E-invoicing is about to get easier as Arden and Morrison move on a $28 billion opportunity
E-invoicing will become easier for Australian small and medium businesses after Australia decided to ink a deal with New Zealand to develop the space.
While not always agreeable, the meeting between Prime Minister Scott Morrison and his Kiwi counterpart Jacinda Ardern last Friday delivered an e-invoicing win for small businesses.
The respective leaders established an electronic invoicing board called ANZEIB to oversee the rollout of e-invoicing technology in both countries, slated to save businesses about “$30 billion” in transaction costs by 2029.
E-invoicing has been championed by government and small-business advocates such as Australian small business and family enterprise ombudsman Kate Carnell in recent years for its potential to improve payment times, and thus, cash flow.
The board will be responsible for ‘setting the direction’ of e-invoicing in Australia and will be comprised of soon-to-be-appointed members, with initial meetings slated for March.
Both Australia and New Zealand will adopt the Pan-European Public Procurement Online interoperability framework (PEPPOL), which is a lot of words for regulation governing cross-border supply chains.
Basically, the framework provides a common language for various e-invoicing software systems to communicate with one another.
Businesses will be able to access that framework by the end of the year, assuming Australia signs up by mid-2019.
Assistant Treasurer Stuart Robert’s media release on the subject said e-invoicing will be good.
“E-Invoicing will help business save time and money by allowing the direct exchange of invoices between suppliers’ and buyers’ financial systems.
“Interoperable e-Invoicing will significantly improve productivity for businesses large and small, and reduce the costs of doing business for both government and industry,” Robert said in a statement.
Previous Australian Small Business and Family Enterprise Ombudsman (ASBFEO) estimates have placed the potential benefit of e-invoicing at $28 billion over 10 years.
About 1.2 billion invoices change hands annually in Australia, the ASBFEO research found, at a cost of about $30.80 for processing a paper invoice, or $27.97 for a PDF invoice.
In contrast, e-invoices cost an average of $9.18, Carnell told estimates last year.
“If federal government picks up e-invoicing across the whole of government and undertakes to pay small business really quickly, within five days or less, then there will be a real incentive for business to pick it up,” Carnell said at the time.
NOW READ: Mastering the basics of cashflow: Six tips for keeping your business on track
Comments