Digital Health

NHS move to e-invoicing: what it means for suppliers

The NHS switch to an intuitive e-invoicing system will reduce payment backlogs and quicken business decisions across the public sector.

Being a supplier to the National Health Service can be painful. Progress take time, from contracts to payment. Once in, however, the NHS can be a customer for life. The good news is that some of this pain is set to diminish in the near future; the UK is finally playing catch-up with the rest of Northern Europe.

To change the game, new legislation is on the way which will force the NHS to accept true e-invoicing in support of the 30 day prompt payment code. It’s great to see that the NHS is acting now rather than waiting. 

Within the new e-procurement strategy is e-invoicing and e-ordering between suppliers and the NHS buyers. The NHS has actually just completed a demonstration of the technology to prove that this is possible.

So, what are the benefits? First and foremost it will free up time and money. The NHS will guarantee payment to suppliers within 30 days (and here’s the catch) of an approved invoice.

The solution appears simple. Switching to PDF via email will alone save the supplier one or two days, right? Unfortunately not. For more NHS buyers, processing a normal PDF takes longer and hits the same barriers to approval as paper.

What they want is a true e-invoice, one that doesn’t need post-processing. A true e-invoice can go straight for approval with 100% accuracy against the e-order. This is real e-invoicing.

This is not new. As the large private sector customers become smarter, they are already asking for the supplier to invoice electronically rather than by paper or PDF. The result is stretching a supplier's Credit Control team and impacting Days Sales Outstanding (DSO) numbers.

What makes the NHS different is the use of open standards and the Pan-European Public Procurement On-Line (PEPPOL) network. One simple open network connection will unlock every NHS trust to the supplier.

More importantly, the supplier will get high quality order data rather than the current mix of paper, fax, email and telephone from the Trusts. Now with the NHS moving towards e-invoicing, it’s the time for the smart supplier to switch to e-invoicing via an open network such as Basware.

By moving to true e-invoicing the benefits to the supplier are clear; removing the barriers to getting paid on time, strengthening key customer relationships, and reaching 100% of customers with one bill delivery solution.

With e-invoicing via an open network, a supplier can target NHS or private sector customers and deliver the right invoice - in the right format - in near real time. With more and more Public Sector bodies across Europe also e-invoice enabled, the sales invoice becomes a competitive sales tool.

The finance team of a smart supplier not only becomes a key part of the sales process, but is one that’s paid on time, with low credit control costs and satisfied customers.

Importantly, with IT resources stretched, switching to e-Invoicing doesn’t require a complex IT project. It can be as easy as printing a traditional PDF. Basware has a basic e-invoicing service offering a web portal, direct e-invoice links and a connection to every e-invoice enabled public sector body in Europe.

The result for the smart supplier is faster business decisions, driven by customer demands and removal of all the barriers to invoice approval and payment.

For the NHS and other public sector companies, the supplier is guaranteed payment in 30 days. Businesses can therefore focus on managing days sales outstanding. E-invoicing simply couldn’t be easier or smarter for the supplier.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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