The U.S. government recently released a mandate that all invoicing to the federal government needs to be sent electronically. The mandate, which takes effect by the end of fiscal year 2018, will impact the 19 million invoices being sent to the federal government annually. Currently, only about 7 million invoices are being submitted to the government electronically.
So how does this effect businesses? The U.S. government is the largest purchaser of goods and services in the United States. Any businesses that is currently providing a good or service to the government will be required to find a solution to provide e-invoices to the government. The U.S. is not alone in this venture, however; Brazil, Mexico and European countries have either mandated this or are far outpacing the United States in e-invoicing efforts.
This mandate could have a positive effect on businesses that are forced to move to e-invoicing methods in order to invoice the government. Although some might see this as a hassle or an added cost to being able to do business, e-invoicing saves companies a ton of money in the long run. No longer are you printing invoices and statements, stuffing envelopes, licking stamps and hoping that the invoice makes it there on time. E-invoicing methods allow you to simply pull in the invoice from your ERP or business software and automatically send an email with an invoice as soon as the invoice has been created. Not only is e-invoicing methods less cost and less time spent by the accounts receivable team, but it’s more accurate. You’re not accidentally missing an invoice or forgetting to attach a purchase order. It’s all done automatically for you.
Once businesses start adopting e-invoicing methods for their government business partners, it doesn’t have to just stop there. It wouldn’t make much sense to continue sending paper invoices and statements to your B2B business partners, while you’re using sophisticated e-invoicing methods with your B2G partners. In fact, the federal report supports these sentiments, “The argument is, if a private business supplier implements eInvoicing to address government requirements, they may well extend this implementation to other businesses they supply”.
In the long run, the federal government may be helping U.S. businesses become more efficient and helping them access more cash flow.[vc_row][vc_column][vc_cta h2=”UNDERSTANDING ELECTRONIC INVOICE PRESENTMENT AND PAYMENT” txt_align=”center” color=”turquoise” el_width=”xs” add_icon=”bottom”]
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