1st November, 2024
The Australian government is on a mission to drag business paperwork into the digital age — and that means saying goodbye to old-school paper invoices and even PDFs.
They’re pushing for a switch to eInvoicing, and while it might sound like just another tech buzzword, it’s actually a game-changer for how businesses handle their billing.
It’s estimated that Aussie businesses exchange well over a billion invoices every year, but around 90 percent of this process is still partly or fully manual.
This means a lot has to change in Australia before eInvoicing is the norm.
While it’s still voluntary for most businesses right now, there are some pretty compelling reasons why you might want to get ahead of the curve in your organisation.
Let’s dive into what this digital shift means for your business and why it might be worth jumping on board sooner rather than later.
Think of eInvoicing as a direct digital handshake between businesses. Instead of sending paper invoices or PDFs back and forth, it lets your accounting software talk directly to your customer’s or supplier’s software.
Australia’s jumped on board with something called the Peppol framework – the gold standard for digital invoicing already being used by businesses in about 40 countries worldwide, from Europe to Asia and North America.
It’s like having a universal language for business transactions.
The Australian Tax Office (ATO) is in charge of making sure everything runs smoothly here in Australia.
They’re basically the referee, setting the rules and ensuring everyone plays the same game regarding eInvoicing.
The Australian government’s push for eInvoicing adoption stems from its broader digital transformation agenda.
Beth Dowsett, a Product Marketing Manager at MYOB, says, “eInvoicing aligns with the Australian Government’s drive to adopt digital business practices, which is backed by legislative support.
“The Australian government has mandated eInvoicing for its agencies and is encouraging businesses to adopt it as part of the wider digital economy.
Many large organisations may also require eInvoicing from their suppliers, making it essential for businesses to stay competitive in supply chains.”
It’s estimated that eInvoicing could save the Australian economy up to $28 billion over ten years through reduced processing costs and improved business efficiency.
While eInvoicing adoption remains voluntary for most businesses right now, the advantages of adopting digital invoices ASAP extend far beyond regulatory compliance.
For many business owners, cashflow management is one of the biggest headaches month after month.
A big part of that stems from not getting paid quickly enough.
“In a survey of over 2,700 businesses, 40% of small business invoices were paid late,” Beth says, “with 20% of businesses reporting an average delay in payment time of more than 60 days.”
Beth explains one factor involved in having to wait for payments – inefficiencies.
“Invoice processing is time‑consuming and unproductive,” she says. “For suppliers, these processes can involve printing, storing, emailing or posting invoices.
“Plus, upon receipt of the invoice, the buyers may have to manually sort, scan (with or without extraction of data using optical character recognition, or OCR), store and re‑key the invoice information into their systems.”
This all takes time, but happily, eInvoicing can help.
Beth says, “eInvoices are sent between the supplier’s and the buyer’s systems, without the need for printing, emailing, posting or re-keying invoices.”
The Australian government’s push to digitise invoices means they’re going digital themselves, too, which is good for the companies they deal with.
“Due to faster, more automated processing of eInvoices, the Australian Government has implemented a five‑day payment policy,” Beth explains.
“This boosts the cash flow of its suppliers who participate in eInvoicing.
“The Commonwealth Government is also working with the States and Territory Governments to improve their payment time policies.”
Plus, there are cost savings to factor in, too, that help with cashflow.
According to a report from the Treasury Department, research estimates that businesses can expect to reduce processing costs from around $30 per paper invoice to just $10 per e-invoice.
This leads to significantly improved cashflow management over the years.
The best part? Because it’s all automated and standardised, you don’t have to worry about typing mistakes or spending ages manually entering data. Your software does all the heavy lifting for you!
Beth says, “Since the invoice data is directly sent from one accounting system to another, this reduces the chances of human errors like data entry mistakes, duplicate invoices, or misinterpretations.”
Beth also notes, “eInvoicing can significantly speed up payment times as invoices are delivered directly to the recipient’s accounting software in real-time, reducing delays.
“By improving invoice accuracy and processing speed, eInvoicing can also reduce the typical back-and-forth over discrepancies, leading to faster approval and payments.”
So, you get to enjoy faster payments, fewer headaches with data entry, and saying farewell to those dreaded lost invoices.
There’s also the plus of better security against invoice fraud.
“Secure and accurate eInvoices are exchanged more securely than email and snail mail, reducing the risk of fraud, email scams, and ransomware attacks,” Beth explains.
“The Peppol network has an in‑built database of addresses for the accurate delivery of invoices to correct buyers.”
Don’t forget, too, the environmental benefits of eInvoices, thanks to the reduction in paper usage and storage requirements.
Looking for an easy way to get started with eInvoicing? At MYOB, we’ve got you covered.
We’ve rolled out a raft of eInvoicing features, making us one of Australia’s go-to providers for this new way of billing.
We’re all set up to offer seamless integration with the Peppol network, so you can send and receive e-invoices without additional software or complex systems.
Forget about printing invoices or clicking through endless email attachments – the system lets you handle everything straight from your accounting software.
Wondering about access? If you use MYOB Business or access your online AccountRight company file in a web browser, you can register to use eInvoicing today.
Getting set up is surprisingly straightforward — you won’t need a tech degree for this one!
Just three simple steps, and you’re good to go.
First, sign up for eInvoicing through MYOB (our support team can help walk you through the process).
Next, double-check that your ABN is correctly listed in your MYOB profile – this is like your digital business ID.
Finally, pop your clients’ ABNs into their contact details, and you’re all set.
Once that’s done, you can wave goodbye to manual data entry and those frustrating “Did you get my invoice?” follow-up emails.
The system handles everything automatically, cutting down on mistakes and saving you precious time.
Plus, since everything’s digital, you won’t have to deal with that growing pile of paperwork on your desk anymore!
Moving forward, remember to update your business processes to incorporate your new eInvoicing workflows and train staff on the new system.
Of course, you’ll also have to communicate changes to your trading partners.
While eInvoicing remains voluntary for private businesses, the digital transformation trend is clear.
As Australia continues its digital journey, eInvoicing will become increasingly important in business operations.
Early adopters will enjoy immediate benefits and avoid the rush to comply when mandates eventually arrive.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
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