The Office of Management and Budget (OMB) in the U.S. White House has issued a memorandum announcing the future mandating of electronic invoices for government suppliers by end of fiscal year 2018. Since that announcement, we have seen a new administration take over government in the USA and the UK has started its Brexit negotiation from the European Community.
So how far has the US come in the last six months and is anything likely to change under the Trump administration? There’s plenty the USA could learn from Europe. As one example, the Scottish Government has made electronic invoicing available to all its public bodies and was encouraging electronic invoicing through a central shared service.
An article I wrote recently generated lots of interest within the USA and it should be noted that, while Europe still struggles to implement and come to terms with a myriad of regulations, the USA has a unique opportunity to create a more workable solution that is 1) easier to implement and that 2) encourages organizations to trade electronically.
The question is whether the OMB will mandate electronic invoicing or will this become one of the Obama initiatives that the new administration will quietly remove. After all, President Trump was elected on a mandate to cut waste and make the Government more efficient and transparent (Executive Order 13576).
Another question is whether that will happen at a cost of more regulation by mandating electronic invoicing. If this is what US businesses and the people want, where do they go to find out more about electronic invoicing and its benefits?
The good news is that there has been some momentum in the US. One of the challenges for any national initiative is how to gain acceptance of a policy and help increase business to business (B2B) payment efficiency, and the Federal Reserve recently convened a new work group under the Business Payments Coalition, which is focused on increasing electronic invoicing adoption.
Starting with a clean sheet of paper, the working group is collating and creating a catalog of existing electronic invoicing formats, data elements, standards, and exchange protocols used by US businesses, and will release the catalog through ANSI X9 as a technical report in 2017; this is great news and just the start of a longer-term program needed to educate the US market.
Todd M. Albers is a senior payments consultant at the Federal Reserve Bank of Minneapolis and he chairs the Business Payments Coalition electronic invoicing working group. Interestingly, Todd recently wrote that he believes that it is doubtful the OMB will ever enact a policy that requires businesses to exchange electronic invoices and that it will be down to system vendors, payment service providers, banks and corporations to help drive adoption to increase adoption in the US.
I broadly agree with Todd’s view and this presents us with several major challenges, because although there is a desire to effect change, the US is currently sitting on $19 trillion dollars’ worth of debt and whilst businesses are anxious to grow, they will want to do that without additional cost and bureaucracy.
So how do we make things simple for them? Well, the good news is that (again) the USA can look towards Europe for the answer. The work done by the electronic invoicing working group will provide guidance and sample standards for businesses and providers to reference, which will no doubt help; but perhaps the OMB should consider creating something like the PEPPOL initiative currently in use in Europe?