You might think eInvoicing is what happens when you email invoices from your accounting system but there is much more to it, including a number of benefits for your business.
Here is our quick guide to the benefits of eInvoicing.
What is eInvoicing?
eInvoicing is a new payment method designed to streamline payments between businesses and their suppliers, contractors or clients.
eInvoicing allows invoice information to be digitally transferred directly between a buyers and suppliers accounting systems, even if these systems are different. This removes the need to generate manual invoices or enter invoices for payment into your financial system.
In Australia, the transfer of invoice information is made possible by using enabled software or an access point provider who use common international standards (Peppol), allowing different systems to ‘speak’ to each other.
What do you need to get started?
To start eInvoicing, your accounting software (and that of your recipient) needs to be connected to the Peppol network where eInvoices are delivered securely by Australian Taxation Office (ATO) approved service providers. The ATO administers the network but can’t access or view your invoices.
Many business accounting software providers are building eInvoicing into their products and may include free or low-cost solutions depending on how many invoices you exchange and your eInvoicing product.
If you send or receive invoices using accounting software such as MYOB or Xero you should check with your software provider to see if they are eInvoicing enabled and follow their steps to get started.
If your accounting software can’t eInvoice, you can start eInvoicing now by either:
- connecting your software to an add-on eInvoicing product, or
- purchasing accounting software that can eInvoice.
The benefits of eInvoicing
eInvoicing can save you time by not having to re-key or scan invoices, fix errors or chase up overdue or lost invoices
Your invoice data will also be more accurate and complete as key details are checked before the eInvoice is sent.
eInvoicing means fewer errors and lost invoices, avoiding unnecessary delays in getting paid.
Federal government agencies are paying eligible eInvoices within five working days.
Research shows it costs businesses around $30 to process a paper invoice and $27 for an emailed PDF invoice, but it costs less than $10 to process an eInvoice.
Your actual savings will depend on your processes, how many invoices you send and the time saved in managing your invoicing.
Increased visibility of your finances
eInvoicing providing better visibility throughout the invoicing process which can help you better manage your cash flow, planning and budgeting, helping you more accurately manage your business financials.
Reliable and secure
eInvoicing reduces the risk of scams and fraud as eInvoices are sent via a secure network by approved service providers.
An Australian Business Number (ABN) is used to deliver invoices to the right business, with less risk of fake or compromised invoices.
eInvoices are sent securely by ATO-approved service providers. The ATO administers the network, but can’t access or view your invoices.
Connect once, trade with many
Australia has adopted Peppol, an international standard, that allows digital invoices to be exchanged between different software or systems.
Once you’re connected to the Peppol network, you can exchange eInvoices with any business on the network that is also connected, regardless of their size or software.
Next Steps in eInvoicing
If you think eInvoicing might work for you, getting started is easy:
- Check with your software provider to see if your software is eInvoicing enabled and follow their steps to get started. If you don’t use software, there are free and low-cost options available to help you start eInvoicing now.
- Talk to your trading partners to see if they’re already connected. If not, encourage them to connect and start exchanging eInvoices with you.