E-Invoicing in Local Government Report

Survey Partner:
E–Invoicing in Local Government
Survey Report 2016
Invoice
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Contents
The Survey 3
Survey Methodology and Respondents Profile 4
Key Findings 5
Conclusion 14
Appendix 1: Full Survey Questions 15
Appendix 2: Participating Organisations 21
Acknowledgements
The survey team at iGov Survey would like to take this opportunity to thank all of those who were kind enough to take part and to those who
found the time to offer additional insight through their extra comments. We would also like to thank our partner, Basware, for their assistance in
compiling the survey questions, scrutinising the responses and analysing the results.
E-Invoicing in Local Government 2016 © is copyright iGov Survey. Unless explicitly stated otherwise, all rights including those in copyright in
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To contact the iGov Survey team:

Email: dcross@ingenium-ids.org Tel: 0845 094 8567
Address: FAO David Cross, Ingenium IDS Ltd, Mansion House, Wellington Road South, Stockport, Cheshire, SK1 3UA
Page 2 of 22 E-Invoicing in Local Government 2016

The Survey
The importance of adopting a good, clear e-invoicing strategy is fast growing in

recognition across the public sector. In 2014, the European Commission committed to
producing a standard e-invoicing directive and adopting it as law by May 2017, as a
means of tackling the many various formats of e-invoicing that make the process
unnecessarily complex and costly for many organisations.
As the UK prepares for its exit from the European Union, the priority of e-invoicing is no
less significant. Not only will UK public bodies still be required to comply with e-invoicing
legislation for as long as the UK is a EU member state, but the UK government is also now
looking to develop its own set of standards.
In 2015, iGov worked closely with our survey partner, e-invoicing specialists Basware, to
examine the way in which the public sector organisations across Local Government,
Housing and Emergency Services were approaching e-invoicing.
The research was supported by the Department for Business, Innovation and Skills (now
the Department for Business, Energy and Industrial Strategy), the Local Government
Association, and the UK National e-Invoicing Forum.
It found that the vast majority of participants (74%) felt that adopting e-invoicing was a
good way of improving the number of payments made on time, and a further 61% saw it
as a way of increasing visibility of the workflow process. However, many also stated that
a lack of resources (40%) and difficulties gaining supplier adoption (30%) were significant
barriers to increased adoption.
With this in mind, iGov and Basware have once again conducted research into the
current state of e-invoicing across Local Government, Housing Associations and the
Emergency Services. We examined the progress organisations had made in adoption of
e-invoicing methods across the sector, with a particular focus on:
• the impact and improvements organisations have seen as a result of e-invoicing;

• the approaches and methods they are currently using; and
• the challenges and barriers they are now facing as they look towards continuing to
widely adopt e-invoicing. 

Survey Methodology and
Respondents Profile
This survey was conducted online by iGov Survey in collaboration with Basware. The
project ran from Thursday 23rd June 2016 to Friday 19th August 2016.
Survey respondents represented a broad cross-section of roles across Local Government,

Housing Associations, and the Emergency Services. This included: Finance Management,
Chief Executive/Deputy, Business Development, Procurement, Purchasing, Strategy, IT
Management, Payroll, Operations, E-Government, Planning, and Service Delivery.
140 individuals from 129 unique organisations participated in the survey, each of whom
will have received a complimentary copy of the findings report. There was no
inducement to take part in the survey, and Basware was not introduced as the survey
partner.
The results displayed through this report are based on those who fully completed the
questionnaire and are displayed as a percentage of this group, unless explicitly stated
otherwise.
Figure 1: Breakdown of Respondents by Job Role (%)
Job Role Percent
Chief Executive/Deputy 6%
Finance Management 44%
IT Management 8%
Procurement/Purchasing 24%
Other 26%
5%
7% Figure 2: Sector Breakdown (%)
Local Government
Housing Associations
30% Fire and Rescue
58% Police

Key Findings
Almost two-thirds of survey respondents believe that
e-invoicing methods provide a cost-effective way of
increasing efficiency within their organisation (64%),
and improve the time within which invoices are
processed (61%)
A further third (31%) state that e-invoicing methods allow for an effective method of
monitoring any possible fraudulent activity across their organisation, whilst 24% believe
that the benefits provided by e-invoicing are also considered a top priority.
Figure 3: How is the use of e-invoicing viewed within your organisation? Please tick all that apply.
Provides a cost-effective way to

increase efficiency
Improves the time within which

invoices are processed
Effective method of monitoring

possible fraudulent activity
The benefits available with e-

invoicing making it a top priority
Though benefits are understood,

it is not considered a top priority
Other
0% 14% 28% 42% 56% 70%
While it is positive that many organisations understand the perceived benefits of e-

invoicing, it is worth noting that over a third (35%) state that, despite the benefits, it is not
considered a top priority within their organisation.

The use of PDF email invoicing has increased in the
past year, up to 86% from 63% in 2015
It is interesting that while PDF email invoicing was ranked as the most commonly used
method of invoicing last year, there has been a significant rise in the proportion of
respondents using this approach, up 23 per cent since 2015. Moreover, there has been a
substantial drop in the proportion of participants still using traditional invoice finance
(supply chain finance), down 19 per cent from 33% to 14% this year. 
Figure 4: Which of the following invoicing approaches does your organisation currently use? Please tick all
that apply.
2015 Results 2016 Results
Paper invoices*
PDF email invoicing
Document imaging or OCR
Outsourced scan and capture
Imaging and approval workflow

technology
Supplier portal or online invoices
Prepaid cards for personal budgets
P-Cards
Dynamic discounting solutions
Traditional invoice finance (supply

chain finance)
Other
0% 25% 50% 75% 100%
*Please note that ‘paper invoices’ was not given as an option in 2015’s research

Though there has been a marginal drop over the past year in the number of participants
using document imaging or optical character recognition (OCR), it is still a widely used
approach by just under half of those surveyed (46%). This slight difference was also
recorded for imaging and approval workflow technology, supplier portal or online
invoices, and P-Cards.
Encouragingly, as the use of PDF email invoicing increases, 66% of participants also tell
us that they currently have a system in place to recognise fraudulent invoices or
malware/ransomware as email attachments. However, it is a cause for concern that
over a quarter (27%) are unaware of this, suggesting a greater emphasis on the security
of PDF email invoicing may be required.
Figure 5: Do you have a system in place to recognise fraudulent

invoices or malware/ransomware as email attachments?
27%
Yes
No
Don't know
7%
66%

Almost three-quarters of participants (72%) are still
printing and scanning PDF invoices
It is surprising to see so many participants still using this method given that it is an
inefficient and resource heavy method of invoicing, and is in conflict with the emphasis
across the sector to create further efficiency and cost savings.
Over half (54%) also scan paper invoices for around a third of their total invoices. This
was recorded at a similar level in last year’s research, where we found that 56% were
scanning paper invoices for a third or more of their total invoicing.
While it shows that this is still the most popular approach for large proportions of invoices,
in contrast, the manual entry of invoices has dropped quite significantly, with just 19%
using this approach for a third or more of their invoicing. This shows a fall of 14 per cent,
down from 33% in 2015.
Figure 6: What percentage of your total invoicing is made up of the following?
0% 1-5% 6-10% 11-20% 21-30% >30%
Scanning of paper invoices
Printing & rescanning of PDF
Manual entry via a web portal

or form
Exchange of e-documents
A combination of the above
0% 25% 50% 75% 100%
The use of a combined approach is popular across our participants, with 34% stating that
multiple approaches are used for the largest proportion of their invoicing. Closely
following this, 30% state that the exchange of e-documents (including PDF attachments)
is used for a third or more of their invoices, which perhaps at least partially explains the
lack of rescanning of PDF documents.

In terms of the duration of the invoicing process, 51% of respondents told us that it is
currently taking less than 10 days to process an invoice ready for payment (including
capture, code, match and approve). A further third of participants state that this takes 11
to 20 days, whilst just 15% told us it takes 21 to 30 days.
Figure 7: On average, how long does it currently take your

organisation to process an invoice ready for payment (capture,
1%
15% code, match and approve, etc)?
Less than 10 days

51% 11 to 20 days
21 to 30 days
33% More than 30 days
Don't know
A quarter of participants (25%) state that their PO

compliance level is between 70 and 90%
It’s good to see that many of our participants are achieving a high level of compliance.
The vast majority of respondents (65%) told us that their compliance level is above 50%,
with 17% of this group stating this is above 90%. Just 16% state they are below 50%
compliance.
Figure 8: Are you aware of your organisation’s current level of PO

compliance?
14% 16%
5% Less than 50%
Between 50 and 70%
Between 70 and 90%
17% 23% More than 90%
We don't use POs
Not aware of compliance level
25%

A lack of resources remains the top barrier to
adopting e-invoicing across the sector
Given current budget restraints across local government under austerity measures, this is
perhaps not surprising. However there has been a decrease in the number of participants
who consider this to be a significant problem, from 40% in 2015 to 32% in 2016.
Figure 9: Of the following list, are you experiencing any barriers to e-invoice adoption? Please tick all that
apply.
Lack of resources
Return on Investment not high

enough
Current processes work well

enough
Difficulties gaining supplier

adoption
Reluctance to add another

solution to existing services
Unable to build business case
Resistance to change/cultural
challenges
Awaiting guidance from

government
Lack of suitable technology

already in use
Incompatibility within our current

IT solutions
Other
We are not experiencing any

barriers
Don’t know
0% 8% 16% 24% 32% 40%
Difficulties gaining supplier adoption (28%) was also recorded as still being a significant
barrier, down only 2 per cent since last year. Many participants also state that there is a
belief within their organisation that current processes are working well enough (22%),
perhaps highlighting a lack of understanding on the benefits of e-invoicing methods at
the top level of organisations. 

The top invoicing challenges for the year ahead are
seen as cost reduction (49%) and time spent by staff
issuing, transmitting and receiving invoices (42%)
This again shows little change from last year’s results, suggesting that many of the
challenges originally identified have not yet been resolved. Further challenges were
highlighted as implementing new technology (41%), keeping up with compliance and
regulation (35%) and making payments on time (34%).
Figure 10: In regards to invoicing, what are your organisation’s main challenge in 2016-17? Please tick all
that apply.
Time spent by staff issuing,

transmitting and receiving invoices
Training on new processes
Maintaining visibility
Cost reduction
Keeping up with compliance and

regulations
Staff reduction
Implementing new technology
Selecting the right technology to

automate the process
Making payments on time
Management duplicate
Other - please specify
0% 10% 20% 30% 40% 50%
On a positive note, 63% of participants have a strategy or plan in place to enable them to
overcome these challenges, and of this group, 40% plan to review their current process
within the next six months. Furthermore, of those who do not currently have a strategy to
overcome the challenges they face, 38% still say that this will be reviewed within the
next six months, suggesting a concerted effort to tackle these issues across the sector.

Figure 11: Do you have a strategy or plan in place to overcome
18% these challenges and difficulties?
Yes
No
19% Don't know
63%
Figure 12: Are you planning to review your current processes?
Respondents who have a strategy Respondents without a strategy
Yes, within six months
Yes, within twelve months
Yes, post twelve months
Yes, but no timeline
Just reviewed
No plans to review
Don’t know
0% 20% 40% 60% 80%
Of those without a strategy, 48% stated that this was due to other strategies being given a
higher priority. This could arguably link back to those who believed current invoicing
methods work well enough within their organisation (see figure 9), signalling a trend
across the sector that many do not fully understand the benefits of e-invoicing methods.
However, many organisations are planning investment in e-invoicing over the coming
year. Over a third (37%) told us that they plan to invest in receiving e-invoices, whilst a
further 27% invest in Accounts Payable automation and 26% plan to fund e-procurement.
 

Figure 13: Of the following, in which areas does your organisation plan to invest in 2016-17? Please tick
all that apply.
E-Procurement
Accounts Payable automation
Full Purchase-to-Pay solution
Sending e-invoices
Receiving e-invoices
Scan & Capture solutions
Analytics for AP/Finance
Invoice financing solutions
Early payment solutions
Other - please specify
No planned investments
0% 8% 16% 24% 32% 40%

 

Conclusion
by Stephen Carter, Regional Network Business Area
Director at Basware
The public sector is evolving, and this report shows that the benefits of e-invoicing are
understood by finance teams.
However, it also shows that due to lack of IT resources, senior management are not
making this a priority. Therefore, the efficiency and cost savings are being ignored, at
best, or even compounded by further processing costs.
The case in point is the waste in time and money in handling PDF based invoices, now
over 80% of all invoice traffic. Our results found that over 70% print and reprocess these
invoices as paper. This is particularly striking as the vast majority are machine readable
or PDF based e-invoices. By reprocessing this invoices, all the efficiency opportunities
offered by the supplier sending a PDF email are lost and new costs are added. This
means that the lack of a top down push is adding new costs to the finance team, just as
a new round of budget cuts are coming down the line.
Alongside this, the push to pay suppliers within 30 days or even 5 days adds more costs,
as temporary staff plug the gap in a now extremely inefficient process. At the same time,
supplier adoption is seen as a barrier to e-invoice, although the potential adoption rate
could be at 80% overnight with the right off-the-shelf solution handling PDFs alongside all
the other invoice types.
On the positive side, there is a general recognition that email represents a fraud risk and
many do have a system in place to address this security hole. Outside of this, it’s also
good to see that e-invoice sending is now on the radar, especially given the public
sector’s role as a supplier to every business in the UK. By setting an example here, the
private sector will experience first-hand the benefits of e-invoicing, whilst the public
organisations themselves can make substantial savings.
Importantly, it does appear that e-invoicing is now on the to-do list for many
organisations. The challenge now is make sure the executive budget owner understands
why this must move to the in-progress pile and fast. This needs to happen before the cost
of the invoice process rockets as PDF traffic will only increase over the coming months
and years. 

Appendix 1: Full Survey Questions
Question: How is the use of e-invoicing viewed within your organisation? Please tick all
that apply.
Answer Percent
E-Invoicing provides us with a cost-effective way of increasing efficiency within our organisation 64%
It allows us to improve the time within which invoices are processed 61%
It gives us an effective method of monitoring any possible fraudulent activity 31%
Due to the benefits e-invoicing can provide, it is considered a top priority for our organisation 24%
While the benefits of e-invoicing are understood within our organisation, they are not considered to be 35%
our top priority at this time
Other - please specify 7%
Question: Which of the following invoicing approaches does your organisation currently
use? Please tick all that apply.
Answer Percent
Paper invoices 91%
PDF email invoicing 86%
Document imaging or OCR 46%
Outsourced scan and capture 10%
Imaging and approval workflow technology 39%
Supplier portal or online invoices 27%
Prepaid cards for personal budgets 10%
P-Cards 53%
Dynamic discounting solutions 3%
Traditional invoice finance (supply chain finance) 14%
Don’t know 0%
Grid Question: What percentage of your total invoicing is made up of the following?
Scanning of paper invoices

Answer Percent
0% 18%
1 to 5% 6%
6 to 10% 4%
11 to 20% 8%
21 to 30% 10%
Over 30% 54%

Printing and rescanning of PDF invoices
Answer Percent
0% 28%
1 to 5% 22%
6 to 10% 13%
11 to 20% 12%
21 to 30% 10%
Over 30% 15%
Manual entry of invoices via a web portal or form
Answer Percent
0% 40%
1 to 5% 21%
6 to 10% 8%
11 to 20% 4%
21 to 30% 8%
Over 30% 19%
Exchange of e-documents (such as PDF email attachments)
Answer Percent
0% 16%
1 to 5% 23%
6 to 10% 10%
11 to 20% 15%
21 to 30% 6%
Over 30% 30%
A combination of above
Answer Percent
0% 31%
1 to 5% 14%
6 to 10% 6%
11 to 20% 6%
21 to 30% 9%
Over 30% 34%

Question: How many staff members are involved in the invoicing process within your
organisation?
Answer Percent
0 to 10 66%
11 to 20 14%
21 to 30 5%
31 to 40 0%
41 to 50 5%
Question: Are you aware of your organisation’s current level of PO compliance?
Answer Percent
Less 50% 16%
Between 50 and 70% 23%
Between 70 and 90% 25%
More than 90% 17%
We don’t use POs 5%
I am not aware of our compliance level 14%
Question: On average, how long does it currently take your organisation to process an
invoice ready for payment (capture, code, match and approve, etc)?
Answer Percent
Less 10 days 51%
11 to 20 days 33%
21 to 30 days 15%
More than 30 days 0%
Don't know 1%
Question: Do you have a system in place to recognise fraudulent invoices or malware/

ransomware as email attachments?
Answer Percent
Yes 66%
No 7%
Don’t know / Would rather not say 27%

Question: Of the following list, are you experiencing any barriers to e-invoice adoption?
Please tick all that apply.
Answer Percent
Lack of resources 32%
Return on Investment not high enough 16%
Current processes work well enough 22%
Difficulties gaining supplier adoption 28%
Reluctance to add another solution to existing services 8%
Unable to build a business case 5%
Resistance to change / cultural challenge 17%
Awaiting guidance from government on a national system before acting 5%
Lack of suitable technology already present within our organisation 11%
Incompatibility within our current IT solutions 7%
We are not experiencing any barriers 25%
Don't know 6%
Question: In regards to invoicing, what are your organisation’s main challenges in

2016-17? Please tick all that apply.
Answer Percent
Time spent by staff issuing, transmitting and receiving invoices 42%
Training on new processes 20%
Maintaining visibility 7%
Cost reduction 49%
Keeping up with compliance and regulations 35%
Staff reduction 24%
Implementing new technology 41%
Selecting the right technology to automate the process 23%
Making payments on time 34%
Management duplicate 6%

Question: Do you have a strategy or plan in place to overcome these challenges and
difficulties?
Answer Percent
Yes 63%
No 19%
Don’t know 18%
Question: If you answered ‘Yes’, are you planning to review your current processes?
Answer Percent
Yes - within six months 40%
Yes - within twelve months 23%
Yes - post twelve months 6%
Yes, but we do not currently have a timescale 7%
We have just reviewed our processes 20%
No plans to review 1%
Don't know 3%
Question: If you answered ‘No’, is there a reason your organisation does not currently
have a strategy to overcome present barriers?
Answer Percent
Limitations in staffing means it is not currently a priority 14%
Lack of skills in-house to effective plan a strategy in this area 5%
Other strategies are currently of a higher priority 48%
Don't know 19%
Question: If you answered ‘No’, are you planning to review your current processes?
Answer Percent
Yes - within six months 38%
Yes - within twelve months 9%
Yes - post twelve months 5%
Yes, but we do not currently have a timescale 14%
We have just reviewed our processes 5%
No plans to review 24%
Don't know 5%

Question: Of the following, in which areas does your organisation plan to invest 2016-17?
Please tick all that apply.
Answer Percent
E-Procurement 26%
Accounts Payable Automation 27%
Full Purchase-to-Pay solution 18%
Sending e-invoices 16%
Receiving e-invoices 37%
Scan & Capture solutions 23%
Analytics for AP/Finance 7%
Invoice financing solutions 6%
Early payment solutions 12%
No planned investments 32%

Appendix 2: Participating
Organisations
 
FIRE AND RESCUE
Bedfordshire Fire and Rescue Service Royal Berkshire Fire and Rescue Service
Essex County Fire and Rescue Service South Wales Fire and Rescue Service
Greater Manchester Fire and Rescue Service South Yorkshire Fire and Rescue Service
Humberside Fire and Rescue Service Staffordshire Fire and Rescue Service
Mid and West Wales Fire and Rescue Service
HOUSING ASSOCIATIONS
Ability Housing AssociaAon Metropolitan

Affinity SuCon Moat Homes
Barnet Homes NG Homes
Bernicia Notting Hill Housing Group
BPHA Plymouth Community Homes
Bracknell Forest Homes Poole Housing Partnership
Cadwyn Housing AssociaAon Portsmouth Rotary Housing Association
Cassiltoun Housing AssociaAon Radian Group
Chelmer Housing Partnership RCT Homes
Coastline Housing Red Kite Community Housing
DCH Group Selwood Housing Group
First Wessex SLH Group
Freebridge Community Housing Southern Housing Group
Grand Union Housing Group Sutton Housing Society
Hanover (Scotland) Housing AssociaAon Symphony Housing Group
Hanover Housing AssociaAon The Community Housing Group
Kensington and Chelsea TMO West Kent Housing Association
King Street Housing WM Housing Group
L&Q Worthing Homes
Liverpool Mutual Homes Yorkshire Coast Homes
LOCAL GOVERNMENT
Argyll and Bute Council Durham County Council

Arun District Council Ealing Council
Ashfield District Council Essex County Council
Basildon District Council Fareham Borough Council
Blackpool Council Fermanagh and Omagh District Council
Borough of Barrow in Furness Hertfordshire County Council
Borough of Poole Hertsmere Borough Council
Boston Borough Council Ipswich Borough Council
Bristol City Council Isle of Wight Council
Bury Council Islington Council
Canterbury City Council Kent County Council
Charnwood Borough Council Leeds City Council
Chelmsford City Council Leicester City Council
Cheshire East Council Lichfield District Council
Cheshire West and Chester Council London Borough of Bexley
City of Bradford Metropolitan District Council London Borough of Haringey
City of London CorporaAon Melton Borough Council
Clackmannanshire Council Mendip District Council
Comhairle nan Eilean Siar Mole Valley District Council
Council of the Isles of Scilly Newham Council
Cumbria County Council Nuneaton and Bedworth Borough Council
Denbighshire County Council Oldham Council
Derbyshire Dales District Council Oxfordshire County Council
Dorset County Council Perth and Kinross Council
Dumfries and Galloway Council Plymouth City Council

Renfrewshire Council Tower Hamlets Council
Rutland County Council Trafford Council
South Ayrshire Council Wakefield Council
South Gloucestershire Council Warwick District Council
South Staffordshire Council West Devon Borough Council
St Helens Council West Dunbartonshire Council
Staffordshire County Council West Lindsey District Council
States of Jersey Wirral Borough Council
Stoke-on-Trent City Council Wolverhampton City Council
Surrey County Council Worcester City Council
Swale Borough Council Wrexham County Borough Council
Swindon Borough Council
POLICE
Cheshire Constabulary Northamptonshire Police

Devon and Cornwall Police Staffordshire Police
Humberside Police Suffolk Constabulary
North Yorkshire Police

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E–Invoicing in Local Government

Survey Report 2016

To contact the iGov Survey team:

Page 2 of 22 E-Invoicing in Local Government 2016

The importance of adopting a good, clear e-invoicing strategy is fast growing in

• the impact and improvements organisations have seen as a result of e-invoicing;

Page 3 of 22 E-Invoicing in Local Government 2016

Survey respondents represented a broad cross-section of roles across Local Government,

Figure 1: Breakdown of Respondents by Job Role (%)

Job Role Percent

Finance Management 44%

Page 4 of 22 E-Invoicing in Local Government 2016

Provides a cost-effective way to

Improves the time within which

Effective method of monitoring

The benefits available with e-

Though benefits are understood,

0% 14% 28% 42% 56% 70%

While it is positive that many organisations understand the perceived benefits of e-

Page 5 of 22 E-Invoicing in Local Government 2016

PDF email invoicing

Document imaging or OCR

Outsourced scan and capture

Imaging and approval workflow

Supplier portal or online invoices

Prepaid cards for personal budgets

Dynamic discounting solutions

Traditional invoice finance (supply

0% 25% 50% 75% 100%

Page 6 of 22 E-Invoicing in Local Government 2016

Figure 5: Do you have a system in place to recognise fraudulent

Page 7 of 22 E-Invoicing in Local Government 2016

Figure 6: What percentage of your total invoicing is made up of the following?

0% 1-5% 6-10% 11-20% 21-30% >30%

Scanning of paper invoices

Printing & rescanning of PDF

Manual entry via a web portal

A combination of the above

0% 25% 50% 75% 100%

Page 8 of 22 E-Invoicing in Local Government 2016

Figure 7: On average, how long does it currently take your

Less than 10 days

A quarter of participants (25%) state that their PO

Figure 8: Are you aware of your organisation’s current level of PO

Page 9 of 22 E-Invoicing in Local Government 2016

Return on Investment not high

Current processes work well

Difficulties gaining supplier

Reluctance to add another

Unable to build business case

Awaiting guidance from

Lack of suitable technology

Incompatibility within our current

We are not experiencing any

0% 8% 16% 24% 32% 40%

Page 10 of 22 E-Invoicing in Local Government 2016

Time spent by staff issuing,

Training on new processes

Keeping up with compliance and

Implementing new technology

Selecting the right technology to

Making payments on time

Other - please specify