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.
Understanding eInvoicing in Australia
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 government’s digital vision
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.
Benefits beyond compliance
While eInvoicing adoption remains voluntary for most businesses right now, the advantages of adopting digital invoices ASAP extend far beyond regulatory compliance.
Improved cashflow management
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.”
Invoice cost savings
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.
Fewer errors
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.”
Faster payment processing
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.
Better security
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.”
Eco benefits
Don’t forget, too, the environmental benefits of eInvoices, thanks to the reduction in paper usage and storage requirements.
Get started with MYOB
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.
Looking ahead
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.
Source: MYOB November 2024
Reproduced with the permission of MYOB. This article by Kellie Byrnes was originally published at https://www.myob.com/au/blog/the-digital-invoice-revolution-for-smes/
Important: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.”
