PEPPOL e-Invoicing has landed!
This year the Morrison Government committed to a Digital Business Plan. This contained a range of measures designed to help Australia capitalise on the digital progress many Australian businesses have made in response to COVID-19.
The government’s goal is to use technology to lift productivity and create jobs, and for Australia to become one of the world’s leading digital economies by 2030. A key pillar of this plan is making it easier to do business with government, and one of the ways to achieve this is through the use of PEPPOL electronic invoicing, or e-Invoicing.
As a result, the government announced a mandate that all Commonwealth agencies would e-Invoice by 1 July 2022, with 80% doing so by 1 July 2021. The government committed to paying supplier e-Invoices up to the value of $1 million in five business days or paying interest on them. The aim is to drive e-Invoicing down supply chains. The government is also consulting on a widespread e-Invoicing mandate.
PEPPOL e-Invoicing is coming your way – soon
It’s likely that businesses will increasingly find they’re required by legislation or by their trading partners to transition to PEPPOL e-Invoicing. So, in these circumstances when change is inevitable, it’s often better to be proactive rather than reactive and in doing so gain the first-mover advantage over competitors.
PEPPOL e-Invoicing has huge potential to unlock economic growth. By reducing invoice processing times and costs, it enables quicker payments, helping both buyers and sellers to optimise their cash flow and working capital. And with COVID-19 hitting the bottom line of so many businesses, there is a pressing need to achieve more with less. Digital technology offers a path back to profitability by creating efficiencies, lifting productivity and bringing down operational costs.
How much does it cost to process an invoice?
It’s not easy to quantify how much it currently costs an organisation to process invoices because the market is so diverse. The accounts payable automation industry, however, calculates that the average mid-sized enterprise pays around $15 to process an invoice, with market leaders paying around $3 through the use of automation solutions.
How much does your organisation pay in invoice processing costs?
Use our calculator to find out.
The Australian Taxation Office says it costs many businesses:
• $30.87 to process a paper invoice,
• $27.67 to process a PDF attachment, and
• $9.18 to process an e-Invoice
While these figures are higher than industry estimates, there are many hidden costs that can be factored into the cost of processing, such as: office overheads, duplicate payments, early payment discounts missed, and late payment fees charged.
Most of the processing costs, however, are attributable to the time employees spend working on invoices: scanning or entering information into finance systems, and checking, validating and following up on missing or inaccurate details. When this work is done by hand, it’s time-consuming and prone to errors, which often means re-work is required, lengthening processing times and increasing costs.
E-Invoicing is the next evolution in automated accounts payable technology, which can already reduce manual data entry by 92%. At the moment, when an invoice arrives in an organisation via paper or email attachment it needs to be entered into the finance systems manually or through an Optical Character Recognition (OCR) tool to be digitised. Even with OCR, there may still be manual touchpoints in the process.
However with an e-Invoice, payables information is exchanged between the supplier’s and buyer’s software systems. It arrives in the organisation digitised, validated and ready for processing and payment. Therefore, relative to invoicing by paper or email attachments, e-Invoicing is considerably more efficient offering:
• Real-time delivery and processing,
• Higher rate of straight-through processing,
• Greater visibility of the invoice lifecycle,
• More complete and accurate data,
• Lower processing costs,
• Quicker payment times
With best-in-class accounts payable automation solutions using OCR technology to deliver a cost of processing of under $3 for many organisations, we expect even stronger results with PEPPOL e-Invoicing where data exchange is considerably more efficient.
Beware invoice scams are on the rise
Another key benefit of e-Invoicing is that it protects both buyers and sellers from invoice scams as all trading partners need to be registered and authenticated on the PEPPOL network.
Fraudulent invoices are the most common of all types of scam and accrue the highest losses. According to the Australian Competition and Consumer Commission’s Targeting Scams report, fraudulent invoices cost businesses $132 million in 2019.
In 2020, invoice scams are estimated to be up by at least 200%. Fraudsters are capitalising on the upheaval that COVID-19 has caused businesses with more people working from home, less visibility and collaboration in the workplace, and disrupted processes and operating models.
Sometimes scammers will intercept emailed invoices, changing the banking details to collect payment themselves. Other times they will issue fake invoices for emergency supplies such as hand gels and antibacterial wipes. Email is a very effective way for cyber criminals to infiltrate an organisation and dupe staff into authorising payments.
Finding a solution for current and future needs
While e-Invoicing ensures security for invoice senders and receivers, an intelligent accounts payable automation solution will also verify that the invoice is coming from an approved supplier and a legitimate business before the invoice can be processed.
Therefore, an automated accounts payable solution that offers PEPPOL e-Invoicing can be a great investment for many organisations. Suppliers will, of course, transition to e-Invoicing at different rates, so businesses need a solution that also offers OCR to process invoices that arrive in the organisation by paper or email attachment.
Having an end-to-end automated accounts payable solution with configurable business rules enables businesses to enforce the same rigor on their invoices regardless of how they enter the organisation, ensuring strong governance, compliance, and business continuity during a period of nationwide transition.
Find out more
Efficiency Leaders is Australian owned and operated and has been delivering accounts payable automation technology for over a decade. The company’s latest release RapidAP offers PEPPOL e-Invoicing and comes with optional add-on modules to automate every part of the procure-to-pay cycle.