Should public sector organisations care about introducing e-billing?

Electronic billing (or E-billing for short) has now been around for several years and has been introduced in businesses like large utilities, telcos and many smaller commercial organisations (such as accounting and legal firms). However, it seems the switch to some form of e-billing has occurred mainly in the private sector and only in a limited way (if at all) in the public sector. In this blog article, we will explore why this is the case and whether this is because the barriers to adopting this approach are different in the public sector or perhaps that some of the benefits may not apply.

The “public sector” is obviously a catch-all term and one which envelopes large national government departments such as defence (including all the armed forces), education (including state run schools and colleges), employment, social security or tax) and smaller local government entities such as urban and rural councils. In addition, it also includes more directly community-focused organisations such as hospitals (of all sizes and kinds), the fire service and the police, etc. Clearly, this represents a wide range of very diverse types of organisation whose needs are likely to vary greatly when it comes to the flow of money in an out. Of course, not all of these organisations send out a bill or invoice or even provide a receipt. However, they all buy products and services of one kind or another and will often have some kind of internal charging method for services rendered (however infrequent this may be). This means that the vast majority of public sector organisations receive or issue bills (especially where they deal with consumers directly) and the volume can be very high. This is true of large council organisations, medical clinics and tax departments for instance and in some single organisations can run into millions of bills each year. For example, both the British Broadcasting Corporation (BBC) and the Driver Vehicle Licensing Centre (DVLC) in the UK issue over 20 million bills a year to consumers alone. We will therefore assume that for the purposes of this article that we are referring to the whole public sector, which includes Government to Government (G2G), Government to Business (G2B) and Government to Consumer (G2C) billing.

Based on the volumes of invoices generated (estimated to be over 2 billion bills/ invoices a year across the entire UK public sector), the automation of billing and payment collection processes (to create greater efficiency) should be a primary concern of most governmental entities. However, the evidence suggests that the generally slow take up of new approaches and online technology in particular has arisen from both many perceived barriers and a lack of perceived benefits versus commercial companies. Let’s therefore look at each of these factors in turn.

The Perceived Barriers
Although there are others, there are five main perceptions that public sector organisations often have about e-billing and payment. These are listed below:

The Perceived Benefits
A manager in the public sector can review the commonly perceived benefits of e-billing as easily as a private sector manager can do so. However, he or she may feel that these benefits may not apply as much or even at all in some cases. In the chart below, we have listed six of the major perceived benefits of modern internet based e-billing and payment portals (again such as Payswyft for example) and commented on the likely applicability of each to both private and public sector organisations.

In addition to the above benefits in each of these six categories, online presentment and payment portals provide for many other valuable features. This includes, easy upload of accounting data files (by many means), file transfer compatibly, to and from all major accounting systems, convenient and useful transactional analytics and cheaper bill-storage and retrieval. In fact, public sector organisations are often required to be able to store and retrieve many years of bills and transactional records, which can now all be done in the third party online bill presentment and payment portal. This means that bills can be easily found, referred to, appended with notes or even resent and a very low cost to the organisation in question.

Every one of the above ultimately can potentially create a much more user-friendly process to send a bill and get it paid for both the organisation and its payees (whether these are other public sector organisations, businesses or consumers). Furthermore, many of the legitimate barriers to entry of the past seemed to have disappeared and the benefits of making the change are now clearer. For this reason, e-billing should now be a key strategy for every public sector organisation.


This article was written by Dr Jon Warner of Payswyft (at www.PaySwyft.com). Jon has extensive senior executive experience and has led organizations in a variety of industries through significant transitions to achieve bottom-line results. He is an expert in developing and implementing strategies in operations, marketing, sales, and corporate turnarounds. Jon is currently CEO of PaySwyft in the UK (an innovative on-line billing and payment business) and Chairman of WCOD (a management consulting and publishing business). He can be reached at jon.warner@payswyft.com.