E-Invoicing: A Better Way to do Business

Martin Mane, Assistant Commissioner, Australian Taxation Office

As a franchise owner, I bet you’ve been owed money in unpaid invoices at one point or another. The existing challenges of keeping your business running is timeconsuming without the added burden of chasing overdue invoices.

With the many hats you wear in your business, it’s not uncommon to be flat out keeping up to date with your paperwork when you consider that currently over 1.2 billion paper and PDF invoices are being manually processed and exchanged annually in Australia.

Shockingly, Australian businesses are owed around $26 billion in unpaid invoices, at any one time. For small business owners, this can be the difference between keeping afloat or going under.

The current economic climate has led many businesses to look for ways to improve productivity and streamline manual processes to ensure their profitability over the long-term.

Transformations in digital technology are already providing substantial benefits to the Australian economy through innovations such as mobile payments. E-invoicing is set to deliver further benefits by streamlining invoicing for business in Australia.

E-invoicing offers a ready-made solution that can improve cash flow for businesses and government agencies. Digitisation can help businesses, particularly smaller players, become more financially sustainable over the longer term.

From 1 January 2020, Federal Government agencies capable of receiving e-invoices are committed to paying e-invoices to eligible businesses within five days or paying interest on any late payments.

So what is e-invoicing?

You might think you are already e-invoicing because you’re emailing PDF invoices to your suppliers. But I’m here to tell you; this isn’t what e-invoicing is.

When we talk about e-invoicing, we mean the automated direct exchange of invoices between the supplier’s and buyer’s accounting (software) systems. E-invoices can be sent between different (accounting software) systems as long as both are enabled to use e-invoicing.

Paper-based or PDF invoices will be a thing of the past—no more printing, postage or emails. Trading partners will no longer need to enter or scan paper invoices into their accounting system manually.

In Australia, the common e-invoicing standard is Peppol, an internationally established standard.

Peppol enabled e-invoicing, standardises how invoices are sent and received. It uses agreed common standards that allow the seamless exchange of invoices.

SIX WAYS E-INVOICING HELPS FRANCHISES: Save money

It is estimated that paper invoices cost businesses around $30 per invoice to process and emailed PDF invoices around $27 per invoice. E- invoices cost less than $10 to process. This is mainly due to the time saved, not having to handle each invoice manually.

When a sender and receiver use an e-invoice, it equates to around a $20 shared saving each time an e-invoice replaces a paper invoice, and slightly less than $20 when it replaces a PDF invoice.

Less time and fewer errors

E-invoicing helps businesses save time by not having to re-key or scan invoices, make corrections or chase missing information. No re-keying of information means fewer

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