Meeting the e-invoicing mandate

Australian federal government agencies have less than five months to comply with the Australian Taxation Office (ATO) mandate to adopt e-invoicing by 1 July 2022, which will be a game changer for government and business across the country and may help the nation’s economic recovery, according to SAP Concur.

When e-invoicing is fully adopted, it will significantly reduce government payment cycle times, with public sector agencies able to return cashflow to their suppliers in as little as five days. This will get cashflow back to small businesses and communities, and into the economy, much faster than current supplier invoicing processes. It will let government suppliers, including small business, speed up their revenue streams and investment cycles.

E-invoicing generates significant savings because a paper or email invoice costs businesses around $30 in administrative time to process, compared to less than $10 for an e-invoice.¹ This will have a significant impact on the economy because more than 1.2 billion invoices are exchanged in Australia every year, with around 90% of invoice processing still partly or fully manual.² Savings to the Australian economy brought by e-invoicing are estimated at $28 billion over 10 years.³

Jonathan Beeby, Managing Director, SAP Concur Australia and New Zealand, says the benefits are numerous.

“E-invoicing provides a centralised system for government agencies that will improve the accuracy and timeliness of financial reporting, which will help with better budget planning.

“Importantly, it is highly secure, so it reduces the risk of fake or compromised invoices that are often associated with email processes. E-invoicing also supports sustainability initiatives by eliminating the need for paper and uses less energy and physical storage space than manual processes,” he said.

In Australia, e-invoicing is based on the successful International PEPPOL (Pan European Public Procurement On-Line) platform. It aligns with the federal government’s cybersecurity focus because it improves security around supplier invoice processing and payments. Considering the cost savings and efficiency gains that e-invoicing brings, the Australian Government allocated $15.3 million in the 2020–21 Budget to enhance e-invoicing adoption as part of the nation’s Digital Economy Strategy.⁴

“Both government and business have recognised that e-invoicing is the future, particularly for organisations that do business across borders. It can easily integrate with existing business processes and deliver almost immediate benefits,” Beeby said.

“E-invoicing is quickly becoming a key enabler within the digital economy. Very soon, organisations that don’t adopt e-invoicing may lose opportunities to businesses that already have e-invoicing in place.”

References
1 https://www.ato.gov.au/business/eInvoicing/benefits-of-einvoicing
2 https://treasury.gov.au/consultation/c2021-185457
3 https://www.ato.gov.au/Business/eInvoicing/eInvoicing-for-government/?=Redirected_URL
4 https://www.pm.gov.au/media/modern-digital-economy-secure-australias-future

Image credit: ©stock.adobe.com/au/Andrey Popov