By opting to submit e-invoices, SMEs who are suppliers to the Government stand to benefit from cost savings of up to 90% and shorter payment cycles. This and other benefits are explained in this article.
Fast, cheap, easy to use and environment-friendly - these are the benefits of the electronic invoicing (e-invoicing) system which was introduced by the government in May 2008. With the adoption of the system, suppliers can now submit their invoices electronically to Ministries and Statutory Boards via the Vendors@Gov online portal (www.vendors.gov.sg), which was set up by the Ministry of Finance's Accountant-General's Department. Suppliers, in particular SMEs, can enjoy the following benefits from e-invoicing:
Research has shown that it costs about $2.65 to issue one paper invoice (including the cost of printing, envelope and postage). By submitting invoices electronically, SMEs can now save as much as 90 per cent of the cost for each invoice.
In addition, the e-Invoice system brings about greater convenience for suppliers. All they need are two minutes and a computer with Internet connectivity to complete their transaction with the government. E-invoicing also eliminates the risk of misplaced hard-copy invoices.
'E-invoicing is definitely the way to go. It shortens the payment cycle. It helps us get paid faster, and eliminates much of the hassle of generating more paper work,' said Chung Kek Yoong, managing director of PacificArena. 'With e-invoicing, our accounts people can also keep track of receivables more efficiently. It's a big plus for us.'
PacificArena, which operates the leisure retail brand PriceBreakers, has submitted more than 2,000 e-invoices to the government since November 2007.
With the e-Invoice system, suppliers can submit and track the status of their invoices through the 24- hour Vendors@Gov online portal that can be accessed any time, anywhere across the globe.
For those who are constantly on the move within Singapore, the availability of Wireless@SG in many public areas provides a truly mobile working environment for them to carry out and monitor their etransactions with the government. SMEs can also potentially save on office rental costs for accounts staff who will be able to work from home.
Government e-services like the e-Invoice system also open the door for SMEs to provide part-time or flexible working arrangements, enabling them to tap a new potential source of employees. A recent International Enterprise Singapore survey showed that about 40 per cent of the unemployed females were not rejoining the workforce due to a lack of part-time working arrangements. Of these, the majority (59.1 per cent) indicated a preference for clerical jobs.
E-invoicing also enables suppliers to cut down on paper use. Currently, the government receives over 600,000 invoices from suppliers a year, which is equivalent to 1.35 million sheets of paper annually. By eliminating the use of to paper invoices and adopting the e-Invoice system, suppliers could help to save more than 200 trees a year.
SUPPLIERS will be given a transition period of six months - from May 1 to Oct 31, 2008 - to adopt einvoicing. Companies will need to get ready their business registration number, IRAS' E-Services Authorisation System (EASY) Access Code and employees' SingPass, and authorise their employees via the EASY system (www.iras.gov.sg) for their employees to perform transactions on the company's behalf on Vendors@Gov .
Small businesses which do not have access to the Internet (for example, newspaper delivery agents, bus operators, canteen operators, etc) can visit the nearest community centre and tap the 'CitizenConnect' services for e-invoicing and other e-services. More time will be given to this group of suppliers to transit to e-invoicing.
For more information, call the toll-free hotline 1800-VENDORS (1800-8363677) or visit Vendors@Gov at www.vendors.gov.sg.
- This article is contributed by the Accountant-General's Department of the Ministry of Finance.
- This article first appeared in The Business Times on 15 July 2008 and information is correct at the time of publication.
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