Power of PAYBOX®
Federal Government Mandate Could Drive E-Invoicing Adoption
Electronic invoicing is set to get a shot in the arm from a federal government mandate requiring that commercial companies submit their invoices to the U.S. Department of the Treasury electronically.
Starting in fiscal year 2013, all commercial companies will be required to submit invoices to Treasury via the government's Internet Payment Platform. Part of President Obama's "Campaign to Cut Waste" across the federal government, the mandate could reduce the Treasury's cost of entering invoices and responding to inquiries by as much as 50 percent -- saving taxpayers $7 million a year. If e-invoicing were required across the federal government, the savings would hit $450 million a year.
Conversely, Treasury says that e-invoicing will enable companies that do business with the federal government to collect payments faster, and gain instant, online access to invoice status. While countries such as Finland and Mexico have already passed legislation designed to drive the adoption of e-invoicing, Treasury's mandate is the U.S. government's first step in this area.
The mandate comes at a time when more businesses are recognizing the tremendous benefits that e-invoicing delivers to both buyers and sellers (namely, faster cash flow, lower costs, better visibility into invoice status, more discount opportunities). Billentis estimates that the use of e-invoicing increased by 20 percent in 2011 alone. Mandating that companies that do business with the government submit their invoices electronically will be another catalyst in the growth of e-invoicing.
But the mandate raises another issue: If the federal government can deploy e-invoicing, why can't private businesses?