Skip to main content

Posted on 28th March 2024


Back in 2015, the UK Government announced a number of initiatives due to be rolled out in April 2019, aligned to the new European Standard on e-invoicing.  With the announcement, Stephen McPartland MP, shared that, “Electronic invoicing could save the public sector and its suppliers a minimum of £2 billion per annum, by streamlining UK government administrative processes at a stroke. By enabling government to use its immense purchasing power, e-invoicing could open up new markets throughout the country and help drive innovation and economic growth.”

Now, with the deadline for implementation of the new standard fast approaching and driven by the need to encourage cost savings, improve efficiency, shorten VAT gaps and embrace new digital ways of working, e-Invoicing means that the public sector will have to adapt it's ways of working to keep up with the digital momentum in its financial operations.

What does this mean for the Public Sector?

Public sector entities in Europe and in the UK (replicated) post-Brexit must be able to receive e-Invoices from their suppliers.

The European Directive on value-added tax (Directive 2010/45/EC) defines an electronic invoice as follows: “An invoice that contains the information required in this Directive, and which has been issued and received in any electronic format.” The European Directive on electronic invoicing in public procurement (Directive 2014/55/ EU) defines an electronic invoice as: “An invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing.”

Since the announcement of the new directive, public sector organisations across the UK and Europe are adopting e-invoicing to be prepared for the change with varying results. Different suppliers will have varying formats to submit their invoices electronically. The vast majority will attach a pdf and send their invoice via email, others will have integrated software that talk to each other, some will have internal cross charges, some will need to be translated, and some may just be a little slow to embrace the technology. Add to that the complex requirements of the public sector, such as multiple business units, international payments, differing company structures, and different reporting requirements for trusts and charities, the challenge to be ready for the deadline increases.

HMRC also has very specific guidance around acceptable invoices that can be processed digitally from suppliers. A receiver of e-invoices needs to agree how they will receive the invoices with their suppliers in advance of receipt, must ensure that they have all of the VAT relevant information provided, and must be able to store any e-invoices received digitally and securely.

Why embrace E-invoicing?

It’s a sign of the times, millions of people already pay their bills, manage their banking, and handle their day-to day finance digitally. The finance industry has seen huge levels of digital investment and disruption to keep up with the changing landscape. This latest development is a natural progression from all this digital advancement.

Estimates shared with the new directive estimated that organisations who embrace e-Invoicing can save a minimum of 1-2% of turnover by replacing paper invoices with electronic invoices and optimising their supply chains. In 2014, the average cost of processing a paper invoice in the public sector was £13.98 compared to £4.77 when processed digitally.

UK specific legislation has also driven the adoption for wider industries, creating requirements for businesses and organisations to embrace digital finance management. For example, the latest HMRC initiative ‘Making Tax Digital’ requires that organisations keep all of their records and submit their VAT tax returns digitally to HMRC, effectively making e-Invoicing a compliance requirement.

E-invoicing can also reduce errors and duplications, improve payment times, provide greater visibility of spend and mitigates opportunities for fraud. Hosting the platform in the cloud can also help maximise the cost savings and efficiencies gained from making the changes in support of the new directive.

To support all this digital change, organisations are looking at solutions to support e-invoicing, Making Tax Digital, and other purpose- built platforms recognising that these will play a key role role in reducing the impact on their operational teams so as not to mitigate the benefits gained from making the change.

The latest evolution of Integra, Integra Centros cloud- hosted by Microsoft Azure, has advanced workflows to support ‘Purchase-to Pay’ e- invoicing and procurement with mobile approval functionality. The future- proofed platform, also has a custom- built ‘Making Tax Digital’ module which fully integrates with the platform building automations and enhanced user experiences as it adapts to your core finance management modules.

To talk more about how Integra Centros can support your e-invoicing requirements contact us and request a demo.

Share this page: View all news articles