John Larkin

The implementation of Directive 2014/55/EU on e-invoicing in public procurement creates an obligation on all public sector bodies to be able to receive and process invoices electronically.

The implementation of this directive should not be seen as an end in itself, but an opportunity to streamline AP processes and deliver cost savings and efficiencies in public procurement.

Following compliance, many European public sector bodies have moved to e-invoice adoption and have begun a digital transformation journey to realise the full benefits promised by the directive.

It is important to note that the Procurement team plays a vital role in all stages of an e-invoice implementation project and will hugely influence the take up and time frame for the project.

WHERE DO I START?

Fail to prepare … prepare to fail. Do your homework! Below are some important milestones on the journey to e-invoice adoption:

  1. Firstly, you need to examine the appropriateness of an e-invoicing policy for your organisation and review it in the context of your current business and ICT strategy.
  2. Next, determine the quantity of invoices and the number of suppliers involved and the ability of your current ERP system to handle e-invoices.
  3. How much does it actually cost your organisation to process invoices? The cost can range from €5 to €17 per invoice depending on your sector. Consider how many hours are lost manually entering data in your finance system, seeking payment approvals and chasing missing invoices.
  4. Having carried out an initial review, a business case should then be prepared. Closely examine the likely costs and benefits to the organisation and include a full description of the current paper-based process and identify current processes that can be either improved, outsourced or eliminated.
  5. Choose a pro-active project leader and cross-functional team to prepare a detailed project plan. The team should be made up of executives from Procurement, Finance, IT and Accounts Payable.
  6. The project plan should contain an analysis of the current business processes and environment. Based on this analysis an implementation plan can be outlined.
  7. Based on the analysis carried out on the company’s abilities and needs, a number of solution scenarios will evolve and whether to take a step-by-step or Big Bang approach to implementation.

SUCCESS FACTORS IN E-INVOICE PROJECTS

Awareness and buy-in by senior management is essential to reach the goals set up in the e-invoicing policy, together with one very active project owner and roll-out champion.

Good internal and external communication to people affected is another critical factor for the project to succeed. It is also important to be realistic regarding the mid and long-term technical capabilities of the organisation, including workflow and archiving.

“Fail to prepare … prepare to fail. Do your homework!”

John Larkin is a graduate of Trinity College, Dublin and The Chartered Association of Certified Accounts and is currently Country Manager, Pagero Ireland. John has considerable experience in leading business transformation projects and has seen, at first hand, how successful e-invoice projects have delivered real benefits to various sized organizations. He will outline how an organisation should approach e-invoice adoption and the important role procurement professionals have in delivering the benefits of the EU Directive on e-invoicing in public procurement.

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