier records from NHS bodies across England were reduced to just over 70,000 unique businesses. As you can imagine there was massive duplication and a great opportunity to reduce costs. From the supplier perspective they now only have to register once on a central NHS portal for any tender they respond to. All PQQ data is held with the central database.

As for NCAGE this is not unique and causes problems down the line in areas such as contract novation as the data is not accurate or up to date – I’m working on this one!

Government databases are, as I am sure you are aware, low quality, tend cover certain areas of the business community or they don’t want to share the data. In the UK we hold over 4.3m records, there are only around 2.2m companies registered at Co. House.

Scotland and Wales have also adopted the DUNS and it sits behind their procurement portals. This means that any supplier registering (and they have to in order to trade with them) looks up their own DUNS or contacts D&B if they can’t find it. This ensures that the buyer has the data on the right business to make their assessment. This obviously massively improves MIS, removes duplication, supports collaboration, and facilitates rationalisation etc.

D&B own the DUNS Number but it is free to the business to which it relates so no impact for them financially. Our customers are licensed to receive and use it along with any other value added data they require.

There are other benefits, many mentioned in the lead article, but a few of the key ones in the UK are;

‘Once only’ registration for government tenders on a central portal. Scotland, Wales and the NHS has this and the rest of the UK government are moving towards it.

SME analysis, D&B’s unique capabilities in terms of data coverage, corporate linkage and business analysis means that we are the only company that can truly provide this to any degree of accuracy.

Spend analysis, the DUNS is already being used to pull together the spend data across central departments to understand true spend & duplication and to identify opportunities for rationalisation, leverage of spend and framework agreements.

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