E-invoicing estimated to save businesses $30bn in transaction costs over 10 years

On Friday, prime ministers Scott Morrison and Jacinda Ardern established the ANZEIB to set the direction of how e-invoicing will be rolled out over the next few years. The aim of the ANZEIB is to help small businesses save time and money.

"E-invoicing will help business save time and money by allowing the direct exchange of invoices between suppliers’ and buyers’ financial systems,"Assistant Treasurer Stuart Robert said.

The prime ministers’ announcement follows the recent Australia and New Zealand Productivity Commission’s joint report, Growing the digital economy in Australia and New Zealand: Maximising opportunities for SMEs, and intends to strengthen e-procurement practices, digital identity and company director identification.

The membership of ANZEIB will be announced shortly and the board is likely to meet for the first time in March 2019.

The PMs' also announced Australia and New Zealand’s intention to adopt the Pan-European Public Procurement On-Line (PEPPOL) interoperability framework for e-invoicing to increase opportunities for businesses to integrate with the global trading environment. PEPPOL is currently used across 32 countries in Europe, Asia and North America.

The Australian and New Zealand governments intend to finalise their membership of PEPPOL, and associated terms and conditions, by mid-2019. This will enable the transition to PEPPOL to take place by the end of the year, with businesses able to access the e-invoicing framework from that time.

"Interoperable e-invoicing will significantly improve productivity for businesses large and small, and reduce the costs of doing business for both government and industry," Mr Robert said.

Benefits of e-invoicing 

According to ATO, Australian small businesses are collectively owed $26 billion in unpaid invoices at any given time. Of all late payments, over 20 per cent result from errors on invoices and over 20 per cent from the invoice being sent to the wrong recipient following manual data entry.

E-invoicing, the ATO assures, is not mandatory – businesses will be free to take it up if they choose.

Its benefits include simplified and automated exchange and processing of invoices, as well as reduced payment times and improved business cash flow, especially in government purchasing transactions.

ATO explains that some states in Australia, such as NSW, will be paying businesses in as little as five business days by the end of 2019, as long as their information is correct when using e-invoicing.