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  • E-invoicing

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    E-invoicing

    Electronic invoicing (or e-invoicing) is the automated digital exchange of invoice information directly between a supplier's and buyer's software based on an agreed standard.

    With e-invoicing:

    • businesses will no longer need to generate paper-based or PDF invoices that must be printed, posted or emailed
    • buyers will no longer need to manually enter or scan these into their software.

    Australia has adopted the Peppol framework for e-invoicing. This is an international standard has been used in over 38 countries globally, for longer than a decade.

    Peppol e-invoicing is a more efficient, accurate and secure way to transact with your suppliers and buyers. It uses standardised data that is securely transmitted via a network of approved service providers, called access points.

    Access points connect you to the Peppol network and help you exchange invoices with your trading partners.

    To reflect its ongoing commitment to e-invoicing, the government announcedExternal Link further investment to increase business awareness of e-invoicing as part of its Digital Economy StrategyExternal Link.

    Watch:

    Media: E-invoicing basics
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiunq91bkgExternal Link (Duration: 00:54)

    The Australian Peppol Authority

    The ATO operates the Australian Peppol Authority for the government to help businesses take advantage of the benefits of e-invoicing in the digital economy.

    As the Australian Peppol Authority, the ATO works closely with the digital service providers and business community to ensure the Peppol framework is suitable and implemented consistently across Australia. The ATO does not receive a copy of the e-invoice and we are not able to view the contents of any e-invoices being transmitted between businesses.

    In this role, the Australian Peppol Authority:

    • defines Australian requirements for use of the Peppol standards (e.g. invoice specifications support GST Tax Invoices)
    • administers accreditation of Peppol access points for Australia
    • educates, promotes and provides support for the adoption of Peppol standards across government sectors and the business community.

    E-invoicing benefits

    There are many benefits when both the supplier and buyer use Peppol e-invoicing, including:

    Cost savings

    Generally, paper and emailed PDF invoices costs between $27 and $30 to process. Using e-invoicing, the processing cost is less than $10 an invoice.

    This cost saving is due to not having to manually handle each invoice.

    You:

    • as a supplier, will no longer need to create paper or PDF invoices to print, post or email
    • as a buyer, won’t need to scan and manually enter invoices into your software
    • can automate processing of invoice through e-invoicing
    • can save on material costs and reduce your environmental impact through less paper, printing and delivery costs.

    While you still need to apply your internal checks and assurance processes before paying your invoices, you may see cost savings due to automation of administrative tasks.

    As a result, payments may also be made faster helping improve your cash flow. Some federal government agencies are already paying eligible e-invoices within five days.

    Less errors

    An e-invoice is accurate and complete as e-invoicing uses standardised data that is validated before the e-invoice is sent through the network directly to your software. With e-invoicing you won't need to:

    • re-key or scan invoices
    • make corrections
    • chase missing information.

    Reliable and secure

    The e-invoicing network provides a safer and more secure channel than email or post. E-invoices are exchanged via the Peppol network by approved access points using the buyer's and supplier's ABNs. The risks of fake or compromised invoices is lower and there is also no risk of the invoice not being received (lost in the post or email).

    You keep control of invoice processing, including accepting and approving invoices. E-invoices can only be viewed by the supplier, buyer and digital software provider, where necessary.

    E-invoices do not go through or are viewed by the ATO.

    Accreditation

    To be accredited for e-invoicing with the Australian Peppol Authority, digital service providers must carry out appropriate validation checks and apply integrity measures. For example, they must check Australian business numbers (ABNs) to ensure they are active and valid for use in the e-invoicing environment.

    Validating ABNs provides 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

    Federal government agencies are paying eligible e-invoices within five days. This applies to eligible contracts up to $1 million where both the supplier and buyer use Peppol e-invoicing.

    State governments are also encouraging e-invoicing. For example, NSW has mandated e-invoicing for all government agencies by 1 January 2022 and other states are working on their approach.

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    Connect once, trade with many

    Businesses will only need to connect once to trade with anyone on the Peppol network, regardless of their size or type of accounting software they use. Large businesses in all sectors can add Peppol to their trading networks and help others to do business with them. Whether you are a private business or a public organisation, e-invoicing is your gateway to fast, secure, and borderless trade.

    All that is needed is both the supplier's and buyer's software to be connected to the Peppol network.

    Start the conversation

    You can start the conversation about e-invoicing and the benefits as a:

    • business to your buyers or suppliers
    • tax professional or book-keeper to your clients
    • digital service provider to your users
    • business adviser to your clients
    • Industry representative.

    Questions to ask

    • How does the business currently process invoices and is there anything in the business processes that may need to change?
    • How many invoices are sent and received in a month? This will help work out the potential cost benefits of e-invoicing.
    • Does your supplier or buyer use e-invoicing or will they? You can use different software, but both will need to use the Peppol e-invoicing network.
    • What software will I need?
      • If you are already using software in your business, then check with your software provider if it is e-invoicing ready and what you need to do.
      • If you do not use software, there are low or no cost solutions available – see e-invoicing accredited service providers.
      • If your software is not Peppol e-invoicing ready, accredited access points can help you become e-invoicing ready – see e-invoicing accredited service providers
      • Where there are additional software costs consider if the cost savings from e-invoicing outweigh the software costs.
       

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    Last modified: 04 Aug 2021QC 57981