The United States will be moving towards e-invoicing after the country’s Office of Management and budget (OMB) issued a deadline by the end of 2018.

Currently, 40% of the 19 million invoices the federal government receives annually are processed and managed electronically.

Contractors may be required to submit invoices electronically, if they are not already doing so.

"Electronic payments, obviously, give you the heightened accuracy, the prompt payment and the quick movement of payment of invoices from invoicing to cash in the bank," said Dave Mader, the controller and acting deputy director for management at OMB in a radio interview.

Agencies will be required to use a shared service provider for e-invoicing. The OMB mandate follows a four year pilot of the Internet Payment Platform at US Department of Treasury. OMB is not mandating use of IPP, but is barring agencies from building their own e-invoicing system.

“The reason we want to do [this] is two-fold. One is there is a clear savings to the government from moving from paper to electronic. We have estimates over a couple of studies that show an annual savings of anywhere between $US150 million and $US260 million, which is significant savings. I think as important, or maybe more important, the benefit there is to vendors in moving this process to electronic, especially for small businesses who are very concerned about cash flow,” said Mader.

According to Treasury, 80 US agencies are already using the IPP and in 2015 they have electronically processed 500,000 invoices through the system to date.