E-Invoicing and the NHS – A Healthy Step


Love it or hate it – you’re likely in the latter category if you need a new hip or knee – the National Health Service (NHS) is a model of transparency compared with many health systems throughout the world. But that transparency has not extended to accounts payable and supplier management activities on a systematic basis to date, although individual health trusts have worked their own efforts with solid results. (As an example, Steria and Tradeshift have success with a small corner of the NHS.)  

Yet change is coming. In a recent column in The Information Daily, Basware’s Steven Carter highlights how UK central government is taking steps to make prompt payment standard within the NHS, which depending on your perspective, requires e-invoicing. For the sake of this article, I’ll stay neutral on the topic of whether or not e-invoicing is the right foundation for prompt payment.

In comparison to private sector organizations implementing e-invoicing, Steven writes, “what makes the NHS different is the use of open standards and the Pan-European Public Procurement On-Line (PEPPOL) network. One simple open network connection will unlock every NHS trust to the supplier.”

Much of Steven’s column is an advertorial for Basware – no doubt one of the leaders in this market – along with others including Ariba/SAP, Taulia, Tungsten, Tradeshift, Hubwoo/Perfect, IBX/Capgemini and others. But the arguments he makes in favor of an open network are sound – and one that not every competitor can answer to.

Besides prompt payment, there are many cases to be made for public sector e-invoicing. I covered some of these in the Public Spend Forum series below:

The case includes better supplier management and engagement. For example, a standardized supplier on-boarding process that not only captures information a single-time but keeps vendor details up-to-date on a continuous basis – when implemented in the right manner. Accurate information starts with contact and banking details and can also include insurance, diversity, corporate social responsibility (CSR) and other details.

Or consider the ability to insure that departments and agencies are capturing line level detail from suppliers on individual requisitions. Line-level visibility brings many downstream benefits, including driving stronger strategic sourcing outcomes based on the ability to identify specific requirements and have all past transaction information based on actual requirements a single place.

The adoption of e-invoicing under the guise of cash acceleration in the economy from prompt government payments in the UK – including the NHS and beyond – is a great Trojan horse for much more provided such program can on-board and capture the long-tail of suppliers. But the overall benefits that e-invoicing can bring go far beyond prompt payment.

Moreover, e-invoicing is not necessary for payment acceleration, depending on how one structures a payables or receivables financing program to begin with – which should always, by nature of the advantages of trade financing portfolio strategies, contain multiple financing tools based on supplier size, strategic value, category and other factors.

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