U.S. Treasury Joins Ranks of European Governments in Embracing e-Invoicing
December 05, 2011 - SCMR Editorial
Editor’s Note: This guest feature was written by Bob Cohen, Vice President, North America, Basware
The federal government has made a firm commitment to e-invoicing, joining a growing number of countries promoting the use of this technology in the public sector. This past summer, the U.S. Treasury Department mandated that by 2012 all of its bureaus must implement the Internet Payment Platform (IPP), an electronic invoicing processing solution. Further, it’s requiring that by the end of 2013 all commercial suppliers must submit invoices electronically using IPP.
It’s clear why e-invoicing has become so attractive to the public and private sector alike. For one, the cost savings are significant. If electronic invoicing were implemented government-wide, the U.S. Treasury estimates that the federal government would realize $450 million in savings annually by reducing the cost of entering invoices and responding to invoice inquiries. In addition, e-invoicing enables organizations to improve operational efficiency, and helps them manage cash flow and working capital more effectively.
While companies overwhelmingly see the business benefits that e-invoicing provides, there is still much room for improvement. According to an e-invoicing survey Basware conducted earlier this year with industry association, The Institute for Financial Operations, nearly 90 percent of respondents said that their e-invoicing processes could be improved to support wider financial priorities. Without robust automated processes in place for capturing, transmitting, and processing invoices, organizations struggle to gain visibility into spend, cash flow, and working capital.
The good news is that in the related 2011 Cost of Control – Fuzzy Finance research study Basware recently conducted, 52 percent of financial executives ranked investing in e-invoicing technology to increase productivity as the number one activity that they are more likely to implement now than 12 months ago. They are following the lead of governments around the world that recognize how e-invoicing and increased purchase-to-pay automation enable increased transparency, efficiency and control throughout financial operations.
There are added benefits across the supply chain as well. These automated processes foster intra-organizational collaboration between the Finance and Procurement departments, as well as externally with suppliers and trading partners – all critical elements to achieving collaborative commerce and competitive advantage.
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