Vendor payments go electronic

  • Published
WASHINGTON (AFPN) --  The Air Force will be one step closer to its goal of seamless electronic commerce with the implementation of Wide Area Workflow, finance officials said.

The program, a Department of Defense-developed initiative, simplifies the way military services pay vendors and contractors by eliminating the processing of paper forms and invoices, according to Bruce S. Lemkin, principal deputy assistant secretary of the Air Force for financial management at the Pentagon.

Under the program, vendors no longer have to fill out DOD forms and mail them to the Air Force, Lemkin explained. They can now electronically transmit their invoices directly to be approved and certified. The program allows the Air Force to accept goods and services electronically with a digital signature, avoiding delays that often result in interest penalties. The invoices are then forwarded electronically to the Defense Finance and Accounting Service, which issues payments directly to the vendors.

"Doing this process electronically eliminates the chance that invoices and receiving reports are delayed or lost in the mail," he said. "It also reduces the processing cycle time, speeding up payments to vendors."

The Air Force can take advantage of vendor discounts offered if the service officials guarantee to pay vendors within a certain amount of time, he said.

Air Force officials, selected by DOD to evaluate the program, chose Air Education and Training Command and Pacific Air Forces to run pilot programs.

According to Lemkin, both major commands have experienced great success.

AETC officials reduced the money it spent on interest penalties to $106 per million dollars, nearly 50 percent lower than the Air Force-wide average of $200 per million dollars, he said. PACAF officials reduced their interest penalties to only $8.66 per million dollars.

"That's ten’s of millions of dollars of taxpayers' money that we’re saving," Lemkin said. "With those savings, we can support other Air Force needs and warfighting requirements."

The success of the Air Force's pilot program in significantly reducing interest penalties was a key factor in prompting DOD officials to recently announce the mandatory use of the program DOD-wide, Lemkin said.