Everyone has a stake in the efficiency of local and central government, we all pay taxes. And I for one, dislike paying for someone to process paper invoices. Especially as there is a better and simpler way of doing this – and has been for some time. Likewise, to enable growth and support suppliers, prompt payment targets have been introduced. On the whole these targets are being met and releasing capital back into the economy. Yet in most public sector bodies, in order to achieve this simply more people are now processing the invoices. And this is seen as success by most senior managers in the public sector. Targets are hit and taxes go up, so everyone is happy. No!
But things can change and must change. Hidden within the details of the last Bill¹ to gain Royal Assent in March was the key to changing the paper based status quo. It has now been officially acknowledged that processing electronic invoices, or e-invoicing, is the way forward for the Public Sector. Something our European counterparts have been doing for several years. Not only will this save time and release resources from the back-office to more public facing services, it will also enable more efficient cash management within Government.
However, in a typically English way, e-Invoicing needs to be pushed by the supplier rather than mandated by the public sector body. So why bother?
Quite simply, as a supplier and tax payer submitting a real or structured² e-invoice is better for you. It will get approved quicker, get paid on time and make you easier to buy from. The all-important stickiness that locks in a customer for the long term. With the Royal Assent of the SBEE¹ Bill, from May 2017 or earlier³, no public sector body can refuse to receive a real e-Invoice from you. Finally, you can start to invoice every customer electronically without hitting real barriers. The more e-invoicing into the public sector, the more we all save as tax payers. One day it may even become mandatory – you never know.
The SBEE Bill¹ also contains other hidden gems, such as Prompt Payment down the supply chain and Invoice Financing, so watch this space for the next part of my blog article.
¹ Small Business, Enterprise & Employment Bill or SBEE
² A structured invoice is one that’s not a PDF or paper but computer readable
³ May 2017 is the European Commission deadline, whilst the government and bodies like the UK National e-Invoicing Forum (UKNeF) are pushing for an earlier date in England.