Treasury Internet push may speed $532 billion to U.S. vendors

‘More bang’

The Pentagon’s system, called Wide Area Workflow, cut by half the length of the reimbursement cycle, which starts when a vendor submits an invoice and ends when a payment is sent, Miller said. It slashed the cost per invoice 82 percent and reduced the time to payment to less than one month.

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Billing for $6 billion moves online

Payment times via Wide Area Workflow are a “couple days’’ faster than those for paper-based agencies, said Bob Deegan, chief financial officer of Array Information Technology, based in Greenbelt, which provides computer services. A main benefit has been automating invoice approval and tracking, he said.

“With civilian customers, we have to send an e-mail for what the status of an invoice is,’’ said Deegan, whose company got 30 percent of its business from the Defense Department last year. Electronic invoicing “gives our folks a little more bang for their time.’’

Using electronic invoicing helped the Defense Department reduce interest penalties 29 percent between fiscal years 2007 and 2010 even as payments increased 26 percent, according to the department’s 2010 financial report.

Overall, though, government has been slow to adopt electronic invoicing because agency executives rarely consider it a priority on their list of planned technology overhauls, said Jim Cunha, senior vice president of Treasury and Financial Services at the Federal Reserve Bank of Boston.

“What’s very positive about the Treasury mandate is it gives us priority. There’s an awful lot going on in the government these days,’’ Cunha said.

Treasury and the Defense Department plan to develop a single point of data entry for vendors. The Federal Aviation Administration and the Energy and Labor departments have built or are building their own electronic invoicing systems, Miller said.

“If you look at IBM, they’re dealing with hundreds and hundreds of endpoints at the government,’’ Cunha said. “Our ultimate goal would be that the suppliers would have one place to go to be able to invoice to the government. That would be the Nirvana moment.’’