Compulsory use of e-invoicing likely to increase

Compulsory use of e-invoicing likely to increase

Posted by Pete Loughlin in e-invoicing, Electronic Invoicing 14 Mar 2013

The Department of Veterans Affairs Financial Services Center (VAFSC) in the US has just become the latest government entity to mandate the use of electronic invoicing supporting the Improper Payment Elimination and Recovery Improvement Act signed by President Obama in January this year.

Analysts and observers interested in e-invoicing have for some time been taking a close interest in developments in Latin America. Despite being relatively late into e-invoicing, the adoption rates in Mexico and Brazil are extremely high because governments have mandated its use. They’re mandating e-invoices because it allows the authorities more effectively to control and manage the collection of taxes.

Purchasing Insight logoI’ve always held the view that this approach would be seen as a little heavy handed in the US and Europe but the move by the Department of Veterans Affairs appears to represent what could be the thin end of a healthy wedge that would see an increase in the compulsory use of electronic trading in order to regulate business transactions more closely.

This is also a feather in the cap for OB10 who have been working with VAFSC since 2007. “Electronic invoicing is the leading technological solution that eliminates error-prone manual processing and prevents improper payments,” says Clint Loeser, VAFSC’s Director of Financial Operations quoted in OB10’s press release. “Receiving e-Invoices from suppliers ensures a faster, more cost-effective and transparent payment process.”

Pete Loughlin can be found on twitter @peteloughlin

  • Christian Lanng March 18, 2013 at 12:21 pm /

    One small comment, in all those countries, government mandated use on solutions that are FREE for suppliers. The alternative would have been massive political backlash.

    Three conditions, most government agencies would (or should be looking for when picking a solution):

    1) Is it free for suppliers?
    2) Is it based on open-standards so multiple vendors can participate?
    3) Is this aligned with other government based supplier facing initiatives and can we consolidate these processes so we don’t annoy the supplier base?

    In this specific project, it seems that the Veteran Administration have had so bad on-boarding rates for some time now (this project is more than 2 years old), that they finally have been pushed to make it mandatory for the supplier base, and at the same time have agreed to pay all the supplier fees. They still don’t have an answer for open standards though, something the Obama administration seem to care quite a bit about in all other parts of government.

    On a sidenote, it will be interesting to see how OB10’s supplier base reacts to the fact it’s free for some suppliers, but not in all cases.

  • Stefan Foryszewski March 19, 2013 at 11:49 am /

    We are not at liberty to disclose client confidential data about this program, however it is sufficient to say that the ‘facts’ outlined by Christian are again inaccurate. The program is going very well, thank you.

    Also, the Brazilian government mandate does not require the use of solutions that are free to suppliers. The Mexican mandate only requires that a basic web application is made available free of charge.

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