In a recent update, the ATO said that the adoption of e-invoicing can help businesses simplify and automate the exchange and processing of invoices.
“Government agencies, business, and software providers across Australia are getting on board with electronic invoicing (eInvoicing),” the ATO said.
“You might like to consider the benefits of eInvoicing for your organisation, including faster payments from government agencies.”
E-invoicing is the new standardised way to send and receive invoices via existing software, according to the ATO.
It allows sending of invoices directly to the business partner’s accounting system removing the need for manual data entry and making the whole process safer, more accurate and efficient.
The ATO noted that generally, paper and emailed PDF invoices costs between $27 and $30 to process. E-invoicing enables process automation and reduces costs to less than $10 an invoice.
As a supplier, businesses will no longer need to create paper or PDF invoices to print, post or email. As a buyer, businesses won’t need to scan and manually enter invoices into the software.
E-invoicing can also result in fewer errors as it uses standardised data that is validated before the e-invoice is sent through the network to the company’s software.
“It automates invoice processing and helps reduce costs and payment times, among many other benefits,” the ATO said.
“If you do business with the government, federal government agencies are paying eligible eInvoices within five days for contracts up to $1 million where both the supplier and buyer use Peppol eInvoicing.”
The ATO flagged that e-invoices are exchanged securely through the Peppol network by approved access points, using the buyer’s and supplier’s ABNs.
This means the risks of fake or compromised invoices, email scams and ransomware attacks are lower compared with posted or emailed invoices and businesses can keep control of invoice processing. This includes verifying and approving invoices. E-invoices can only be viewed by the supplier, buyer and digital software provider, where needed.
“To use eInvoicing, both you and your business partner need to connect to the eInvoicing (Peppol) network via eInvoicing ready software or a service provider,” the ATO explained.
“Digital service providers have started rolling out eInvoicing solutions. You can contact your software provider to find out what options are available, so you can enjoy the benefits of eInvoicing.”
This comes as the government will finish up its consultation of the Business E-invoicing Right (BER) later this month.
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.