Strengthening Controls and Streamlining Financial Processes through Re-designing of System Workflows
Accountant-General's Department

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Before the adoption of electronic invoices (e-invoices), delays in payments to suppliers were common as paper invoices were easily misplaced or lost in transit. Paper invoices could be misplaced when they were routed to different officers for certification or routed to the wrong officer. Suppliers often end up having to issue and deliver the paper invoice again. Late payments adversely affect the cash flows of suppliers, particularly those of small and medium sized enterprises which operate under tight finances. Given that the Singapore Public Service is a major buyer of goods and services in the local market, delay in payments would impact many businesses. Given the large volume of paper invoices sent to over hundreds of government agencies, much effort was required on the part of the finance officers to perform data-entry of invoice details, invoice amount, etc. After which, they have to manually route the paper invoice to approving officers for approval. After payment processing, paper invoices had to be filed and physically stored for a minimum retention period, incurring storage costs. Manual processing of paper invoices was not only prone to human errors, but was also time-consuming on the part of government agencies. Suppliers also have to incur paper and postage cost to send the invoices to various government agencies, and risk having their invoices misplaced in the process.

B. Strategic Approach

 2. What was the solution?
The solution arose from a public service-wide initiative “Public Service 21: Excellence through Continuous Enterprise and Learning (ExCEL)” launched to foster a culture of innovation and enterprise, embracing continuous change, improvement and learning as a way of life within the Singapore Public Service. ExCEL provides a formal framework for public officers to generate ideas bottom-up instead of top-down through schemes such as 1. Staff Suggestion Scheme which gives all public officers an avenue to voice their ideas and see them implemented 2. Work Improvement Team (WITS) Scheme which encourages public officers to get together to improve work processes as teams The e-invoice project was implemented by a WITS team consisting of officers in charge of payment processing. The WITS team members observed an increasing late payment trend across the government agencies and came up with the idea of e-invoice which allows suppliers to bill the hundreds of government agencies within the Singapore Public Service via a common web-portal.

 3. How did the initiative solve the problem and improve people’s lives?
1. Increased Productivity with Automation Besides removing the need to process paper invoices, e-invoice also provided the opportunity for payments processing to be further automated. Previously, invoices had to be manually approved by the relevant officers. With the adoption of e-invoices, invoice with amounts below a certain value are now automatically approved by the payment processing system if e-invoices are successfully matched to procurement documents and goods receipt documents, which are both electronic as well. This saves manpower which can be deployed to other priority areas. 2. Enhanced Service Levels A central online portal has been established as a one-stop destination for suppliers to conveniently bill all public agencies. This e-invoice submission portal allows public agencies to receive invoices quickly and process payments more promptly. In addition, suppliers can check whether their invoices have been paid via the same portal. This provides suppliers with greater convenience and assurance that their invoices are being acted upon. 3. Tightened Controls over Payment Processing With e-invoices, public agencies can now rely on system checks to ensure that invoices are not paid twice or duplicate invoices are not submitted by suppliers. This reduces the risk of double payments by public agencies.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
As the Singapore Public Service makes payments to about 90,000 suppliers, implementation of the e-invoice initiative required close collaboration with suppliers. As payment processing was decentralised across Government, cooperation between internal stakeholders had to be established as well. As such, the initiative was implemented in key phases. Phase 1: Consultation with key suppliers and public agencies was conducted to gather feedback and address concerns from stakeholders. The feedback was a valuable source of input to ensure that the solution was designed and implemented in a way that would increase productivity and cost-efficiency, without introducing inconvenience and additional costs to our stakeholders. Where stakeholders had uncertainties, we encouraged them to come on board this initiative by allaying their concerns. Phase 2: Together with our IT consultants, the e-invoice system was developed after taking into consideration user requirements. User requirements were determined through the feedback gathered from stakeholders. Comprehensive testing was performed to ensure that the e-invoice system was functioning properly before rolling it out. Phase 3: The e-invoice system was completed and rolled out in 2006. At this point in time, only some pilot suppliers were on board the e-invoice initiative. Public agencies continued to process paper invoices. Over the years, paper invoices were phased out and e-invoicing was mandated in 2008. Currently, the Singapore Public Service accepts only e-invoices, with the exception of a small group of suppliers who are unable to submit e-invoices. These include very small suppliers like newspaper vendors and fruit sellers.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
- Private sector companies were engaged to assess if submission of e-invoices was feasible and to understand any concerns that they had. - Government Ministries and Statutory Boards were consulted to ensure that the e-invoice system and processes would be compatible with their IT systems and payment processes. - User requirements of public service officers who process invoices were gathered to ensure that the e-invoice system would be convenient to use and contained the necessary functionalities.
 6. How was the strategy implemented and what resources were mobilized?
Financial Resources: This initiative was implemented with full Government funding. Government funding was approved as the proposal to introduce e-invoices yielded many potential benefits. They include raising productivity, increasing cost-efficiency, tightening controls over payments processing and enhancing our service quality to public stakeholders. Technical Resources: To ensure that adequate IT support was available to during the implementation of the initiative, an external IT consultant was engaged to provide advice and design the e-invoice system. A tender exercise was conducted to compare proposals from various IT consulting firms before the tender was awarded to the firm with the best proposal. With advice from the external IT consultant, the necessary IT infrastructure was prepared to support the new e-invoicing system. Comprehensive testing was performed to ensure that the system would function properly after being rolled out. System interfaces were also established and tested to ensure that different agencies’ IT systems can properly exchange relevant data for the e-invoicing system to work. Human Resources: Management support was vital in getting a pilot group of suppliers to come on board at the initial stages of this e-invoice initiative. Most suppliers had reservations over being the first to move onto the e-invoice platform. Management facilitated for the Government to partner business trade associations to conduct talks and forums so as to reach out to small and medium-sized enterprises. With the collaboration of a small starting group of early adopters, the e-invoice system design was refined. After the new system stabilised, key Government suppliers were encouraged to join the e-invoice initiative. Such major suppliers have established IT systems that could potentially be incompatible with the e-invoice system. It was thus important for the first few key suppliers to successfully join the initiative as they provided the momentum for the rest of the Government suppliers to follow suit. When the majority of Government suppliers were finally on board the e-invoice platform, Management again supported the proposal to mandate the use of e-invoices across the entire Singapore Public Service.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
- Proper communication with stakeholders ensured that we addressed concerns regarding the move towards e-invoices. This allowed us to have a good understanding of stakeholders’ needs and design the e-invoice system around user requirements. - Effective change management ensured that the resistance to change was addressed. Besides proper communications with suppliers, Government ministries and statutory boards, user training and user guides were provided to educate users on the functionalities of the e-invoice system. Comprehensive testing was performed to ensure that the system was functioning correctly before being implemented. - Consistent support from top management was crucial in ensuring that the initiative received sufficient resources. Management’s support was also vital in overcoming some key challenges. For example, Management facilitated for the Government to partner business trade associations to reach out to small and medium-sized enterprises to join as early adopters of the e-invoice system.

 8. What were the most successful outputs and why was the initiative effective?
Consultation Phase: Key suppliers and public agencies were consulted on their views and concerns of the e-invoice initiative. The percentage of suppliers and public agencies consulted was tracked and the gathered feedback was evaluated to understand how the initiative would have to be designed and implemented to meet stakeholders’ needs. Pre-Implementation Testing Phase: Before the new system was rolled out, a comprehensive set of processes covering a wide range of scenarios was performed in a system testing environment to ensure that system functionalities were performing as expected. Regular updates on the percentage of test scenarios covered and the test results were provided to Management to ensure that tests were being carried out according to schedule and any errors encountered were promptly rectified. The new system was only rolled out after successful testing. Post-Implementation Phase: After implementation, the percentage of suppliers that have come on board the e-invoice platform was tracked and regularly updated to Management. Progress assessment was based on the percentage of suppliers on board so far, as well as the number of major suppliers on board. When the majority of suppliers were on board, a mandate was then proposed and subsequently approved to require all public agencies to accept only e-invoices.

 9. What were the main obstacles encountered and how were they overcome?
Encouraging all Government suppliers, from top tier firms with established IT systems to small and medium-sized enterprises that may not be IT savvy, was a challenge. Each group of suppliers presented its own challenge. Major suppliers had established IT systems that might not be compatible with our e-invoice platform, while small medium-sized enterprises might not have the IT literacy to adopt e-invoicing. To overcome this, proper communication with suppliers was key in ensuring that each concern was properly addressed. User education and training also had to be provided to the less IT savvy suppliers. More importantly, a readiness to refine our system to ensure user-friendliness and catering to new requirements was essential to get all suppliers on board. Also, the sheer number of suppliers transacting with the Singapore Public Service meant that engaging all suppliers was a challenge. A key strategy was to start off with a pilot group of suppliers after the e-invoice system was just rolled out, to refine our system during the pilot phase. After refinements, major suppliers were then approached to ensure that our e-invoice system was compatible with their established IT systems. Through such an approach, the common requirements of most suppliers were addressed. Nonetheless, as new suppliers and public agencies come on board the e-invoice system as time goes by, we will constantly receive enquiries and feedback. As a long-term measure, a customer service portal was set up to allow suppliers and public agencies to log issues.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
Public Service as a Driving Force for IT Adoption: The implementation of e-invoicing provided opportunities for payments processing within the Singapore Public Service to be further automated, streamlining processes and raising productivity within the public service. There are still opportunities to automate processes today, 6 years after e-invoicing was mandated. For example, a recent online attachment feature was introduced to allow invoice supporting documents to be scanned and attached to e-invoices. Greater productivity allows resources to be focused on other areas and deliver additional public services. The Singapore Public Service, as key consumer of goods and services within the local market transacting with over 90,000 suppliers, is in a strategic location to drive national initiatives. By encouraging and eventually mandating e-invoicing for public agencies, businesses in Singapore have been pushed to adopt IT services. This has positive externalities in terms of encouraging the Singapore public to embrace information technology, levelling up the overall IT literacy level. Enhanced Service Quality: With e-invoicing, payments can be made more promptly as misplacement of paper invoices or invoices lost during transit is no longer a concern. In addition, public agencies will be able to receive invoices from suppliers quicker and process payments earlier. For example, mailing of paper invoices requires 1 or 2 working days to be delivered to public agencies for processing. With e-invoicing, invoices can be submitted instantaneously. Suppliers can also promptly check the processing status of their invoices via the e-invoice online portal. For example, suppliers might have to previously wait for days or weeks to receive payment advices after their invoices have been paid. With e-invoicing, invoice statuses are immediately updated once invoices have been paid. Cost Savings and Environmental Conservation: Suppliers can save on printing and postage costs with the use of e-invoices. This is especially given that most invoices are now system-generated. Furthermore, a reduction in printouts helps to reduce paper consumption and conserves the environment. E-invoicing also allows public agencies to do away with filing of paper invoices, allowing us to reduce document storage costs.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
The initiative is sustainable as it was just a first step towards further automation of procurement and payment processing within the Singapore Public Service. E-invoicing laid the groundwork for further automations. Since the e-invoice initiative was implemented, procurement and goods receipt documents have similarly been converted to electronic modes, which has allowed for automations such as auto-approval and processing of e-invoices. As computer intelligence becomes more advanced and more documents are converted into digital formats, the potential for more automation opportunities stemming from this initiative grows. As elaborated above in Point 10, this initiative helps to reduce postage needs and printouts, which translate into less paper consumption. This contributes to environmental sustainability. Since invoicing is a common need across international Governmental bodies and private sectors, this initiative is transferable, as long as proper coordination and willingness to leverage on the benefits of information technology are present.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Public agencies should leverage on technology to improve service standards and convenience to the public. Leveraging on technology can also lead to productivity gains and cost savings, which will allow for resources to be diverted to other areas and generate more benefits for the public. With sufficient brainstorming and analysis, many common public service functions can be and should be automated and standardised for greater efficiency. When evaluating a proposal to automate processes, assessment should not just focus on the immediate benefits but also the potential long term benefits that could be reaped, as illustrated in our e-invoice initiative, which has come a long way and still continues to yield new potential benefits. Change and project management is crucial in ensuring the initiatives are successfully implemented. Stakeholders should be properly consulted to ensure their needs and concerns are met. Pilot phases allow testing and refinements before mass rollout to all users. Importantly, effective communication should be maintained with stakeholders throughout the entire process to inform of any changes that may have an impact on them. At each stage of the initiative, adequate channels should be established through which users can seek assistance. Lastly, the significance of the role that public agencies can play in pushing stakeholders to adopt new technologies should not be underestimated. Through leading by example and encouraging stakeholders to make changes together, public agencies can provide much needed impetus on a society-wide level.

Contact Information

Institution Name:   Accountant-General's Department
Institution Type:   Government Agency  
Contact Person:   Mei Ping Teo
Title:   Assistant Manager  
Telephone/ Fax:   (65) 6332 7648
Institution's / Project's Website:  
Address:   100 High Street #06-01 The Treasury
Postal Code:   S179434
City:   Singapore
State/Province:   Singapore

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