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USA comes with ‘Comply or Explain’: the next step before mandatory use of their Invoice Processing Platform

USA comes with ‘Comply or Explain’: the next step before mandatory use of their Invoice Processing Platform

The US Office of Management and Budget is developing new guidance that would strongly encourage agencies to use only the Invoice Processing Platform (IPP) for electronic transactions.

The US Office of Management and Budget (OMB) is circulating a ‘Comply or Explain’ draft memo that wouldn’t quite mandate the use of the IPP, but it would require agencies to justify why they wouldn’t use the IPP. Federal CFOs currently are commenting on the draft guidance.

Like most shared services in the government there has been no mandate or requirement to use it. That is why:

  • the Bureau of Fiscal Service had to convince or sell the benefits of the IPP to agencies.
  • Only recently the Agriculture Department fully implemented the IPP as the first major agency to use all the IPP’s services.
  • Even though some 70 agencies use the portal in some way today, they do not use all of the services (see below).

This push to use the IPP is part of a more aggressive plan for agencies to move to shared services in 2015. OMB sees the greater use of the IPP as an opportunity to potentially increase efficiency, save money and reduce duplicative systems.

The Invoice Processing Platform

The Treasury Department developed the Invoice Processing Platform in 2007 to make the processing of vendor invoices and intragovernmental transactions easier and cheaper. Intragovernmental transactions are those in which agencies pay for services. For example, if the Agriculture Department pays the General Services Administration for rent of a federally-owned property, that may go through the IPP.

The IPP provides five main features:

  • electronic purchase orders
  • payment notification services
  • electronic invoices
  • intragovernmental transactions
  • automated workflow service.

Currently, IPP reports about 80,000 vendors use its services to submit and track invoices, but agency use remains limited. It is estimated that if the entire federal government used the IPP, it could reduce the cost of entering invoices and responding to invoice inquiries by $450 million a year. Treasury says one federal agency already reduced the cost of processing undisputed and disputed invoices by 46 percent and 54 percent, respectively.

 


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