E-Invoices – Governemnt

Electronic invoicing (or e-invoicing) is the automated digital exchange of invoice information directly between a buyer’s and supplier’s accounting systems. 

With e-invoicing there will no longer be a need for businesses to generate paper-based or PDF invoices that must be printed, posted or emailed. Buyers will no longer need to manually enter or scan these into their accounting system.

In Australia, the common e-invoicing standard is Peppol, which is an internationally established standard. The Peppol standard allows invoice exchange between different accounting systems. 

E-invoicing is a more efficient, accurate and secure way to deal with your suppliers and buyers. 

What is PEPPOL? PEPPOL

PEPPOL was developed by a consortium of European nations to simplify electronic procurement between government agencies and their suppliers. It provides a common set of business processes and technology standards, which can be implemented by governments to establish a secure e-delivery network for electronic transactions. The platform was well- received in Europe and is now being adopted across the globe.  Along with Singapore, Australia and New Zealand were some of the first countries to do so.

Benefits for government 

Adopting e-invoicing across all levels of government is good for the economy. It helps us support small businesses and improves our internal processing. Better payment terms and more streamlined processing for businesses supplying us with goods and services can improve our relationships. It can also reduce administrative delays and payment issues. 

E-invoicing cuts down the need for manual input. This reduces mistakes and results in ‘cleaner’ data. E-invoicing’s centralised system can also increase accuracy and timeliness of financial and budget reporting, providing a better overview of finances.

Benefits for you and your clients

E-invoicing is an opportunity for you to differentiate your service offer by providing cutting-edge advice and encouraging your clients towards a digital future.

E-invoicing doesn’t involve emailing and will not affect your workload. In fact, the automation will provide efficiencies and increase your business productivity.

It will provide you with the opportunity to redirect your focus onto client services – for example, helping your clients to: 

• improve their record keeping 
• meet their reporting obligations 
• improve cash flow. 

Ultimately, you will be assisting them to meet their business objectives more efficiently.

E-invoicing for businesses

E-invoicing has many benefits for every business by simplifying and automating the exchange and processing of invoices.

Digital service providers will be rolling out e-invoicing solutions in the second half of 2020. Contact them to find out what e-invoicing options are available, so you can enjoy the benefits of e-invoicing. 

Benefits for businesses 

E-invoicing provides many benefits for business, including: 

Cost savings : It costs businesses around $30 to process a paper invoice and $27 for an emailed PDF invoice. In contrast, it costs less than $10 to process an e-invoice. The difference is due to the time saved not having to manually handle each invoice. 

Figure 1: Processing costs 

This means an estimated shared saving (between the sender and receiver of the invoice) of around $20 each time e-invoicing replaces a paper invoice.

Figure 2: Shared transaction savings (to sender and receiver) 

E-invoicing can help you save time by not having to: 

• Less time and errors
• re-key or scan invoices 
• make corrections 
• chase missing information. 

Data will be more accurate and complete as it travels from system-to-system. 

A common standard for e-invoicing ensures: 

• important data is entered accurately before an invoice is sent 
• consistent exchange of invoice information. 

E-invoicing reduces manual handling and reduces the number of systems you use. Not having to re-key information means fewer mistakes. Not having to mail invoices lowers the chance of them being lost in transit. 

While you still need to apply your internal assurance processes before paying your invoices, the time you save in administration can provide opportunities for you to focus on growing your business. 

• Reliable and secure

The e-invoicing network provides a safer and more secure channel than email. E-invoices are received directly into your business’s financial systems. They are sent through the e-invoicing framework via approved and authenticated participants. Therefore, the risk of fake or compromised invoices is lower. 

The only parties that will see the e-invoices are the software providers, buyers and suppliers. E-invoices will not go through or be viewed by the ATO. 

Accreditation 认证

To be accredited for e-invoicing, Australian service providers must carry out appropriate validation checks and apply integrity measures. For example, they must check Australian business numbers (ABNs) to ensure they are active and valid for use in the e-invoicing environment. 

Validating ABNs provides you with greater assurance of the identity of the sender and increases protection against the fraudulent misuse of a business’s ABN. 

• Reduced payment times

The Australian Government is supporting small business by offering improved payments times. Since 1 January 2020, Australian Government agencies have begun:

• paying e-invoices within five daysExternal Link
• paying interest on any late payments. 

This applies to contracts up to $1 million where both the buyer and supplier use Peppol e-invoicing systems. 

Some state governments are also encouraging e-invoicing. For example, NSW has announced their Faster payment terms policyExternal Link. Other states are reviewing their payment term 

• Connect once, trade with many

Our approach to e-invoicing means that all businesses, in all sectors, can open their networks and trade with many partners, regardless of their size or the financial software they each use. Whether you are a private business or a public organisation, e-invoicing is your gateway to fast, secure, and borderless trade.

• Environmentally friendly

E-invoicing is eco-friendly as it eliminates paper and requires less energy, resources and physical space. By not using paper you can save on material costs and reduce your environmental impact through less paper, printing and delivery costs. You don’t have to worry about losing invoices in the mail or in your office as invoices are stored in the system.

Getting your business started with e-invoicing 

To find out how to start e-invoicing, contact your software provider to see: 

• if you are digitally ready 
• how and when they can help 
• what you need to do. 

You may need to update your existing software or add an extra service. 

E-invoicing for tax professionals 

Tax professionals, including accountants and bookkeepers, play a critical role as: 

• trusted advisers for small-to-medium sized businesses 
• a source of advice on running a business. 

Benefits for you and your clients

E-invoicing is an opportunity for you to differentiate your service offer by providing cutting-edge advice and encouraging your clients towards a digital future. 

E-invoicing doesn’t involve emailing and will not affect your workload. In fact, the automation will provide efficiencies and increase your business productivity. 

It will provide you with the opportunity to redirect your focus onto client services – for example, helping your clients to:

• improve their record keeping 
• meet their reporting obligations 
• improve cash flow.

Ultimately, you will be assisting them to meet their business objectives more efficiently.

Getting your clients started with e-invoicing 

Before your start talking to your clients about how e-invoicing can benefit them you should read: 

• benefits for businesses
• our News and resources page 

Share the ato.gov.au/e-invoicing link with your clients to help get learn about e-invoicing.

What the gov want to do with E-invoices?

To help Australian economy recover faster from the impact of COVID-19, the federal government has highlighted critical areas for improvement and developed new mandates so both government agencies and suppliers can evolve and reap the benefits of digital transformation. 

E-invoicing lets organisations process invoices faster with automated, accurate workflows. Essentially, it means that users can pay suppliers sooner and manage business cashflow more precisely. 

E-invoicing lets organisations send and receive invoices electronically, directly into the organisation’s accounting software. It eliminates the need for manual invoicing processes, both paper-based and emails with PDF attachments of invoices.

The reasons for implementing e-invoicing centre on unlocking many benefits for all stakeholders by automating previously manual processes.

Disclaimer

This content is intended for general information in summary form on tax and legal matters at the time of first publication and is not intended to provide, and should not be relied upon in place of appropriate professional advice.  Please consult your tax, legal and accounting advisors before acting or relying on any content provided. 

References

https://www.ato.gov.au/business/e-invoicing/e-invoicing-for-businesses/