Invoice processing costs vary dramatically between councils
News13.08.2012 Comments (1)
Invoice processing can represent a major cost for private and public sector organisations and reducing expenditure in this area is often one of the major motivators for moving to e-invoicing.
While some are spending just a few pence per invoice, others may be spending several pounds, and this is putting them at a severe competitive disadvantage.
In the case of local authorities, high invoice processing costs can eat away at shrinking budgets and mean that taxpayers get less for their money.
It's therefore quite worrying that some UK councils are spending 100 times more per document than others, according to Freedom of Information research gathered by Readsoft.
According to Computer Weekly, the study shows that Broadland District Council is paying an average of almost £30 per invoice.
This is substantially more than the average cost across the 285 local authorities examined of £3.40.
Even this, Readsoft claims, is far too high. It reckons invoices should cost no more than 79 pence to process.
Some councils are doing better than this though. Birmingham City Council, for example, spends 71 pence per invoice, while Hammersmith and Fulham Borough Council spends just 25 pence.
Interestingly, the latter is one of three London councils that have been used as an example of good practice in shared services by the government.
The trio are set to save £7.7m this year, rising to £33.5m by 2014-15 and £40.3m the following year, and Communities Secretary Eric Pickles has urged other local authorities to follow their lead.
Speaking to Computer Weekly about the research, Sarah Burnett from analyst firm NelsonHall, which carried out the research on behalf of Readsoft, said: "My initial impression is that perhaps all haven't answered the same question, but putting that issue aside, it seems councils need to optimise processes to the right level of automation."
She added: "They also need to have the right number of staff so they are not stretched, as well as having the right system support so people have the capabilities to minimise errors."