M A K I N G I T H A P P E N

E-Invoicing

MAKING IT HAPPEN



in the Public Sector



Stephen Carter, Head of e-Invoicing, Basware

on behalf of the









1. EXECUTIVE SUMMARY



3. WHAT PROBLEM ARE WE SOLVING



5. HOW ARE THE COST SAVINGS ACHIEVED?



7. TACTICAL APPROACHES TO INVOICE AUTOMATION







11. THE BUSINESS CASE











P05

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P25

P28

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P48

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P79

Contents















































































1. EXECUTIVE

SUMMARY

ELECTRONIC

INVOICING



B2G TRANSACTIONS

COULD SAVE THE

PUBLIC SECTOR

AND ITS SUPPLIERS



BILLION PER ANNUM









of e-Invoicing in public





















21 March 2016. It describes











2. PURPOSE



THIS REPORT



TO LOCAL

GOVERNMENT

ORGANISATIONS

ON HOW TO

MAKE THE MOVE



Not Sure

Not interested

 





“ Electronic invoicing could save the public sector and its











Stephen McPartland MP.



 has been used to















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









































1. 





1. 



















3. WHAT PROBLEM

ARE WE SOLVING?

PAPER AND



ARE LABOUR

INTENSIVE,



AND COSTLY

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

1 . 2. 3. 4. 5. 6 .

























3. WHAT

PROBLEM ARE

WE SOLVING?

3.1

ORGANISATIONAL

SIZE TO SUPPORT

PROCESS

0-10



11-20



21-30

31-40

41-50



Up-to 50



Distributed



No answer











• 

• 

• 











Actual Cost per Invoice Processed



3. WHAT

PROBLEM ARE

WE SOLVING?

3.2

WHAT IS THE







Unable to calculate







Between





Between









No answer



3. WHAT

PROBLEM ARE

WE SOLVING?



Invoice Process







2 4 6 8 10 12 14 16









BILLENTIS 2015 REPORT

LEVEL

IGOV AVERAGE



Although a third of respondents were unable to even calculate the basic cost per invoice





£4.54 per invoice.



Club





COST PER INVOICE SOURCE

£4.54 iGov Survey 2015

£2.73 

£7.21 

£14.41 

 























3. WHAT

PROBLEM ARE

WE SOLVING?

3.2

WHAT IS THE



Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

      

1 . 2. 3. 4. 5. 6 .



Cost













     





   













treated as paper invoices. So, although the supplier has saved















to the fraudster.

3. WHAT

PROBLEM ARE

WE SOLVING?

3.3

THE HIDDEN COSTS























• 

• 

• 

• 

• 

• 







4. THE SAVING







REDUCES HUMAN

INTERACTION WITH

AN INVOICE

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

0% 0% 20% 33% 33% 13% 100%

1 . 2. 3. 4. 5. 6 .















4. THE SAVING





Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

100% 100% 70% 20%  64%

1 . 2. 3. 4. 5. 6 .

Saving

4. THE SAVING





4.1





Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

100% 100% 70% 20%  64%

1 . 2. 3. 4. 5. 6 .

Saving

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

      

      

Saving 

1 . 2. 3. 4. 5. 6 .

Paper

Electronic

To understand how e-Invoicing can be used to reduce costs,

















achievable savings per invoice processed is £9.50.













• 

• 

• 

• 

4. THE SAVING





4.2

THE HIDDEN

















     



   







 



The PO is approved before being sent to the supplier. When the invoice is received, its

















































COST SAVINGS

ACHIEVED?



VALIDATION &

MATCHING SAVINGS

 



















Islington Council

 





















COST SAVINGS

ACHIEVED?



VALIDATION &

MATCHING SAVINGS









 



























 

















process on both sides.



COST SAVINGS

ACHIEVED?



PROMPT PAYMENT



































PREVENTION

EVERY DAY, THE

PUBLIC SECTOR

IS EXPOSING ITS

EMPLOYEES TO



CYBER CRIME







Yes

















PREVENTION

No Known









Known























• 



• 

• 

• 





































PREVENTION

6.1

RECOGNISING

THE PROBLEM

6.2

STOPPING

RANSOMWARE

ATTACHMENTS























address and the address of the sender. This would be provided within the business control





















stopped overnight.



























PREVENTION

6.3

TACKLING INVOICE





6.4

ADDRESSING

APPROVAL

THRESHOLD



STOPPING

COLLABORATIVE

































6.6

STOPPING DUPLICATE

PAYMENTS





















7. TACTICAL APPROACHES

TO INVOICE AUTOMATION

EXISTING



IS AN IMPORTANT



SAVINGS ACHIEVABLE



SUPPLIER

OUTSOURCED

SCANNING

NOTHING SCANNING

OR OCR

 

IMAGING

SUPPLIER

PORTAL

SENDING UNSTRUCTURED INVOICE

 

23% 41%  47% 33% 20%



This process involves scanning a paper invoice and turning

































the original paper content. Outsourced scanning does not











 











7. TACTICAL

APPROACHES

TO INVOICE

AUTOMATION

7.1

SCANNING



COVERAGE

7.2

OUTSOURCED



COVERAGE

7.3



47% COVERAGE

 































hidden costs associated with the invoice process but does not





























supplier e-Invoicing. Although suppliers with a high throughput





7. TACTICAL

APPROACHES

TO INVOICE

AUTOMATION

7.3



47% COVERAGE

7.4

IMAGING AND



33% COVERAGE



SUPPLIER



COVERAGE















THE BARRIERS



ADOPTION



UNABLE TO BUILD A BUSINESS CASE

RELUCTANT TO ADD MORE SERVICES

ROI NOT HIGH ENOUGH

INITIAL CAPITAL COST

CURRENT PROCESSES WORKING WELL

   

GAINING SUPPLIER ADOPTION

  

WE ALREADY USE E-INVOICING













suppliers. Through e-Invoicing, suppliers can access the global



























• 

• 

• 

• 









THE BARRIERS



ADOPTION



GAINING

SUPPLIER ADOPTION

8.1.1 Supplier Savings





• 

• 

• 



the barriers to invoice approval. This reduces the overall cost of credit control and debt







• 

• 

• 

























THE BARRIERS



ADOPTION



GAINING

SUPPLIER ADOPTION

 











THE BARRIERS



ADOPTION



GAINING

SUPPLIER ADOPTION

SUPPLIER BILLING CAPABILITIES

PAPER  EDI CEN/PC434 SUPPLIER

PORTAL

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

 



THE BARRIERS



ADOPTION

METHOD  SUITABILITY

Supplier Portal 







an e-Invoice.









Structured





















Structured XML







It is then either loaded into or











(e.g. PEPPOL).





• corporate or global



EDI 



















• corporate or global





Unstructured











create an e-Invoice which is loaded in







 





 

SUPPLIER

MATURITY

CHARACTERISTIC

Early Adopter 





Mainstream 





Late Majority 





Laggard 

no other choice.



THE BARRIERS



ADOPTION



GAINING

SUPPLIER ADOPTION

TECHNICAL

MATURITY

SUPPLIER

SIZE

TRANSACTIONAL

VOLUME

 

SUPPLIER SIZE CHARACTERISTIC

Small or

Micro Suppliers









Medium Business Maintains local control over the invoice







Large Corporate 









Global Enterprise 











THE BARRIERS



ADOPTION



GAINING

SUPPLIER ADOPTION

 

TRANSACTIONAL

VOLUMES



 





 







 







if possible.

 



 







THE BARRIERS



ADOPTION





prevailing culture and processes. As e-Invoicing is not a single











be calculated and a strong business case created.



against actual e-Invoice usage



THE BARRIERS



ADOPTION



WE ALREADY HAVE



CURRENT PROCESS

IS GOOD ENOUGH



Unstructured OCR Process



Process with e-Invoicing

e-Invoice Based Process







































THE BARRIERS



ADOPTION



WE ALREADY HAVE



CURRENT PROCESS

IS GOOD ENOUGH

SUPPLIER BILLING CAPABILITIES

PAPER  EDI CEN/PC434 SUPPLIER

PORTAL

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS























“One of the biggest challenges to progressing with e-Invoicing































THE BARRIERS



ADOPTION





OR RELUCTANCE TO

ADD SERVICES













and cloud services.



THE BARRIERS

TO EINVOICING

ADOPTION

SUPPLIER BILLING CAPABILITIES

PAPER  EDI CEN/PC434 SUPPLIER

PORTAL

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS







E-INVOICE MIDDLEWARE COMPONENTS





































and available data.









ECONOMIC





PROMPT PAYMENT



PLACE ORDER APPROVE INVOICE PAY INVOICE

DELIVER INVOICE

BANK CLEARING

CASH

BUYER

SUPPLIER

TIMELINE





Invoice Issue Date

Supplier Chases Payment

Invoice Due Date

























ECONOMIC





PROMPT PAYMENT





DYNAMIC DISCOUNTING





      





























ECONOMIC









PERSONAL BUDGETS



PLACE ORDER RECONCILE INVOICE

PAY P-CARD

CASH DELIVER

BANK CLEARING

BUYER

SUPPLIER

TIMELINE



Invoice Paid

Invoice Issue & Due Date

INVOICE













to the supplier on the strength of the invoice that has been issued and approved. When



















ECONOMIC













PLACE ORDER APPROVE INVOICE

PAY INVOICE

DELIVER INVOICE

BANK CLEARING

BUYER

SUPPLIER

TIMELINE





Invoice Issue Date



Invoice Due Date

BUYER BANK



































ECONOMIC







DYNAMIC

DISCOUNTING

SOLUTIONS



PLACE ORDER APPROVE INVOICE

DELIVER INVOICE

BUYER

SUPPLIER

TIMELINE





Invoice Issue Date



Invoice Due Date

BUYER BANK

AGREE DISCOUNT

Invoice Due Date





concepts outlined above.

 



































ECONOMIC







OTHER PAYMENT

METHODS ARE

COMING ONTO

THE MARKET

E-Order Payment

E-ORDER AUTO-RECONCILE INVOICE

PAY V-CARD

CASH INVOICE

BANK CLEARING

BUYER

SUPPLIER

TIMELINE



Invoice Paid

Auto e-Invoice Issued on Payment

DELIVER

 























ECONOMIC







OTHER PAYMENT

METHODS ARE

COMING ONTO

THE MARKET

Invoice E-Payment

PLACE ORDER APPROVE INVOICE PAY INVOICE

DELIVER INVOICE

BANK CLEARING

BUYER

SUPPLIER

TIMELINE





Invoice Issue Date



Invoice Due Date

 































ECONOMIC







OTHER PAYMENT

METHODS ARE

COMING ONTO

THE MARKET



PLACE ORDER APPROVE INVOICE PAY INVOICE

DELIVER INVOICE

BANK CLEARING

TIMELINE





Invoice Issue Date



Invoice Due Date

ADVANCE CASH ON INVOICE





CASH













Maturity Levels Based on iGov 2015 Survey

10.

ORGANISATIONAL



BENCHMARK

Innocent

Aware



Capable





































possible.



































10.

ORGANISATIONAL



BENCHMARK

10.1

INNOCENT

10.2

AWARE

10.3

ACTIVE

















































evaluated.











10.

ORGANISATIONAL



BENCHMARK

10.4

CAPABLE



OPTIMISED

10.6

EXCELLENT















the process.







• 

• All spend is controlled and visible regardless of source

• 

• 

• 



• 

• 

• 

• 

• 

• 

• 

and auditable

• 

10.

ORGANISATIONAL



BENCHMARK

10.7

WHAT IS



EXCELLENCE?



WHAT COULD



EXCELLENCE

LOOK LIKE?



• 

• 

• 

• 

controls

• 

• 



• 

• 

• 

10.

ORGANISATIONAL



BENCHMARK



WHAT COULD



EXCELLENCE

LOOK LIKE?













Cost of Current Process



Possible Saving











11.

THE BUSINESS

CASE

11.1

COST PER INVOICE



LEVEL

COSTS SOURCE PAPER INVOICE

COST



COST

POSSIBLE

SAVING PER



 

Lowest

  

 

Average

  £2.99

 

Average

  £4.75

 

Highest

  £9.50















11.

THE BUSINESS

CASE

11.2



SUPPLIER ADOPTION



LEVEL

SAVING

PER

INVOICE



INVOICES



INVOICES



INVOICES



INVOICES



INVOICES

      



Capable

     

      





     



LEVEL

SAVING

PER

INVOICE



INVOICES



INVOICES



INVOICES



INVOICES



INVOICES

      



Capable

     

      





     































• 

• 

• 



12. MAKING



HAPPEN

12.1





SAVING LEVELS

POSSIBLE

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

      

0% 0% 20% 33% 33% 13% 100%

      

Saving 

1 . 2. 3. 4. 5. 6 .



Cost



Cost





















processes and supports the whole range of e-Invoicing services available.

12. MAKING



HAPPEN

12.1





SAVING LEVELS

POSSIBLE

SUPPLIER BILLING CAPABILITIES

PAPER  EDI CEN/PC434 SUPPLIER

PORTAL

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS







E-INVOICE MIDDLEWARE COMPONENTS

























12. MAKING



HAPPEN

12.2





SAVING LEVELS

POSSIBLE

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

      

0% 0% 20% 33% 33% 13% 100%

      

Saving 

1 . 2. 3. 4. 5. 6 .



Cost



Cost

















12. MAKING



HAPPEN

12.2





SAVING LEVELS

POSSIBLE

SUPPLIER BILLING CAPABILITIES



PAPER 

EDI CEN/PC434 SUPPLIER

PORTAL

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS







E-INVOICE MIDDLEWARE COMPONENTS

EXISTING TECHNOLOGY

The business case in this instance needs to focus on adding







scanning or OCR technologies were replaced with a lower









12. MAKING



HAPPEN

12.3

ACTIVE OR



SAVING LEVELS

POSSIBLE

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

      

0% 0% 20% 33% 33% 13% 100%

      

Saving 

1 . 2. 3. 4. 5. 6 .



Cost



Cost













12. MAKING



HAPPEN

12.3

ACTIVE OR



SAVING LEVELS

POSSIBLE

SUPPLIER BILLING CAPABILITIES

EDI

PAPER 

SUPPLIER

PORTAL

 CEN/PC434

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS







E-INVOICE MIDDLEWARE COMPONENTS

EXISTING TECHNOLOGY EXISTING TECHNOLOGY











12. MAKING



HAPPEN

12.4 OPTIMAL



LOWEST SAVING

LEVELS POSSIBLE

Process

Steps

Capture

or Receive

Enter &





& Matching

Dispute

Management

Payment

& Cash

Management

Archiving

Total

6% 17% 23% 14% 27% 13% 100%

      

0% 0% 20% 33% 33% 13% 100%

      

Saving 

1 . 2. 3. 4. 5. 6 .



Cost



Cost









12. MAKING



HAPPEN

12.4 OPTIMAL



LOWEST SAVING

LEVELS POSSIBLE

SUPPLIER BILLING CAPABILITIES



PAPER 

EDI

CEN/PC434

UNSTRUCTURED INVOICE

STRUCTURED E-INVOICE

BUSINESS CONTROLS







EXISTING TECHNOLOGY EXISTING TECHNOLOGY

STRUCTURED

E-INVOICE

NEW TECHNOLOGY

SUPPLIER

PORTAL































12. MAKING



HAPPEN



SUMMARY













































e-Invoicing across the whole process and how it can reduce





13. APPENDIX A

LEGISLATIVE

ENVIRONMENT

13.1

EUROPEAN













• 

with paper invoicing

• 



• 



• 

• 

















The UK has supported and reinforced the values of the











assent. This Act gives, inter alia, power to regulate in the area of







the English public sector.

13. APPENDIX A

LEGISLATIVE

ENVIRONMENT

13.2

EUROPEAN DIGITAL

AGENDA 2020

13.3

SMALL BUSINESS,

ENTERPRISE &

EMPLOYMENT





















































be read across Europe.











13. APPENDIX A

LEGISLATIVE

ENVIRONMENT

13.4

LATE PAYMENT

DIRECTIVE



CEN PC/434

































13. APPENDIX A

LEGISLATIVE

ENVIRONMENT

13.6

TIMETABLE



13.7

EUROPEAN



















14.2 Account Receivables (AR)







14.3 Approver





a Goods Receipt Note.





















 











14.7 Credit Control





credit notes.

14. APPENDIX B



TERMS

14.8 Digital Signature









Signatures.

 













14.10 EDI (Electronic Data Interchange)









14.11 ERP (Enterprise Resource Planning)









 







 











14. APPENDIX B



TERMS

14.14 GRN (Goods Receipt Note)





as ordered.

 











14.16 Invoice (Purchase)







14.17 Invoice (Sales)















structured e-Invoice.

 





 







14. APPENDIX B



TERMS

 

















14.21 Outsourcing













 







 









proposes.









14. APPENDIX B



TERMS

 

















14.25 Purchase Order (PO)















unstructured e-order or structured e-order.

14.26 Scanning









14.27 Structured e-order









14.28 Structured e-Invoice







14. APPENDIX B



TERMS

14.29 Supplier









14.30 Unstructured e-order











14.31 Unstructured e-Invoice









14. APPENDIX B



TERMS





 





15.2 Reference Materials

































15.2.7 CEN PC 434





APPENDIX



MATERIAL &

ACKNOWLEDGE

MENTS

























APPENDIX



MATERIAL &

ACKNOWLEDGE

MENTS

About

the UK



e-Invoicing



 was established in































• 

• 

• 













and sellers of goods and services.

16. ABOUT THE

UK NATIONAL





16.1 HISTORY

16.2 MISSION

16.3 ACTIVITIES

16.4 OBJECTIVES





• 

• 

• Andrew Coulson, Independent Consultant and Specialist

• Bill Cavanaugh, Islington Council

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

16. ABOUT THE

UK NATIONAL





















































Stephen Carter







.













16. ABOUT THE

UK NATIONAL





16.6

ABOUT THE AUTHOR

16.7

THE ADOPTION



IN PUBLIC

PROCUREMENT







