Electronic Invoicing Will Save Taxpayers as Much as $450 Million Annually if Adopted Government-wide
WASHINGTON – In support of President Obama’s “Campaign to Cut Waste” across the federal government, the U.S. Department of the Treasury announced today that it is mandating that all Treasury Bureaus implement the Internet Payment Platform (IPP), an electronic invoice processing solution, by the end of fiscal year 2012. Additionally, in fiscal year 2013, Treasury will require that its commercial vendors submit their invoices using IPP. This initiative will both improve government efficiency and cut costs for taxpayers. Moreover, vendors who use IPP will collect quicker payments for their services, receive greater assurances that their invoices are received and processed accurately, and have immediate online access to their invoice status for all agencies using IPP.
Treasury estimates that adopting IPP across the federal government would reduce the cost of entering invoices and responding to invoice inquiries by as much as 50 percent or $450 million annually. These government-wide savings equal roughly one quarter of the $2.1 billion of the efficiency savings that the President’s 2012 Budget called upon agencies to identify.
“Electronic invoicing will mean lower costs for taxpayers and faster payments for private sector companies doing business with the federal government,” said Deputy Secretary of the Treasury Neal Wolin. “Treasury is continuing to move forward to identify innovative ways to use technology to cut waste and improve efficiency.”
"The U.S. Treasury's announcement today is another positive step as we work toward improved government efficiency and transparency, and overall better governance," said Sen. Tom Carper, Chairman of the Subcommittee on Federal Financial Management. "As we work to rein in our massive federal debt and deficit we have to look in every nook and cranny of the federal government to find ways to save taxpayer money while still delivering the services that Americans need and expect from the government. The Internet Payment Platform is a common-sense solution that utilizes technology to process, track and save money in the federal budget, benefiting the American taxpayer's wallet and the federal government's bottom line. I am encouraged that agencies are making the smart administrative and financial management decisions that put us on a path toward a culture of thrift within the federal government. While there is no silver bullet to solve all of our nation's fiscal woes, this action is just one of many silver darts that we can use to better manage scarce taxpayer dollars."
IPP will reduce Treasury’s invoice processing costs by 50 percent, saving approximately $7 million annually. The Treasury bureaus adopting IPP include the Alcohol and Tobacco Tax and Trade Bureau, Bureau of Engraving and Printing, Bureau of Public Debt, Financial Crimes Enforcement Network, Financial Management Service, Inspector General, Treasury Inspector General for Tax Administration, Internal Revenue Service, Office of the Comptroller of the Currency, Office of Thrift Supervision, U.S. Mint, and Departmental Offices.
Treasury’s announcement to adopt IPP comes just over a year after Treasury and the Office of Management and Budget (OMB) created the Office of Financial Innovation and Transformation (FIT) within Treasury’s Fiscal Service. FIT’s mission is to serve as a catalyst in deploying solutions to improve data quality and operational efficiency. Deploying a shared solution for the paperless capture of vendor data is one of FIT’s first priorities. Based upon work performed by FIT, Treasury will soon publish invoice processing data standards to submit data electronically to IPP. Treasury and the Department of Defense (DoD) are working together to identify a single-entry point for all vendors to go paperless and follow one set of government standards for invoice submission instead of unique requirements for each agency. DoD's agency specific solution, Wide-Area Workflow, is used by more than 92,000 vendors to submit more than 7 million invoices a year and is saving taxpayers more than $250 million annually. Moving to a single entry point will allow the government to leverage DoD's experience and accelerate vendor adoption at civilian agencies.
IPP is a web-based capability supported by the Treasury Financial Management Service, a Treasury bureau. The solution is available to all agencies and their vendors. In addition to the Treasury Department, current IPP customers include the Department of the Interior several Treasury Bureaus, the Social Security Administration, and the Forest Service. The Department of Justice, the Executive Office of the President, and the Department of Commerce are currently evaluating the IPP program.
IPP adoption supports one of the Treasury Department’s High Priority Performance Goals to promote paperless transactions wherever possible. This goal is supported by a number of initiatives, including the conversion of check payments for Federal benefits to electronic payments, electronic tax forms, and automating the process to purchase securities. These efforts combined with a government-wide IPP implementation, could save almost $800 million over five years.