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Electronic-Invoice Initiative
Accountant-General's Department
Singapore

The Problem

In the past, paper invoices were the prevalent mode of billing. Being a paper transaction, there were much inefficiencies and manual processing required of the Government agencies and suppliers. The shortcomings in such a paper process are illustrated in subsequent paragraphs.

With paper invoices, a supplier has to incur postage and printing cost when issuing the paper invoice. Once it is issued and dispatched, the supplier will not be able to know the payment status of the invoice unless he separately contacts his client agency to enquire on the status.

At the receiving end, the Government agency will first have to wait for two to three working days for the paper invoice to reach it via post. Once received, the agency will need to manually dispatch the paper invoices to multiple parties involved in the procurement and payment process for follow-up actions. There is a sizeable risk of invoices being misplaced in the process which will result in delays in payments.

During payment processing, details of the paper invoices will have to be entered manually into the financial system. Besides the manual effort involved, there is also risk of data entry errors, especially if the volume is high.

In addition, storage of paper invoices for proper audit records takes up sizeable physical office space and efforts in filing. Tracing of paper invoices is also a chore as invoices comes in different formats and the process is time-consuming.

Solution and Key Benefits

 What is the initiative about? (the solution)
Electronic-invoicing has been successfully implemented as the de-facto mode of billing by all suppliers providing goods and services to over 450 Government agencies. It is estimated that over 800,000 electronic invoices will be received by the Government per year.

Besides being an efficient and environmentally-friendly billing process, the move to a paperless mode of billing positions Government as an effective and efficient business partner to the business community. Most importantly, it helps suppliers in managing their cash flow by ensuring prompt payment to them. The benefits to suppliers are as follows:

1) Improved timeliness of payment. In view of today’s economic climate, this becomes increasingly important for vendors’ cash flow.

2) Monetary savings by the business community of over $2 million in terms of printing, postage and processing cost (research shows that it costs about $2.65 for suppliers to issue a paper invoice);

3) Convenience to suppliers in submitting their invoices and checking their payment status:
- Anytime, anywhere;
- One password, many e-services;
- One-stop, many clients

4) Transparency
- Suppliers are able to check the status of their invoices and payments through an online self-help tracking system.

5) Efficiency in submission and delivery
- E-invoicing minimises data-entry efforts as most details are automatically retrieved from purchase orders;
- Reduced risk of paper invoices being misplaced;
- Fast ‘delivery’ of invoices electronically

Besides the wide range of benefits to suppliers, electronic-invoicing transforms the way Government agencies work, and addresses the common challenges faced in their day-to-day activities. The benefits to Government agencies are as follows:

1) Manpower savings due to automated processing of invoices;

2) Improved turnaround time for invoice and payment processing;

3) Tightened control with validation rules in-built into the financial system;

4) Reduced storage cost of paper invoices;

5) Easy retrieval of invoice and payment records as invoice data and processing trails are stored electronically in the financial system; and

6) Better document control as misplacement of paper invoices is eliminated.

Finally on a national level, this electronic initiative has raised the e-readiness of the nation’s business community, especially that of the small and medium enterprises.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
This solution was initiated by the Accountant-General’s Department. The department owns the Civil Service wide financial system and handles all the payment of the Government agencies. The e-invoicing system was designed by the department and feedback was gathered from Government agencies and suppliers to fine-tune the design and processes.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
Due to the extensive scale of the project, we have adopted a phased approach in the engagement of suppliers and Government agencies.

This initiative requires the participation from all suppliers. Hence, supplier buy-in is very important. Our strategy on supplier engagement was based largely on the 80-20 rule. In the initial phase, we focused on addressing the needs and obtaining the buy-in from the larger suppliers who contributed to the majority of the regular transactions. Forums like focus group discussions and workshops were held to provide continual training and feedback loop. A close working relationship has in the process been developed with the pioneer batch of suppliers who then served as partners and service ambassadors of our initiative in the later phases. Awareness of electronic invoicing at the national-level was also boosted through media publicity and roadshows. A series of media publicity in the daily newspapers [Straits Times(ST), Business Times(BT), Lian He Zao Bao (LHZB) and TODAY] and television [Channel U] was launched as listed below:
- ST: Government e-invoice system kicks in from May 1 (30 Apr 08)
- BT: Government e-invoice system starts May 1 (30 Apr 08)
- LHZB: Suppliers to e-invoice the Government (1 May 08)
- BT: Going paperless with electronic invoicing (15 Jul 08)
- LHZB: From Nov 1 onwards, all statutory boards and schools will only accept electronic invoices (16 Oct 08, SME Special, Pg 27)
- Channel U: E-invoice (31 Oct 08, Money Week)
- ST: All Government suppliers move to online billing (1 Nov 08, Money, Pg C21)
- BT: Suppliers to submit e-Invoices (1 Nov 08, Singapore News, Pg 17)
- TODAY: Bringing it online to save costs (12 Nov 08, Business, Pg B8)

In engaging the Government agencies on the other hand, we adopted a hybrid of top-down and bottom-up strategy. In the initial phases, requirement gathering, change management and training was done via a bottoms-up approach. Both e-learning and physical classroom training sessions were held continually to ensure user competency in the e-invoice processes. Towards the last phase, a top-down approach was taken in the form of an internal circular issued to the senior management of all Government agencies on the implementation of the e-invoice initiative.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
Phase 1: E-invoicing for large suppliers
Phase 1a: System Development
Jan 2005- Conducted focus group discussions with top suppliers and Government agencies

Mar 2005- System development

Mid – late 2005- Performed testing with top suppliers and fine-tuning of system design

Phase 1b: Change Management
Mid – late 2005- Conducted trainings to Government agencies

Phase 1c: System Implementation
Dec 2005- Roll-out system for large suppliers as a pilot phase

Phase 2: E-invoicing for other suppliers
Phase 2a: Portal Development
Jan 2006- Solicited feedback from other regular suppliers

Feb 2006- Development of internet Vendors@Gov portal for suppliers

Phase 2b: Change Management
Mid 2006- Development of training materials, including user guides and FAQs.
- Newsletters to suppliers

Late 2006- Training sessions to other regular suppliers

Phase 2c: System Implementation
Nov 2006- Launch internet Vendors@Gov portal as an opt-in platform to all suppliers

Phase 2d: System Improvements
2007- Refine system for greater user friendliness

Phase 3: Increasing Awareness and Adoption
Phase 3a: Targeted invitations to regular suppliers
2007- Conduct regular roadshows and training to suppliers

Phase 3b: Launch at a national-level
Apr - Nov 2008- Issue a series of media release
Nov 2008- Extended e-invoicing to all suppliers

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The greatest challenge was to obtain buy-in from ten of thousands of suppliers. Rigorous change management strategies and tools had to be put in place to address any of their concerns.

The measures taken to overcome the above-mentioned challenges include:

1) A phased implementation approach to provide sufficient lead time for suppliers and Government agencies to prepare themselves;

2) Multiple training sessions conducted to ensure clarity and to improve stakeholders’ familiarity with the initiative;

3) Focus group discussions with major stakeholders held to ensure that their needs are addressed and catered for. In addition, any implementation issues faced by suppliers and Government agencies are given immediate attention and support;

4) User guides provided in multi-languages to address the needs of diverse suppliers.

Through a separate initiative, the Government also provides grants and trainings to SMEs (small and medium enterprises), so as to assist them to procure the necessary hardware and software, and to acquire the skillset required to adopt Infocomm technology.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
A five-man project team was set-up to see through the implementation of the initiative. The team worked very closely with the IT application support team, Government agencies and suppliers to ensure that the diverse requirements of the various stakeholders are catered for. The various parties are actively involved in the whole implementation cycle, starting from requirement gathering to system development and testing, as well as user education and support and performance monitoring after the system has been rolled-out.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
This initiative started off at the ministry-level; but has since been extended to the whole of public service, which includes a total of 450+ ministries, statutory boards and schools. In other words, Vendors@Gov (www.vendors.gov.sg) is the single window for suppliers to reach out to all the Government agencies.

Although this e-invoice facility can also be used by overseas suppliers who are invoicing the Singapore Government, it has yet to be widely publicised at the international level. This will be taken up in the next phase of the initiative.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
Whole-of-Government projects like this require all Government agencies to integrate themselves and to act as a cohesive whole to the public. Hence, the initial time spent to obtain buy-in and cooperation internally within the Government is extremely important.

On the other hand, it is crucial to reach-out to the business community proactively and continually as their buy-in will come naturally if they understand the direct benefits that they stand to enjoy by participating in this initiative. A phased implementation also allowed the suppliers who are more ready to start-off and benefit from the initiative. This allows us to focus the attention on the right target group and provided more time for the other suppliers to transit to the new arrangement. A post-mortem review of the initiative showed that the public communication roadmap developed by the project team was a major contributing factor to the success of the project.

Finally and most importantly, continual change management has to be in place for all stakeholders. Besides relying on suppliers to self-help by downloading user guides and FAQs from the Vendors@Gov portal, monthly training sessions are conducted and newsletters are proactively disseminated to ensure that suppliers are constantly updated on the developments.

Contact Information

Institution Name:   Accountant-General's Department
Institution Type:   Government Agency  
Contact Person:   Ivy Lim
Title:   Director (Financial Administration & Control)  
Telephone/ Fax:   63327649
Institution's / Project's Website:   63327678
E-mail:   ivy_lim@agd.gov.sg  
Address:   100 High Street, The Treasury, #06-01
Postal Code:   179434
City:   Singapore
State/Province:   Singapore
Country:   Singapore

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