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  • Benefits of e-invoicing

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

    Keep an eye out for digital service providers 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.

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    Benefits for businesses

    E-invoicing provides many benefits for business, including:

    Cost savings

    It is estimated that 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, due mainly to the time saved not having to manually handle each one.

    Figure 1: Processing costs

    As described, an infographic showing the cheaper  estimated processing costs of an e-invoice at $9.18, compared with a paper invoice at $30.87 and PDF invoice at $27.67.

    This equates to an estimated shared saving (between the sender and receiver of the invoice) of around $20 each time e-invoicing replaces a paper invoice, and only slightly less when it replaces a PDF invoice.

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

    Infographic showing the shared transaction savings (sender and receiver) In this example, you can save $21.69 by not using paper invoices and save $18.49 by not using PDF invoices.Less time and errors

    E-invoicing can help you save time by not having to re-key or scan invoices, make corrections or chase missing information. Data will be more accurate and complete as it travels from system-to-system.

    A common e-invoicing standard ensures the exchange of invoice information is done in a consistent manner and important data is entered accurately before an invoice can be sent.

    E-invoicing reduces manual handling and reduces the number of systems you use. No re-keying of information means fewer mistakes and lowers the chances of invoices being lost in transit.

    While you still need to apply your internal quality assurance processes before paying your invoices, the time you save in administration should 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. As e-invoices are received directly into your business's financial systems and sent through the e-invoicing framework via approved and authenticated participants, 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

    E-invoicing accreditation in Australia requires service providers to do appropriate validation checks and apply integrity measures, such as checking Australian business numbers (ABNs) to ensure they are active and valid for use in the e-invoicing environment. Validating ABNs can provide 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. From 1 January 2020, Australian Government agencies began paying e-invoices within five daysExternal Link and 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 terms.

    Connect once, trade with many

    Our approach to e-invoicing means that businesses can open their networks and trade with multiple partners, regardless of the software they each use. This also ensures that all businesses, in all sectors, can access and benefit from e-invoicing, and trade with each other on the same level regardless of their size and financial software. 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 have reduced environmental impact from less delivery, paper and printing. You don't have to worry about invoices being lost in the mail or in your office, with invoices being stored in the system.

    Benefits for digital service providers

    The e-invoicing initiative creates new market opportunities for digital service providers. It enables cost-effective and innovative solutions for different sized businesses. E-invoicing allows for digital inclusion for all digital service providers and presents equal ability to implement software.

    The common approach across Australia and New Zealand will also bring consistency in the way e-invoicing standards are incorporated into existing or new software products.

    In order to offer e-invoicing services you, as a digital service provider, may choose to be your own access point or to arrange to work with a third-party access point.

    By incorporating e-invoicing into your products you can expand your user or client base by offering a digital solution that will be interoperable regionally and globally.

    You can benefit from becoming an accredited access point or service metadata provider and show your users that you've met the requirements and are trusted to operate in the network.

    If you complete the Australian Peppol Authority accreditation process you'll be published on our e-invoicing accredited service providers list. You can also choose to be recognised by the New Zealand (NZ) Peppol Authority as an accredited NZ Service Provider.

    Benefits for tax professionals

    Tax professionals (including accountants and bookkeepers) play a critical role as trusted advisers for small-to-medium sized businesses and are a source of advice on running a business. 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 improve their record keeping, meet their reporting obligations, and improve cash flow. Ultimately, you will be assisting them to meet their business objectives more efficiently.

    Benefits for government

    The Australian Government is committed to delivering e-invoicing. With over 1.2 billion invoices exchanged in Australia annually, savings to our economy are estimated to be $28 billion over 10 years.

    Figure 3: Benefits to the Australian economy

    Infographic showing the benefits to the Australian economy of e-invoicing, as described. Over 1.2 billion invoices exchanged annually equates to a saving of $28 billion over 10 years.

    Adopting e-invoicing across all levels of government is good for the economy, 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 and reduce administrative delays and payment issues.

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

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    Last modified: 14 Apr 2020QC 57984