Why e-invoicing is the future

Shabaz is Managing Director of Pelican Buying - a procurement specialist that has been negotiating the best pricing and service from food and non-food suppliers on behalf of its customers for over 21 years. By using Pelican’s total collective purchasing volume of £140m, it is able to negotiate highly competitive trading arrangements with local and national suppliers, passing on substantial savings to all its members.

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It is not often that I hear news of a new directive from the European Commission that I can get excited about. Frequently, new rules from the EU are loaded with lots of administration or additional layers of red tape that seem more of burden than a benefit. But talking with legal expert Paul Henty recently, he told me of a new legislation that is set to come into force by 2016, affecting the way in which invoicing is managed in contracts governed by EU procurement directives.

In summary, the European Commission has published a draft directive for the creation of a ‘standardised e-invoicing system’. What this means is that public sector bodies will stop receiving paper invoices and instead receive electronic invoices. It is also part of a wider movement to create fully digital public procurement processes by 2020.

This takes all paper-based invoicing ‘into the cloud’ meaning that at any time, anyone authorised within your school will be able to get instant access to all invoices, without them having to be manually printed and passed from pillar to post.

From what we have read, this directive will be mandatory for public sector organisations but to me this approach could work just as well whether you’re operating in a public or privately-run school. In my eyes, this is real progress and is one of the few EU regulations that I welcome.

Having seen how many schools currently manage their hundreds of supplier invoices, I can see great efficiencies for all involved in the supply chain. It would mean school staff can spend more time on more pressing tasks than simply chasing suppliers for copy invoices or credits.

What can schools do to keep one step ahead?

It may be advantageous to start looking into the range of systems, which are already available on the market that support e-invoicing. There are a number of systems available today that not only capture supplier invoices electronically, but also enable you to undertake greater analysis on the resulting data. For example, using the invoice data information it can automatically update stock control lists, or log the information against pre-determined budgets, meaning at any time you can visibly track your budget without fussing with spreadsheets.

You can set budgets of each cost centre and the invoices are automatically allocated to that cost centre. It can then graph how your expenditure compares to your budget; and you don’t even have to enter any values – it does this for you automatically. If you wanted to place an order with your supplier, the system knows what you have purchased and allows you to enter quantities and you can email this to your supplier. In fact, the list of automated management information and tools are almost endless, especially with outputting to graphs and charts making annual reporting easier to compute.

Fundamentally, this level of analysis and budget tracking can only help towards supporting schools in not only keeping track of invoices but in taking greater control of their overall procurement management. So, perhaps the bureaucrats deserve a pat on the back this time around.