A lack of resources and difficulties with supplier adoption are preventing local authorities from making proper use of e-invoicing, a study has said.

Survey suggests many organisations are still printing PDFs – Photo credit: Flickr, Jared Moran

A survey of 140 people at 129 public sector organisations, including local government and the emergency services, published this week by iGov, showed that e-invoicing was broadly supported by staff.

Some 64% of respondents said that it would be a cost-effective way of increasing efficiency within their organisation, while 61% thought it would speed up the processing of invoices. In addition, 31% of respondents felt that it would offer an effective way to measure fraudulent activity.

However, despite an increase in the number of people using PDF email invoicing, almost three-quarters of respondents said that they were still printing and scanning PDF invoices.

“It is surprising to see so many participants still using this method given that it is an inefficient and resource heavy method of invoicing, and is in conflict with the emphasis across the sector to create further efficiency and cost savings,” the report said.

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Stephen Carter, the regional network business area director of Basware – which carried out the survey with iGov – stressed that such manual handling of PDF-based invoices was a waste of time and money.

“By reprocessing these invoices, all the efficiency opportunities offered by the supplier sending a PDF email are lost and new costs are added,” said Carter. “This means that the lack of a top down push is adding new costs to the finance team, just as a new round of budget cuts are coming down the line.”

Meanwhile, more than half of the respondents said they also scan paper invoices for around a third of their total invoices, while 19% use manual entry for invoices for more than a third of their total.

When asked what was holding them back from increasing their use of e-invoicing, the biggest barrier was a lack of resources, which was chosen by 32% of respondents.

Other barriers were resistance to change or cultural challenges, chosen by around 17% of respondents and difficulties gaining supplier adoption, which was picked out by 28% of respondents.

However, a recent study on invoicing by the Government Digital Service indicated that suppliers are also frustrated by some government departments who still use paper invoicing processes.

That work, carried out by the Digital Marketplace team, found that some departments asked suppliers to send invoices by post.

One supplier described this as “nerve-wracking” because there is no automatic confirmation of receipt, while another complained that this went against their commitment to work in an environmentally friendly way.

Indeed, the iGov survey found that 22% of respondents said one barrier to the use of e-invoicing was a perception that current process worked well enough.

The iGov survey also asked about future plans for invoicing, and found that 37% planned to invest in receiving e-invoices, while 27% planned to invest in Accounts Payable automation and 26% planned to fund e-procurement.

Carter said that it was positive that e-invoicing was on the to-do list of organisations. But he added: “The challenge now is to make sure the executive budget owner understands why this must move to the in-progress pile and fast.

“This needs to happen before the cost of the invoice process rockets as PDF traffic will only increase over the coming months and years.”