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UK central government aims to “use e-Invoicing for all transactions”

The Information Economy Strategy, a paper published by the UK government’s Information Economy Council on Friday, sets out how government, industry and academia can collaborate to retain the UK’s strength in the information economy. Among its recommendations is a commitment to electronic invoicing that we wholeheartedly endorse.

Within a chapter on actions for maintaining an innovative information economy, the paper highlights e-Invoicing as a market opportunity for public procurement: “Our aim is for central government to use electronic invoicing for all transactions.”

This is a big step in the right direction and one we hope will be extended to the whole of the public sector. It is a shame that the government has not mandated e-Invoicing, however, it has left the door open to the possibility in the future. Our experience with the US Department of Veterans Affairs shows that a mandate coupled with value-based incentives make a significant difference to adoption. 

One of the objectives of the government’s strategy is to help SMEs conduct more business online. To encourage SMEs to move to e-Invoicing, service providers have agreed to improve interoperability. This is supported by the model interoperability agreement developed by the European e-Invoicing Service Providers Association (EESPA). 

Governments around the world are making bold statements about e-Invoicing adoption. Mexico, Brazil and Turkey are pushing electronic invoices for all B2B transactions, not just B2G, while other governments are starting with their own suppliers. Their motivation is to harness efficiencies, improve processes and/or prevent VAT fraud. 

For SMEs in particular, e-Invoicing can offer liquidity to the market on an unprecedented scale. Last year, the UK Prime Minister asked large organisations to use supply chain finance to help their suppliers’ cash flows. Coupled with this statement on e-Invoicing, the UK government is championing the promise of both more economical processes and the benefits of early payment. 

We would, however, encourage the government to set a more definitive plan for realising the cost savings and cash-flow improvements that e-Invoicing brings suppliers of all sizes, especially SMEs, across public and private sectors. In the meantime, we continue to endorse the government’s work to promote e-Invoicing.

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