Paper and email invoices are set to fade into irrelevance in Australia as federal agencies adopt e-invoicing within the next three months.
This mandatory shift in invoicing practices at the federal level has made it almost impossible for Australian businesses and other levels of government to ignore that e-invoicing is the future, so organisations need to prepare now, according to SAP Concur.
The Australian Taxation Office (ATO) has announced that all Commonwealth agencies must adopt e-invoicing by 1 July 2022 as part of the national Digital Business Plan.
Work has begun in earnest to support the e-invoicing mandate and ensure a seamless transition, with the ATO developing a range of tools and templates to help federal agencies meet their e-invoicing obligations. Australia has also committed to the Pan European Public Procurement On-Line framework as the common standard for e-invoicing. PEPPOL is an international eProcurement framework that enables the cross-border digital exchange of data and procurement documents.
With support resources available and an internationally recognised framework in place for mandated agencies, e-invoicing is close to broader implementation. The ATO believes that the Australian economy could save an estimated $28 billion over 10 years based on the 1.2 billion-plus invoices that are exchanged annually.
Jonathan Beeby, managing director, SAP Concur Australia and New Zealand, said, “The ATO’s mandate for federal government agencies to adopt e-invoicing is not a vague insight into where the future of invoicing might be heading. It’s a clear indication that the boat is already here and businesses will also soon need to get on board before they’re left behind.
“E-invoicing is the next stage of evolution in transactions and procurement. Australian businesses, big and small, will be able to leverage a wide range of benefits that will help foster short-term success and long-term growth if they adjust to an e-invoicing system.”
One of the biggest benefits of e-invoicing is business streamlining and cost reductions, as it will replace the printing, storing, posting or emailing of traditional invoices. It will also remove the need for businesses to manually sort, scan, and rekey invoice information into internal software.
This will ultimately reduce the likelihood of human error or fraud that can occur with manual invoicing, which is costly for businesses to rectify.
Jonathan Beeby said, “E-invoicing will facilitate faster payments to suppliers, significantly improving payment times and boosting the cash flow of those involved. E-invoices are also exchanged more securely than email, reducing the risk of email scams and ransomware attacks.”
For businesses that are hesitant to replace invoicing practices that may have been in place for years, the e-invoicing system uses a common open standard that will allow compatibility across different software platforms. This is especially important for big businesses that use closed, internal electronic data interchange (EDI) networks. Australia’s adoption of PEPPOL e-invoicing will also let small businesses use their own software to send and receive e-invoices while larger businesses will be able to use PEPPOL with existing EDI systems.
Jonathan Beeby said, “Ultimately, businesses and government agencies at every level, no matter their size, will be able to adopt e-invoicing without having to start from scratch. It’s important that businesses take some time to reflect on their current systems and how they can benefit from the shift to e-invoicing.
“With more secure, accurate and faster invoicing that will streamline operations and improve cash flows, it delivers multiple benefits to Australian businesses. However, the key to achieving these benefits is for businesses to be ready.”