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In 2019, Australia and New Zealand adopted the Peppol eInvoicing data standard and digital infrastructure, enabling firms to exchange procurement data between their finance systems. But if you’re a small or medium-sized business, why is this better than emailing your invoices? Here’s why:

Improved efficiency

While most businesses have transitioned from sending paper to emailing PDF invoices, effort is still required on the receiver’s side to process that transaction. Often someone in accounts payable will manually enter the payables information into company systems. If they make a typo, this can cause an exception and possibly delay your payment.

Similarly, you may make a mistake on your side, keying in an error or leaving required information off your invoice. Exceptions take time to rectify, requiring back-and-forth communication between you and your customer. Clearly, this is time that you would rather spend on making the next sale.  

With eInvoicing, you complete mandatory fields on a user interface. The Peppol network verifies this data for completeness and syntax before transmitting it to your customer. Therefore, any errors or omissions are intercepted early, before causing exceptions and delays to your payment.

Reliability and security

With email, you know that it has been delivered but you don’t know whether it has entered your customer’s accounts payable process: it may be buried in an inbox and not have been actioned. When your payment is due and you follow up on the late payment, you may discover that your customer has no trace of your invoice. Then, of course, you need to resend it, and it still needs to go through the accounts payable approval process before it can be paid. Now, it’s well overdue.

Email is also an insecure channel and one that is frequently compromised by cybercriminals. Scammers may intercept your invoice and alter the payment details with the intent to steal your payment. The Peppol network, however, is encrypted and extremely secure; all trading partners need to be registered and authenticated by their access point providers before they can transact. Therefore, all parties on the network are known and identifiable by their verified Australian Business Number. As a result, you and your customers are considerably less likely to suffer invoice fraud.

Ease of use

Many accounting software packages are already eInvoicing-ready. Users may just need to add their company ABN and their trading partners’ ABNs to their system and nominate a contact person for the Peppol network. Then when generating an invoice, the user can select to send it as an eInvoice. For businesses using these packages, starting to eInvoice does not mean considerable expense or process re-engineering.

    Government incentives

    In the recent Federal budget, the government proposed the creation of a Technology Investment Boost. This would enable small and medium-sized businesses with an annual turnover of less than $50 million to claim a $120 tax deduction for every $100 spent on digital technologies – such as eInvoicing, cloud computing and cyber security – up to $100,000 and until 30 June 2023.

    So, now may be a good time to invest in business software. Further, The Treasury is currently considering options for the mandatory adoption of eInvoicing by all businesses and is consulting on a Business eInvoicing Right (BER). In time, all businesses and all levels of government will be eInvoicing, so being an early adopter could be advantageous.

    Win more business

    By setting yourself up for eInvoicing now, you are helping to future-proof your business. Increasingly your customers may ask you to send eInvoices as they gain significant cost and time savings on their side by not having to manually process these payables. It’s worth getting everything in place now so that you’re in the best position to win that next lucrative contract.

    Equally, when you eInvoice you get paid quicker! The Federal Government and the NSW Government have already committed to five-day payment terms for eInvoices. But even if your customers do not offer this incentive, you will still be paid on-time, every time as late payments should simply not happen anymore. What this means, of course, is that you’ll have more money to spend and invest in growing your business.   

    In conclusion

    It is not just big business that benefits from eInvoicing. By transitioning to Peppol, businesses of all sizes benefit from reliable, on-time, secure payments. Digitised payment practices enable greater efficiency and productivity on both sides, helping both businesses grow and prosper. eInvoicing has been legislated in Australia – its roll out will only accelerate, so forward-thinking businesses are starting to eInvoicing now.

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