.png)
Article by Lea Williams
as featured in the Farm Weekly issue 8 September 2022
Over a billion invoices are sent each year in Australia. There is currently a double-up of time with the business that creates the invoice (the supplier) entering data into their accounting system and the business that receives the invoice (the buyer) re-entering this same data into their accounting system.
eInvoicing (or electronic invoicing) allows accounting systems to transfer invoice data directly to each other in a secure environment. It also eliminates the requirement for the buyer needing to re-enter that data into their accounting software.
The benefits of eInvoicing for businesses include:
- Time savings for suppliers not having to PDF, email, or post invoices.
- eInvoicing is more secure than email/post, reducing the risks of fraud, scams, and cyber ransom.
- No more lost or missed emails/mail, incorrect email addresses, or human error leading to quicker turnaround and suppliers receiving payments.
- Time savings for the buyers by eliminating the requirement to re-enter invoice data and scanning invoices. This may lead to additional time savings if the business has a bookkeeper to centralise all invoice management.
- Providing buyers with an accurate business cashflow position showing all invoices in their accounting system allows business owners to make more informed decisions.
- The accounting software used by the supplier and buyer does not have to be the same to send/receive eInvoices. This means businesses can choose the best software for their business and still utilise the efficiencies of eInvoicing.
Australia uses the Peppol System to administer the safe transfer of the eInvoice information between suppliers and buyers. Businesses wanting to use eInvoicing must register with their software provider (if they support eInvoicing) and can only send/receive with other businesses who are also registered.
Interestingly, the Australian Tax Office is responsible for Peppol in Australia. This raises the question, is eInvoicing an avenue for the tax office to have live data access to all invoices? The tax office has legislated that all government agencies must use eInvoicing from 1st July 2022. At this stage, other businesses are encouraged to use eInvoicing, but it is not mandatory. Does this mean all other industries will have to follow suit in the future?
Whether you like the idea of eInvoicing or not, it is predicted to be the future of invoicing. Using your computer software to save time, reduce risk, and be paid quicker makes sense for all businesses to run efficiently and be more successful. As technology increases, so does accountability, with data being easy to access. As we have seen with Single Touch Payroll and SuperStream, this is the way of the future.
To discuss this article further, we encourage you to contact Lea Williams at leaw@byfields.com.au or your Byfields accountant.
Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice.