The Office of Management and Budget (OMB) has issued a memorandum announcing the future mandating of electronic invoices for federal e-invoicing by end of fiscal year 2018.
The memorandum forms part of a larger drive to reduce inefficiencies within the government, ultimately to reduce the taxpayer burden and better utilize resource. By fiscal 2018 all-electronic invoicing will be mandatory for all federal government agencies; the U.S. federal government is the largest purchaser of goods and services in the country; the government collectively processes over 19 million invoices per year; and only 40% of these are processed as electronic invoices.
That leaves a whopping 60% of invoices – 11.4 million invoices – to start processing as e-invoices in just over two years. Can it be done? It is optimistic for sure. But the OMB is committed to mandatory e-invoicing to improve government efficiency and reduce the cost to the tax payer.
As part of this drive, not only will all-electronic invoicing be mandatory, there will also be rules in place regarding how this e-invoicing needs to take place to be compliant. The exact rules are yet to be issued, however the suggestion is that federal bodies will need to process e-invoices through a shared service.
The aim is to ensure consistency and reduce administrative burden on vendors, yet it does also complicate things in some respects. With multiple agencies making up federal government, this means multiple accounting packages, multiple ERPs, multiple workflows…all this needs to be managed by the shared service. And fiscal 2018 isn’t far away.
As is often the case when we start talking about e-invoicing we think about Europe. We hear so much about how Europe is adopting e-invoicing; how Europe is leading the way. And the reality is that in many European countries electronic invoicing has not yet been widely adopted. However, there are some clear success stories and one that we can learn from with our federal government dilemma is the Scottish government.
Read the full article at Paymentssource.
Read the whitepaper from the Federal Reserve Bank of Minneapolis, Payments, Standards and Outreach Group - U.S. Adoption of Electronic Invoicing: Challenges and Opportunities