Disruptive by Design: A Golden Opportunity for Government Invoicing
G-Invoicing: Sounds interesting by name alone, right? Chatter among the U.S. Defense Department financial management communities and peripheral groups supporting government invoicing confirms said interest. Many of my colleagues and I want to know more, and I hope you do too because it is changing the way intragovernmental transactions work. In the last year or so, questions, thoughts and, most recently, training are informing audiences about G-Invoicing.
If two government agencies engage in a transaction and both do not record the transaction in the same year for the same amount, then the intragovernmental transactions will not agree, resulting in errors in the consolidated financial statements. When that happens—and it often does—it can mean many dollars worth of discrepancies across the government. For 21 consecutive years, the U.S. Government Accountability Office (GAO) has issued a disclaimer in its financial reporting that essentially says it cannot adequately account for intragovernmental activity and balances among federal entities, according to Treasury Department presentation slides posted online.
Enter G-Invoicing. In short, G-Invoicing is an entirely paperless system serving as the front-end application for users to originate intragovernmental buy and sell (IGT buy/sell) transactions. G-Invoicing manages the receipt and acceptance of general terms and conditions agreements, orders and invoices, according to the U.S. Treasury Department’s Bureau of the Fiscal Service. IGT buy/sell transactions represent the exchange of goods or services between two federal entities.
Because G-Invoicing is web-based, the tool facilitates compliance with the Government Paperwork Elimination Act. Federal trading partners use the portal to exchange information, making G-Invoicing an intermediary or a broker to traverse geographic and time constraints. Users include finance officials, program managers, payment approvers, contracting officers and others involved with originating and fulfilling federal trading partner agreements.
G-Invoicing spans three stages of a transaction’s life cycle, whether each stage is manual or automated. Upon completion of the three stages, G-Invoicing sends settlement information to the Intra-Governmental Payment and Collection (IPAC) application.
IPAC is a system many people are familiar with because of its two other components, the Retirement and Insurance Transfer System, and the Treasury Receivable Accounting and Collection System. It has been around for decades, starting in 1985 as the On-line Payment and Collection system and transitioning to IPAC in 2001.
G-Invoicing implementation began in 2016 and appears to extend through next year, according to a G-Invoicing road map found on the Treasury Department’s website. A significant contributor to the G-Invoicing system is the Intragovernmental Transactions Working Group. The group includes federal government and industry stakeholders to define and inform IGT buy/sell data standards for agreements containing terms and conditions, orders, receipts and invoices. The breadth and depth of working group members will fuel the best end-state G-Invoicing system.
Most IGT buy/sell transactions are reimbursable agreements between two government entities. The Treasury’s Bureau of the Fiscal Service seeks to improve the quality and reliability of IGT buy/sell data with G-Invoicing. G-Invoicing contains system, policy and accounting improvements. But better transparency and governmentwide financial management might be its biggest benefits for the Defense Department. This could be especially helpful because the department transitioned from Financial Improvement and Audit Readiness to full audit mode when this fiscal year arrived.
These are not the only benefits. G-Invoicing also supports two federal entities recording the same amounts for an intragovernmental transaction, which aids in correct consolidated financial statements—an enormous goal of the Treasury and a major expectation of constituents. If the G-Invoicing initiative and system does not sound disruptive so far, not to worry. There are plans to require system use among all agencies.
Agencies have been invited to join the working group meetings to share ideas and business processes for the best possible G-Invoicing solution. I think I may just tune in to a future meeting and see what is new and how intragovernmental agreements, management and transactions are changing for the better. No doubt I will be monitoring G-Invoicing training schedules as implementation continues and affects an organization near me soon. I hope you will, too.
Jennifer A. Miller is a member of AFCEA’s Northern Virginia Chapter, a cost analyst and a deputy branch chief in the Resource Oversight Division of the National Guard Bureau’s Joint Staff. The views expressed here are her own.