As part of its recently announced Digital Business Plan, the Federal Government has committed AUD3.6 million towards mandating the adoption of electronic invoicing for all Commonwealth government agencies.
The move aims to encourage greater adoption amongst businesses supplying to government and within their supply chains.
The mandate comes into effect as of 1 July 2022 and will have significant ramifications for organisations doing business with government agencies. More importantly, it is a sign of what’s to come for Australian businesses with the government using a part of the AUD3.6 million to consult on options for mandatory adoption of e-invoicing amongst businesses.
Before we achieve a business landscape driven by e-invoicing, there are a number of challenges to overcome. According to a Billentis study, only 10-15 per cent of Australian transactions are based on e-invoices.
The solution for Australian organisations lies in the nationwide e-invoicing network, which leverages the Pan-European Public Procurement On-line (PEPPOL) framework.
What is 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.
How do PEPPOL participants benefit?
Organisations that connect to the Australian network (via a certified PEPPOL Access Point) can exchange e-invoices automatically and without manual intervention.
In doing so, they can expect:
- Enhanced cash flow management with faster invoice processing, validation and payment times
- Reduced cost of doing business including costs for storing and retrieving paper invoices
- Improved efficiency through streamlined processes
- Better use of human resources versus labour-intensive manual invoicing
Businesses will also experience fewer data entry errors and more accurate, near-real time visibility of payment cycles, helping streamline invoicing processes. In addition, the reduced paper jam will support environmental and sustainability initiatives that businesses are working on.
Businesses that access the Australian e-invoicing network will open up new supply chain financing options, as well as gain easier access to new markets. As the network is an extension of the international PEPPOL e-delivery network, participants can easily transact internationally with other connected organisations—something that has traditionally been a challenge for local businesses.
How does PEPPOL help overcome e-invoicing barriers?
Adoption of e-invoicing is seen as challenging and time-consuming by many global organisations, let alone small business managers. However, e-invoicing solutions with access to a certified PEPPOL Access Point are available for every size organisation, which streamline a number of these challenges as they ensure e-invoicing practices comply with diverse regulations, customer payment preferences and technical requirements in various markets.
Ultimately, the PEPPOL framework does the “heavy lifting” for business leaders, by enabling businesses to communicate electronically with government institutions in the procure-to-pay process, with a single protocol to exchange key business documents.
Australia is moving toward an e-invoicing economy that is focused on simplifying the way the government works with businesses and enabling the country to break through the paper jam.
By connecting with Australia’s e-invoicing network, businesses will open up new growth opportunities, streamline processes and improve efficiencies, while saving money on paper and improving their environmental footprint. The adoption of e-invoicing is set to not only play a significant role in Australia’s economic recovery but Australia’s future.