.svg){kind=logo}
.svg){kind=logo}
"Use the e-invoice law and stop the waste"
Blog post - Simon Strandell, Commercial Director
Why is Sweden's public administration so lax about the law requiring incoming invoices to contracting authorities to be in a structured electronic format?
Laws are meant to be followed and this provision is more than five years old. Greater compliance would undoubtedly reduce the scope for fraud and increase control. E-invoicing has that effect - and it would be welcome.
Right now, the public sector is wasting a lot of taxpayers' money, and much of it is going straight into rogue pockets.
That last sentence would be nice not to have to write. Partly because it's a serious accusation and partly because we see a pressing need for resources in virtually all public activities.
But unfortunately, waste is a reality that has been confirmed repeatedly lately when Jens Nylander used fine-grained data analysis to map the purchase and management of money in municipalities, regions and government agencies. Jens, a developer and analyst who has been involved in software development for over 25 years, continually uncovers startling waste that has shed light on several serious flaws in how the public sector manages its business relationships.
Nylander points to a range of serious problems, from over-invoicing and the use of rogue companies as suppliers, to breaches of contract and collaborations with companies that lack an F-tax certificate. They highlight a deeper structural problem in public administration.
The simple solution: follow the law
Nylander's reports show that there is widespread negligence when it comes to keeping track of contracts, suppliers and payments. This lack of rigor and control is not only costly. It also undermines confidence in the public sector's ability to manage its money and resources. Clearly, these problems go hand in hand with a lack of effective monitoring and auditing systems, which makes it difficult to detect and address irregularities.
The simple and obvious answer is: follow the law.
The public administration is obviously slow to implement the e-invoicing law that came into force more than five years ago. For one municipality in Västra Götaland, the failure was a costly lesson. Only after a fraud, which cost the municipality SEK 1.6 million, was it decided to only receive e-invoices.
The purpose of the e-invoicing law is to modernize and streamline invoicing processes. Progress that should be in everyone's interests. That's why it's odd that the section is not followed with greater determination. Indeed, if one is conspiratorially minded, it raises suspicions of a deliberate oversight.
One possible explanation may actually be a fear within public authorities that high-quality data from e-invoices would reveal more financial irregularities or inefficiencies. There may be a potential concern that the transparency provided by e-invoices could expose systematic errors and deficiencies.
It is also possible to speculate that there may be a general widespread reluctance to digitize in the public sector. This reluctance may be driven by several factors including a fear that change may lead to discoveries that would require greater accountability and tighter controls.
There may also be a deep-rooted culture of "business as usual" that makes it difficult to implement new and more efficient systems.
Do a thorough review
The revelations from Jens Nylander should serve as a wake-up call for the public sector to take a harder look at its internal processes and systems. If public trust is to be restored and efficiency improved, public authorities need not only to tighten up their contract and supplier management, but also to embrace and effectively implement digital solutions such as e-invoicing.
Complying with a law that already exists should be a given as a first step.
It is time for a thorough and comprehensive review of how the public sector manages its resources. Mainly to protect taxpayers' money, but also to ensure it keeps pace with technological developments.
Simon Strandell
Commercial Director
InExchange
