Businesses dealing with the US Treasury Department will need to begin integrating electronic invoicing into their accounting systems or face the prospect of losing their supplier status. Announced as part of President Obama’s “Campaign to Cut Waste”, e-Invoicing will be enforceable by fiscal year 2013.

United States Dept Of The Treasury

The Treasury Department is expected to have their e-invoicing system in place by the start of the 2012 financial year to give suppliers 12 months to get their affairs in order and to test whether the new system works. It is hoped that implementation of electronic invoicing methods wills reduce current processing costs by half, saving $7 million a year.

A US-based provider of electronic invoicing services carried out a report to identify how well-used the technology was and found that at least one-third of respondents did not use it at all. From these results it is suggested that as much as 33% of US businesses still use manual, paper-based invoicing as their primary method of billing. The survey did however show a marked increase in e-invoicing as in 2010 58% of respondents were still relying on manual invoice processing.

The upcoming change in invoicing at the Treasury Department was not the main reason for businesses adopting the methodology however. 72% of respondents said that they used Electronic Invoice Presentation and Payment (EIPP) to increase operational efficiency, thereby reducing their business running costs. 55.7% also stated that e-invoicing allowed them to optimise their cash flow.

Respondents also reported that manual invoice processing wasted company time when entering and scanning invoices, approving payments and tracking down lost paper work. The introduction of EIPP helped eliminate all of these resource drains, reducing delays and removing the chances of human error creeping into the system.

As yet, details of the Treasury Department’s e-Invoicing system are still unclear and industry experts are warning of potential problems for companies looking to implement their own systems. However by using a hosted system, such as Celtrino’s Smart Admin, businesses can transfer the responsibility for initial investment and interoperability development to the service provider, allowing them to focus on their core business and fulfilling Government orders.