The first commercially-available electronic payment network is being rolled out across the UK by high-street bank Abbey.

Medium-sized firms and public sector organisations are likely to be the main customers for the service, which is designed to improve efficiency and speed up cash flow.

The system relies on an internet-based network owned by OB10 which automatically matches incoming invoices with buyers’ records, triggering a payment by Abbey. The buyer then has 45 days to reimburse the bank.

‘E-invoicing will allow suppliers to be paid faster, as well as improving a company’s supply chain and helping them achieve fast payment discounts,’ said Abbey head of financial supply chain solutions Marcus Hughes.

‘It will be particularly beneficial to public sector authorities obliged to pay suppliers within 30 days.’

There are also environmental benefits. Analyst Gartner estimates that nine out of 10 invoices in Europe are still sent out on paper.

The concept of e-invoicing and payment is not new: many larger firms already have systems established with their main suppliers. But the Abbey initiative is the first to be available on a commercial basis.

Smaller suppliers are likely to be particularly interested, according to Butler Group analyst Mark Blowers.

‘Abbey’s involvement will be a good incentive because it offers instant payment,’ he said. ‘It will also ensure smaller suppliers are always paid, which can be a problem with more sophisticated payment systems.’

The OB10 network uses a standardised invoicing and payment system to process invoices in any format suppliers choose. Bills are re-formatted as required and sent electronically into the buyer systems, which match them against purchase order records.

Once the invoice is paid, the system sends e-remittance advice to suppliers.