Is this the tipping point for e-invoicing?
With many areas of innovation there’s a tipping point. A point at which there’s no going back. And for e-invoicing it may just be about to happen.
Despite the numerous compelling reasons to adopt it – the environment, cost savings, efficiencies – and despite the fact that it is a well established way or working, e-invoicing just hasn’t caught on. Only a small proportion of invoices sent between businesses today are e-invoices. But we could see a tipping point as increasingly, government bodies begin to mandate the use of electronic invoicing. Already, in Europe, we’re seeing more and more moves toward a digital trading and the introduction of the Single European Payments area is likely to accelerate this process. Yesterday, the US Treasury joined those organisation requiring it’s suppliers to invoice electronically.
Launching a new initiative in support of President Obama’s “Campaign to Cut Waste” across the federal government, the U.S. Department of the Treasury explained that it is mandating that all Treasury Bureaus implement the Internet Payment Platform (IPP), an electronic invoice processing solution, by the end of fiscal year 2012. Treasury will require that its commercial vendors submit their invoices using IPP by the end of 2013. The aim of the initiative is to improve government efficiency and cut costs for taxpayers.
The Treasury press release explains the potential benefits: “Treasury estimates that adopting IPP across the federal government would reduce the cost of entering invoices and responding to invoice inquiries by as much as 50 percent or $450 million annually. These government-wide savings equal roughly one quarter of the $2.1 billion of the efficiency savings that the President’s 2012 Budget called upon agencies to identify.”
The whole of the press release can be read here
There have been many indicators that 2011 would be the year that e-invoice took off. The global financial crisis, the maturation of the technology, changing legislation – especially in Europe – and the US Treasury’s announcement yesterday is the most significant indicator yet. Let’s hope that the wider US public sector follows their lead then we really will be in for an exciting ride.