B2B Payments

Scot Town Sees eInvoicing As A Cost-Saver

The city council in Aberdeen processes some 75,000 invoices each year from 147 registered suppliers. To help it process those invoices more effectively, the Scottish city next month will go live with its implementation of a cloud-based eInvoicing software system.

“We will be one of the first councils in the UK to be fully automated in terms of accounts payable,” Willie Young, the council’s finance convener,” said in a statement in a release announcing the new system. “It reflects how forward-thinking we are in the use of computer systems and new technology to speed up the payment process and save public money.”

The council is anticipating significant cost and time savings by implementing the Cloud Invoicing service, a hosted eInvoicing system from Advanced Business Solutions, which will fully automate Aberdeen’s accounts payable processes.

Cloud Invoicing will integrate with Aberdeen’s current eFinancials  accounting system, which Advanced Business also supports. The system automatically detaches PDF invoices sent to a designated email address via the hosted cloud service ,which extracts all of the invoice data. It then converts the information into an eInvoice that eFinancials can interpret and validate before processing payment. No manual intervention is required for this process, according to the installation announcement.

The council’s document management system stores the original PDF invoices and links to the relevant transaction records in the invoice register. This ensures quick and secure online access to images without the need to handle paper, the council and vendor said.

“We anticipate that Advanced Cloud Invoicing will considerably reduce the cost to process a matched invoice through the cloud solution,” noted Garry Stevens, the council’s financial services manager. “Removing the manual administration from our AP function will also enable us to free-up staff time to focus on value-added activities and eliminate human errors and payment inaccuracies.”

The council expects to save £100,000 (US$162,235) per year, according to CBRonline.com.

Proposed changes to government late-payment targets could have significant implications for local authorities, as the UK government in June announced new plans to legally require organizations to publicly publish details of their payment performance to reinforce the Prompt Payment Code. Under the new legislation, payments must be made within 30 days of receiving an invoice.

“Cloud Invoicing will enable us to comfortably achieve government late-payment targets and ensure we are fully prepared for new legislative changes,” Stevens said. “Advanced’s solution will notify us on receipt of a supplier invoice, automatically transfer it into eFinancials and schedule for payment in the space of five minutes where it matches, by fully automating our AP processes.”

Suppliers also have reacted favorably to the switch, Stevens added. “This process has supported positive discussions with our suppliers, helping us to consider discounts from them as we can ensure prompt payment of invoices,” he said. “This will enable us to further invest in improving the Accounts Payable function.”

eInvoicing is gaining momentum among UK governments. Earlier this year, the national government released an inquiry report on eInvoicing that explored how the technology could save the UK public sector money by enabling more efficient procurement and payment processes. Stephen McPartland MP led the report, and said in a statement that by streamlining UK government administrative processes at a stroke, electronic invoicing could save the public sector and its suppliers a minimum of £2 billion per year.

“By enabling government to use its immense purchasing power, eInvoicing could open up new markets throughout the country and help drive innovation and economic growth,” McPartland said.

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