Public sector e-invoicing initiativesare changing the game around the world

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45-65% of all businesses are suppliers to the government. 100% of all businesses and households receive invoices from the government.

Governments around the world are struggling with a need to cut costs while simultaneously providing the same or higher levels of service. This is a huge challenge - one which many governments are addressing by transitioning towards e-commerce.

It should be no surprise then that the two largest markets in the world, the EU and the US have mandated a shift to the e-invoicing for all suppliers to the Public Sector. This transition towards B2G e-invoicing will be highly impactful to companies of all sizes.

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Unlock new value streams with e-invoicing

Basware has a vision for the public sector and e-invoicing is just one part of it. Local and state government are struggling with inefficiency at all levels – and it’s no fault of any individual. Just like companies in the private sector, government has a mix of people and systems which aim to provide a service while acting as a customer at the same time. The legacy of investment in people and processes is currently holding governments back. Basware’s vision is to set government free to unlock new value streams for itself as well as the economy.

No longer 'if' but 'when'

Even if the EU and US weren’t already mandating e-invoicing by 2018, the business case for e-invoicing adopted is solid. The verdict is proven by countless independent studies – it really is only a matter of time before e-invoicing is business as usual. The private sector has already seen the value as a competitive differentiator and has taken the initiative – large and small companies around the world have embraced e-invoicing as the smarter way to do business and while governments may be slower to adopt new technologies, their adoption equals the tipping point.

E-invoicing adoption by governments around the world

In South America, the USA, Europe and Asia Pacific, governments are in various states of adoption of e-invoicing as a means of reducing costs, improving tax collection controls, reducing fraud and even reducing carbon emissions. The US even expects e-invoicing to positively improve cash flows for small and medium businesses. Some governments have already switched over, others are in process of transition and still more are evaluating the practicalities of e-invoicing and e-procurement adoption.  All understand that their role is to promote business – literally, governments are taking steps to make their economies more competitive.

Europe and US B2G e-invoicing by 2018

Within Europe, there are many existing e-invoicing projects. Some countries such as Denmark have and Finland are already at or near 100% e-invoicing to the public sector. Others like Norway have mandates for e-invoicing to federal government in place and a phased approach (2015) for e-invoicing to municipal government. Portugal, Austria and Spain all have various directives in place since 2014 and other countries have step-by-step plans for mandatory e-invoicing by certain dates in the near future. All will have to be ready by 2018 when the EU wide mandate for B2G comes into effect.

In the US, B2G e-invoicing has also been mandated in-line with Europe and 2018. Other initiatives, such as QuickPay and SupplierPay, while focusing on payment will require e-invoicing to make rapid invoice approval and then payment possible. Without a doubt, these and other initiatives around the world will be instrumental in unlocking working capital from the financial supply chain and providing stronger cashflows to both buyers and suppliers.

Latin America is advanced

Latin America is quite advanced already, when it comes to e-invoicing, which Mexico setting the standard. Mexico’s new rules, which took effect in April 2014, go the furthest as they apply to individuals as well as businesses. Many other countries in the region will follow suit, with Guatemala, Ecuador, Uruguay, and Peru expected to implement their own platforms in the next 18 months. In September 2013, Chile’s tax authority, the Servicio de Impuestos Internos, announced plans to roll out mandatory e-invoicing for large enterprises with the aim of having all companies formally enrolled by 2017.

From the Basware Blog

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