Other countries around the world - namely in Latin America and Asia - have embraced e-invoicing on a federal scale, but the United States and many other Westerners have yet to become acclimated with the technology. Payments Source reported that over 50 governments across the globe have already or are in the process of implementing mandates concerning the use of the software for government transactions.
The main focus for those who have switched over is to increase efficiency, both spending-wise and and terms of timing. This allots more money for other public services, and alleviates some pressure from taxpayers. But this isn't the only reason for governments to consider joining the trend.
1. E-invoicing at the government level can improve B2B transactions
Businesses can also profit from a government move to e-invoicing. It can ease the process for borderless commerce between international trading partners and open doors for other companies to make moves overseas, Payments Source said. The source also noted that a uniform platform for everyone can contribute to increased sales and levels of worker productivity, since the process would become streamlined. The sooner the U.S. - and other Western governments - jump on board and set the standard for payments, the more likely it is that businesses will follow suit, leading to heightened profitability and revenue. Profits from international trading help to enhance the U.S.'s GDP, as well as provide additional tax influx.
2. Government can cut spending by a significant margin
Another advantage of e-invoicing is the huge amount of expenditures it can cut down on by eliminating waste of resources and employees' time. The U.S. Treasury estimates that government-wide usage of invoice automation platforms would facilitate savings of $450 million a year. The Treasury projected that employing an e-invoicing system could reduce payment-related costs by about 50 percent each year. These valuable savings could be used to support other government functions that are devoid of sufficient funding. Other nations have undergone big cost-saving initiatives spearheaded by a switch from traditional payment processing to e-invoicing, and the U.S. could profit similarly.
3. Demand for instant payment systems is growing worldwide
Payments Source said that consumers and businesses alike are seeking more immediate ways to complete transactions. Real-time, online invoicing is a major advantage in the marketplace, as it allows for quicker trade processing and asset acquirement. Suppliers can be less dependent on buyers for cash flow, since they can receive payments right away, and can therefore expand and make investments without having to worry about returns.
4. Feds continue to study payment solutions, indicating a potential impending development
An 18-month study by the Federal Reserve, published in January of this year, looked at possible alternatives for invoicing at the federal level. The report was fairly inconclusive, though it acknowledged and addressed several different methods of introducing invoice automation to save money. However, the Feds ultimately opted to form a task force composed of industry experts to further look into the matter. The end goal, of course, is to find ways to streamline payment processing, and the inevitable conclusion will likely be one that favors the implementation of an e-invoicing mandate, government-wide. The study recognized the success other countries have seen in standardizing this software at the federal level, which indicates that a change in policy is imminent.
At this point in time, it makes too much sense - fiscal, workflow and otherwise - for the U.S. government not to embrace and introduce e-invoicing software. It will create new opportunities for businesses and provide welcome relief to taxpayers. The initial investment may be pricey, as all investments are, but over the course of just a couple years, the technology will have paid for itself.