Dan JellinekEditorThursday 24 November 2011

How to save a billion - scrap those invoices

The public sector could be missing out on as much as £3 billion a year in savings by failing to switch over to electronic invoicing, an industry group has said.

Nigel Taylor, head of e-invoicing solutions at e-commerce specialist GXS and a spokesperson for the UK e-Invoicing Advocacy Group, made the claim to a House of Commons meeting of the Conservative Technology Forum.

E-invoicing is the removal of paper from the invoicing process, either by use of web-based forms or data exchange between buyer and supplier systems. Already widely used in the corporate sector and spreading to smaller businesses, it saves money by removing the need to hire people to print, handle, match and store paper invoices.

Speaking after the House of Commons session, Taylor told UKAuthority.com that by extrapolating from European research it could be estimated that the savings available to the UK public sector as a are more than £1bn a year and could be as much as £3 bn. But he said the practice was currently only "dotted around here and there" in the public sector, partly due to people's bad past experiences with implementing complex e-procurement systems, of which e-invoicing was often viewed as a part.

"In the past, government has focused on e-procurement, but e-procurement is quite a difficult thing to put in place compared to e-invoicing - it touches all areas of a business, with all stakeholders involved", Taylor said. "So perhaps this level of difficulty has put public bodies off considering e-invoicing.

"E-invoicing can be part of e-procurement but It is the easiest place to start as it doesn't require big changes to internal systems".

There is a lack of awareness of the potential benefits of e-invoicing, he said, which range from saving money on staff costs; freeing up staff to move to front line services; combating fraud; gaining access to valuable live data showing the organisation's current financial position; carbon footprint reduction; and the fact that it can make it easier for small businesses to supply public bodies, and facilitate their being paid within 10 days as mandated by the government.

UK public sector pioneers of e-invoicing are few and far between but include the London Borough of Hammersmith & Fulham, which according to the UK eInvoicing Advocacy Group is aiming for cost savings of at least £100,000 a year; Birmingham Primary Care Shared Service Agency (BPCSSA), a body providing finance and procurement services to three Primary Care Trusts and one NHS Trust in Birmingham; and the BBC, though no major central government departments have yet made the switch.

UK e-Invoicing Advocacy Group