E-Invoicing: A win-win for Providers and Commissioners

Author: John McLoughlinDate: 3 years 11 months Ago

Heard the one about a Provider not being paid on time by a Commissioner?

Heard the one about not receiving a contracted payment on 15th of the Month?

Heard the one about the amount of time spent ringing NHS SBS or Commissioners to establish whether an invoice is received or going to be paid?

Heard the one about an invoice not making it onto the Commissioner’s system on time or indeed being incorrectly scanned and thus payment being delayed or not right?

The questions could go on and if this sounds familiar, and as Richard has previously blogged, there is a better way!

Imagine the way where invoices are submitted electronically and received the very next day with no scanning errors. Well, that doesn’t just have to be an imagination. Since 2014, NHS SBS have partnered with  to bring about an efficient and free e-invoicing solution. Since then the benefits of submitting invoices electronically through  can be easily identified, including:

And the stats back it up too, with invoices submitted electronically being paid significantly quicker than those submitted by paper. Not only that, but   is PEPPOL compliant, which to the none technologically minded like myself, means that it can talk to other e-invoicing solutions and thus any supplier, whether intra-NHS or extra-NHS, can use   or another e-invoicing solution to better manage its transactions.

So, why has the take up been so slow across the NHS and how can we all work together to promote best practice and efficient transaction processing, whilst SAVING THE NHS £MILLIONS! For Providers who are not an SBS client, the % of number of invoices submitted electronically was only 2% in April 2015. Hardly surprising as this was a new partnership in 2014. And to 31 March 2017, we have seen some growth with about 25% of invoices NHS England receives from Providers now being received electronically. We’ve also included the requirement, that wherever practically possible, providers should submit invoices electronically in the standard contract.

What though is surprising is the number of Providers who continue to submit a paper invoice. The below table shows an analysis of the range to which NHS Trusts submit invoices electronically. It looks like 41 providers are moving towards fully using e-invoicing, with a few potentially seeing if its for them. But, there are over 125 providers who have not submitted a single e-invoice to NHS England.

% Electronic Invoice 90-100% 50-90% >50% 0%
Number of Providers 41 14 12 125

Let’s give that a bit more context. NHS England received almost 8,000 invoices from NHS Providers electronically totalling almost £4bn in 2016/17. Contrast this to the 27,000 invoices received via the post and scanned by NHS SBS, totalling £10bn. And this is only a small part of the intra-NHS transactions, with the majority being between Providers and CCGs. I hope to be able to provide the overall commissioning picture in a subsequent blog as only had NHS England statistics to hand. It’s also unclear whether those that have only partially used e-invoicing is due to a timing difference in the setup, although for a number of providers it would appear that there may be a mix between e-invoice and paper.

From time perspective alone, a paper invoice takes about 10 days to be received by a Commissioner from a Provider. An electronic invoice is received within 24 hours. The feature picture is a great illustration of the reduction in the number of touch points required to receive an electronic invoice compared to a paper invoice. In fact, looking at this picture, the whole notion of sending a paper invoice seems nonsensical! We’re creating something electronically, to put it into a paper format, to send to someone who receives a piece of paper and then scans it to get an electronic invoice! 

I’ve focused here so far on the benefits with no real talk about cost. But, let’s turn to that now. Converting invoicing from paper to electronic across the NHS has the potential to reduce transaction costs by £millions a year. In principle it is already agreed that the transaction cost of Commissioners/Providers receiving and processing electronic invoices will be significantly less than those to process the same invoice by paper. We know that across all NHS Commissioners there is circa 3 million invoices processed a year, with the majority through paper transactions. Imagine the potential cost saving even if an e-invoice cost £1 less than a paper invoice, it'd be £3m a year! Then, consider the reduction in costs of printing and posting for Providers and there is yet more cost saving. Not only that, but it significantly reduces the administrative burden and cost of calling NHS SBS to establish whether an invoice has been received and then when it is going to be paid.

So, where’s the catch, what’s it going to cost. Well, it’s not. There is no cost to register with  or submit invoices. In fact there are also 2 easy recommended ways to do so, from typing invoices into the system and attaching a copy to integrating your finance system to automatically submit invoices electronically to . The latter being the most efficient and recommended with   already being able to support hundreds if not thousands of different IT systems. Full integration is by far the most advantageous and free, except for your IT/finance staff time to set up the integration, which should be minimal and will recoup its outlay in terms of time and cost through the efficient and cheaper way of submitting invoices. 

I hope I’ve gone some way to convincing those of you who have read this that this is the way forward and I encourage you all to work with your Provider and Commissioner to move to Electronic Invoicing. As a starter the attached is a great start to being able to move to electronic invoicing: https://www.sbs.nhs.uk/media/6204/Tradeshift-Supplier-Training-Guide/pdf/New_Supplier_Training_Guide1.pdf. Further, if you wish to discuss full integration options, NHS SBS are more than happy to help and can be contacted at SBS-W.e-invoicingqueries@nhs.net. If anyone would like to discuss any of this with me then I am more than happy to be contacted at john.mcloughlin1@nhs.net. Further, if you’ve implemented e-invoicing and want to provide feedback or help drive this initiative forward please also contact me.

Please, if you’ve read this far, can I encourage you to spread the word and together we can help drive the following equation: