Introduction of Electronic Invoicing in Public Procurement

Closed 24 Oct 2018

Opened 1 Aug 2018

Feedback Updated 16 Nov 2018

We Asked

We asked for views on the introduction of electronic invoicing to the Scottish public sector and held a public consultation which was open for 12 weeks from 1st August 2018.

You Said

In total 21 responses to the consultation were received: 13 from local authorities; 1 from NHS; 2 from central government; 2 from trade organisations; 2 from suppliers; and 1 from an individual.

All bar one respondent agreed that the introduction of eInvoicing was a positive step and 80% of respondents highlighted some procedural barriers or challenges in the implementation of eInvoicing.

We Did

All responses have been fully considered and all non-confidential responses received have been published. The EU Directive 2014/55/EU on Electronic Invoicing in Public Procurement will be implemented through amendment to the Public Contracts (Scotland) Regulations and will come into force 18 April 2019.

Results Updated 14 Nov 2018

Background:

The European Directive 2014/55/EU on Electronic Invoicing in Public Procurement was published in the Official Journal of the European Union (OJEU) on 26 May 2014. Transposition of the Directive will be through amendment to the Public Contracts (Scotland) Regulations 2015.

The aim of the Directive is to ensure that Scottish public bodies are in a position to automatically receive and process electronic invoices (eInvoices) from suppliers for all contracts regulated by the European Public Procurement Directives.  However, it is widely recognised that eInvoicing is an efficient and time saving process for both public bodies and suppliers, so where deemed appropriate and benefits have been identified, non-OJEU contracts and their incumbent suppliers will have the opportunity to send eInvoices.  

Central contracting  authorities (that are named in Schedule 1 of the Public Contract (Scotland) Regulations 2015) must comply with the Directive no later than 18 April 2019.  All other sub-central contracting authorities will have a further twelve months to comply with the Directive (no later than 18 April 2020).

The Scottish Government is providing eInvoicing capability through the national purchase-to-pay (P2P) platform, PECOS, which is available to all Scottish public bodies. The overall cost (other than any interfaces that may be required between PECOS and finance systems) is currently being funded by the Scottish Government.

To date there are 17 public bodies using the Scottish Government eInvoicing solution and over 412,000 invoices have been captured delivering approximately £5.4 million of transactional efficiency savings.

The Scottish Government continues to promote and roll out the eInvoicing solution and has engaged with all Scottish public bodies and appropriate national and sector suppliers.

The Consultation:

The consultation on the Introduction of Electronic Invoicing in Public Procurement ran from 1 August to 24 October 2018 and asked interested stakeholders if they thought it would be a good idea to introduce eInvoicing in the public procurement process and if there would be any barriers or challenges that could potentially hinder implementation. 

In total, 21 responses to the consultation were received:

  • 13 from local authorities;
  • 1 from NHS;
  • 2 from central government;
  • 2 from trade organisations;
  • 2 from suppliers; and
  • 1 from an individual.

Consultation Questions and Responses:

Question 1: Do you agree that the introduction of eInvoicing is a positive step in the public procurement process?

All respondents, apart from one, agreed that the introduction of eInvoicing was a positive step.  One suggestion received was that eInvoicing should only be used when it’s a proven efficiency, i.e., for high volume, low value transactions.

Question 2: Do you foresee any barriers or challenges to implementing eInvoicing in the public procurement process? 

A large majority of respondents (80%) indicated that they would encounter some challenges when implementing eInvoicing. The common challenges identified were:

  • Reviewing internal purchase-to-pay (P2P) and invoicing processes;
  • Supplier onboarding;
  • Internal resource;
  • Technical capability of suppliers and public bodies;
  • Suppliers potentially having to support multiple eInvoicing solutions;
  • Cyber security; and
  • Smaller public bodies lacking P2P capability.

However, the remaining 20% of respondents accepted that the implementation of eInvoicing would make it much easier to do business with, as well as facilitate more efficient payment processes to suppliers (including SMEs) which would bring cost savings and liquidity benefits.  

Conclusion:

The overall response to the consultation was positive. 

As a result, the Scottish Government will proceed with the implementation of European Directive 2014/55/EU on Electronic Invoicing in Public Procurement through amendment to the Public Contracts (Scotland) Regulations 2015.

Published Responses

View submitted responses where consent has been given to publish the response.

Overview

This consultation document describes, and seeks views on, the Scottish Government’s plan to implement a change to the public procurement rules in Scotland.  While the specific nature of Brexit arrangements may impact on obligations to implement this Directive, the Scottish Government is consulting on its implementation based on the business efficiencies and benefits eInvoicing is expected to provide to public sector bodies and suppliers. 

The change being introduced by the Directive will be implemented by 18 April 2019 through amendment to the Public Contracts (Scotland) Regulations 2015.

Why We Are Consulting

It is generally accepted that the implementation of eInvoicing will make it much easier to do business with, as well as facilitate more efficient payment processes to suppliers, including SME’s, which in turn will bring cost savings and liquidity benefits.

Some of the benefits of introducing eInvoicing to the public procurement process would include reduced costs, increased accuracy and processing efficiencies, faster processing and payment cycles, improved controls and compliance, increased visibility and transparency, focus on higher value activities and  improved customer satisfaction.

Although in depth stakeholder engagement has taken place and is continuing, this consultation is formally seeking views and comments from a broad range of stakeholders (including public bodies and suppliers) that the introduction of eInvoicing would be a positive and progressive step for the Scottish public sector.  

View the full consultation paper here

Audiences

  • People of Scotland

Interests

  • Building and Planning
  • Communities and Third Sector
  • Digital
  • Economy
  • Public Sector