With the digitisation of many business processes being employed by many organisations, even the Australian government has realised the potential and benefit of going digital. The government finally kicked off its efforts to accelerate the adoption of e-invoicing by public services and even Australian businesses. They announced $15.3 million in funding as part of this year’s Federal Budget. This means that all businesses operating in the country will be compelled to use e-invoicing in all of their transactions. What exactly does this entail for small businesses? This guide should help you find answers to questions related to e-invoicing systems.
What is E-Invoicing?
Electric invoicing or e-invoicing is the process of billing a customer online rather than via mail. The customer receives their invoice through a secure portal like a website or through their email. Generally, this is paired with the ability to pay and process their bills online as well. Like traditional paper invoices, e-invoices also require a few pieces of key information about the transaction with the customer, such as:
Customer and Seller/Service Provider Information
Purchased Goods or Services
Payment Due Date
Acceptable Payment Methods
These are just a few of the details that may be asked in an e-invoice. Some organisations even offer some form of discount to those who manage to pay their bills early.
Adoption of E-Invoicing by Federal and State Agencies
The Australian federal and state governments are adopting the Pan-European Public Procurement Online (PEPPOL) standard for e-invoicing. This system allows seamless integration with some of the software commonly used by businesses to create invoices. It also identifies recipients based on their ABN.
In terms of payment options, the government is also partnering with several payment providers like EFTPOS, Visa and Mastercard. These organisations, along with the government, are targeting a five-day payment guarantee for e-invoicing to make sure that the system works as efficiently as possible. For now, Australian businesses aren’t affected by this just yet, but the implementation is already in the pipeline.
Why Adopting E-Invoicing for Your Business is Important?
Generally speaking, sending invoices online is a lot more convenient than the traditional way of doing it, which takes some time. You’ll be able to pay and get paid faster, saving you time, money, and effort. Here are just some of the notable advantages of switching to e-invoicing.
Save Time and Money - By the Australian Taxation Office’s (ATO) estimates, you’ll be able to save at least $2 per invoice whenever you process it online instead of in paper form. That doesn’t sound much at first, but if you’re invoicing hundreds or even thousands of customers every day, then that amount could easily be compounded.
Increased Security - PEPPOL e-invoicing also offers increased security as the ABNs of senders and receivers must be registered on the network. Whenever you receive an invoice, you’ll be able to know exactly who is sending it and who you’re paying.
Increased Efficiency - There will be no manual scanning of documents or data entry when using e-invoicing. You don’t have to worry about losing invoices, and everything will be filed and saved in a secure database.
E-invoicing is poised to make business transactions run more efficiently than ever. It may take some adjustment for everyone, but it will eventually pay off. Even if the implementation is still on the way, you should look into switching to sending e-invoices for your business.
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