Responding to a tax agent query on the ATO’s tax practitioners webcast, ATO director Mark Stockwell said e-Invoicing would not be made compulsory despite the government committing to moving forward with the initiative, with Treasury recently releasing a discussion paper consulting on the e-Invoicing governance arrangements between the Australian and New Zealand governments.
“We’re not making it compulsory – obviously the benefits stack up for themselves and if people look at the next time they need to upgrade their software or subscription that comes through then they'll be asking their software provider if it is e-Invoicing enabled,” said Mr Stockwell.
“That allows them to reap the benefits when they are dealing with other businesses or government or whoever they are dealing with to get those time savings and more importantly, faster payments.”
Besides faster payment times, Mr Stockwell also believes e-Invoicing will see time savings, and less mistakes from manual intervention.
“Some of the early trials at the moment are indicating that there are great benefits in getting quicker and faster payment times back from the payer,” said Mr Stockwell.
“We’ve already heard of people saying we will pay you in 20 days if you do it through the e-Invoicing system. We think that through market pressure as this comes about and the masses join the initiative then we will see the time frame get smaller and smaller.
“There’s about $26 billion worth of unpaid invoices floating around at any point in time so if we can speed that up from a 60, 90, 120 day pay cycle at the moment to a few days, it is going to make a massive difference to the Australian economy.”
Earlier this year, research from Deloitte Access Economics said e-Invoicing could result in economy-wide benefits of up to $28 billion over 10 years.
The take away for accountants
ATO assistant commissioner Tim Roach said it was vital that accountants were attuned to such changes so they could respond proactively to their clients changing needs.
“For tax and BAS agents, it is really important to know what is the problem that my clients want me to solve and if you go back five years ago or ten years ago it was getting my BAS prepared or lodging my tax return whereas now a lot of those things are becoming increasingly automated,” said Mr Roach.
“The problem that businesses want tax agent and BAS agents to solve has changed and the problem is now how do I use this new technology in my business, how can I take advantage of this.”
Likewise, fellow ATO assistant commissioner, Colin Walker believes e-Invoicing is a joining together of the dots as the industry moves into a total digital environment.
“We’ve moved into a world where practitioner lodgment service is the way that agents now lodge, we have BAS agents in a digital world as well and they were there before we moved to PLS so that was the foundation and from there we’ve moved towards single touch payroll, and when you get to e-Invoicing, you’re now linking the business to other businesses and you can see the opportunities,” said Mr Walker.
“The more we move into software and software based products, we are going to have a total digital environment that will have all the information – that makes life a lot easier for the agent but it also means you can focus on the analytics.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.