Way Past Due: Mandatory E-Invoicing by the Federal Government

Trade Financing Matters welcomes this guest post form Bob Solomon CEO, Software Platform Consulting. Bob is a B2B information network guru who helped build the Ariba Supplier network business.

I don't care if you are liberal, conservative, Tea Party or uninterested, here's a policy you should support:

The US Federal Government should phase-in a requirement that all entities that do business with it should have to submit an electronic invoice to the Federal Government to get paid (and probably get paid electronically as well, though payment initiatives seem to exist).

This policy would have so many benefits for the government, taxpayers, and businesses that it is hard to believe everyone in the space is not calling for it:

  1. It would save suppliers and government money. Government and suppliers would cut down on mailrooms, paper envelopes and invoices, postage, etc.
  2. It is the kind of market-based "nudge" that would jump-start the B2B e-invoicing segment which exists in the US, but lags in countries that have such mandatory B2G programs, such as in the Nordics and our trading partners in Latin America. This  change would move the private sector faster to electronic invoicing and payment save millions of trees and improve small business working capital.
  3. It probably cuts down on fraud and lost taxes.
  4. It would make spend analysis easier for the open government initiative, after all these are public expenditures.  It would be far easier to see what the federal government pays for everything.  This would also have a good market effect on "beltway bandits".

I know there are lots of details to work out:  timing, technology, etc., but if most of Latin America and the EU can figure it out, yes we can too.  (Small companies could use PO-flip, PDF, or submit invoices via a web portal.)  By the way, I think the DOD may already require e-invoicing for its $500 billion plus in purchases, so there is a Walmart-sized start.

I have no idea if this can be done through executive order or if it has to go through Congress, but either way it should have bi-partisan support.  Write your congressperson, the President, and tell them we should get this done.  Quit your bitching and help.


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