Have you heard about eInvoicing yet? The Australian Government is actively encouraging businesses to adopt eInvoicing as a more efficient and secure way to send and receive invoices.
As part of the 2020-21 Budget, the Australian Government invested $3.6m to facilitate eInvoicing adoption across the public sector. It mandated that all Commonwealth Government agencies be able to receive eInvoices by 1 July 2022.
In the 2021-22 Budget, as part of the Digital Economy Strategy, the government invested a further $15.3m to enhance the value of eInvoicing for businesses, improve business awareness and accelerate eInvoicing adoption.
Australia has adopted the Peppol (Pan-European Public Procurement On-Line) framework as the common standard and network for eInvoicing, and the ATO has been nominated as Australia’s Peppol Authority.
The Peppol network started in Europe back in 2008. It is a secure international communication system maintained by the non-profit OpenPeppol organisation. Across the globe the eInvoicing market size reached US$11.2 Billion in 2022 and is expected to grow in excess of US$35.9 Billion by 2028.
So what is eInvoicing?
eInvoicing is the digital exchange of standardised invoice information between suppliers’ and buyers’ software through the secure Peppol network. This means that suppliers don’t need to print, post or email paper-based or PDF invoices to their customers, and buyers don’t need to manually enter or scan invoices into their software.
Suppliers and buyers connect electronically on the same network and the information embodied in their invoices is exchanged directly from software to software, no matter what eInvoicing software they use.
Some key benefits of eInvoicing are:
- time and money saved in administration;
- increased reliability and security;
- reduced payment times;
- reduced resource and energy consumption; and
- a business only needs to connect once to trade with anyone on the Peppol network, regardless of size.
Lost invoices could also become a thing of the past, and the risk of fake or compromised invoices or ransomware attacks are significantly reduced as businesses are verified before they can join Peppol.
eInvoices can only be viewed by the supplier, buyer and digital software provider, they will not go through the ATO.
So how can businesses get started?
To start eInvoicing you need to register on the Peppol network. There are a few options to register on the network:
- Through your existing eInvoicing ready software i.e. Xero, Quickbooks etc;
- Through an eInvoicing service provider; or
- Through a free or low cost online solution – there is an eInvoicing Ready product register available on the ATO website.
If you’re already using eInvoicing ready software you can follow the links in your software to get registered. Once registered you need your trading partners to be on the network for the eInvoices to be transmitted.
The process will take time as the Australian business industry progressively joins the network, but with widespread adoption of eInvoicing, the Australian economy will benefit from greater efficiencies, security and cost-effective ways to communicate between businesses and across borders.
Published 1 August, 2023