Data on Government's Average Late Payment Rate to Its Vendor and Take-up Rate for InvoiceNow14 Sep 2021
Parliamentary Question by Leon Perera:
To ask the Minister for Finance (a) what is the Government’s average late payment rate to its vendors each year since 2018; (b) by when does the Government aim to reach its target late payment rate of below 5%; (c) what factors contribute to late payment and what steps are being taken to minimise these; (d) what is the take-up rate for InvoiceNow; and (e) what steps are taken to encourage these vendors to take up InvoiceNow to help them to be paid quicker.
Parliamentary Reply by Minister for Finance, Mr Lawrence Wong:
Government Ministries, Departments and Statutory Boards (the “public sector”) achieved 96.2% prompt payment rate in Financial Year (FY) 2018 (i.e. late payment rate of 3.8%), reaching our target late payment rate of below 5%. The public sector has maintained the late payment rate below 5% since FY2018 and achieved further improved prompt payment rates of 98% in FY2019 and 98.2% in FY2020.
The public sector has ensured prompt payments through (a) streamlining of the procure-to-pay processes, (b) full adoption of e-invoicing, (c) leveraging on data analytics to enable public sector agencies to track, monitor and intervene on potential late payments, and (d) having senior management support and attention at agencies to collectively drive the prompt payment efforts across the public sector.
InvoiceNow, the nationwide e-invoicing network, was launched by IMDA in 2019 to further digitalise the economy and attain the benefits that e-invoicing brings to businesses, including efficiency improvement, cost reduction, faster payment cycles and being environmentally sustainable. InvoiceNow can help businesses which are not on e-invoicing to start doing so and is an additional option for businesses which already have their own e-invoicing solutions. While businesses do not need to adopt InvoiceNow to be paid more promptly, InvoiceNow is aligned to international and national standards and allows businesses a wide variety of solutions to choose from.
Since January 2020, the public sector has taken the lead to onboard InvoiceNow as the preferred channel, in additional to the existing Vendors@Gov portal, for vendors to submit e-invoices to agencies.
To date, more than 40,000 locally registered entities have signed up for InvoiceNow, over 7,000 of whom are public sector vendors. There are monthly business briefings to entities about the benefits of InvoiceNow and direct engagements to onboard them. Efforts have also been taken to ensure the readiness of solution providers to facilitate a smooth onboarding process for vendors. Low- to no-cost options to onboard InvoiceNow have been established for smaller businesses, and IMDA had a $200 E-invoicing Registration Grant (ERG) to encourage entities to join InvoiceNow by 31 December 2020. Specifically for public sector vendors, briefings were conducted and guides were circulated to encourage adoption. Targeted engagements are also being done for larger public sector vendors.