E-invoicing Explained
E-invoicing is a soon to-be feature of the Australian and New Zealand financial landscape. As Single Touch Payroll improved the reporting capabilities for the payroll industry, so too will e-invoicing change the way invoices are sent between businesses.
E-invoicing employs a common language for all accounting invoices, enabling them to be sent and received by all parties automatically, minimising errors and speeding up the data entry in the process. It’s a win-win for any SMB.
E-invoicing Basics
The Australian and New Zealand governments have committed to work together to bring e-invoicing to each country, allowing for fast, efficient and accurate trading between the two. But that’s not the only reason.
E-invoicing for your business will improve how you interact with other businesses. You no longer have to print, post, email, save or send invoices to your customers. With e-invoicing, it’s all been done for you.
Once e-invoicing has become the go-to standard and is being utilised by everyone, the benefits realised will be immense. Some of the benefits include a reduce cost to process invoices, huge reduction in data-entry mistakes because there’s no more data entry, and time-saving costs for the business. Put more time and energy into analysing your business and learning where to invest your money.
Do you use a different accounting system to your suppliers or customers? No longer will that be the hiccup that holds back information sharing. All invoice accounting information will be translated into a common language that each accounting system can understand on their end.
The way the language is developed has been from other financial sectors around the world who are already using PEPPOL. PEPPOL stands for the Pan-European Public Procurement On-Line (PEPPOL) standard which is internationally established and being used already.
The Benefits of e-invoicing
The benefits of using e-invoicing for your business get better the longer you use it. This is because the time that you save, and money you don’t lose through mistakes, can all be re-invested into your business.
The ATO states that over $26 billion is at any one time owed to SMBs within Australia. This is due to late invoice payments from businesses who haven’t paid for the goods they have received. For SMBs, this can cause a choke-hold on how they run their business, and can force some to close their business down.
20% of all late invoice payments are due to errors that are contained in the invoices themselves. A further 20% of those invoices have been mistakenly sent to the wrong recipient, and therefore take a long time to get resolved.
With more than 1.2 billion invoices exchanged between Australian businesses each year, that’s a lot of mistakes. Because the Australian Government has committed to delivering e-invoicing for your business, they estimate that the economy will save up to $28 billion within 10 years!
Faster Payments and Improved Cash Flow
If you can save money in your business, and do it faster at the same time, you would right? That’s exactly what e-invoicing is bringing to the table.
Not only will a system like this improve your business, but it will help you decide who you want to work with in the future.
Take for example the government and their agencies. If you take advantage of using e-invoicing in your business, you can may be paid in as little as 5 days…
“Some states in Australia, such as New South Wales, will be paying businesses in as little as five business days by the end of 2019, as long as their information is correct when using e-invoicing.” – ATO
E-invoices will improve your business operations, increase your cash flow and provide faster payment times.
Cost and Time Saving Processes
When you use e-invoicing, you’re going to save costs, and lots of them.
Estimated costs for businesses to produce and manage invoices start at $30.87 for paper invoices, and $27.67 for PDF invoices. It’s not a very efficient or cost-effective business model.
With an e-invoice costing on average around $9.18 to process, there’s a massive saving right there. In fact, it’s about a 70% saving for your business.
When e-invoices are shared between a business, the savings are of a benefit to both.
If you can get rid of paper invoices, it’s a saving of $21.69, and for removing a PDF, you’ll save $18.49. All from the introduction of e-invoices.
E-invoicing will make it easier for your business to interact with Australian and New Zealand businesses, and governments. This common approach gives you more time and money that you can reinvest into your growing business.
Minimise Errors
How many mistakes each year does your business make? What if they’re just the ones that you know about?
Human error is a fact of life in any business, yours too! When you use e-invoicing, the information is sent and received using industry specific standards that are high quality.
Manual handling of facts and figures and re-entering information can all cause errors for your business. It probably already has.
Direct Information and Security
With less handling of invoices, your business information is secure and entered directly into Accentis Enterprise, or your accounting system if supported. E-invoices will be sent using a transport provider, such as Ozedi or MessageXchange, directly to your customer.
It’s similar to how Ozedi and MessageXchange send Single Touch Payroll data to the ATO. It does not send anything to the ATO however and does not pass GO. Transport providers will offer a streamlined delivery process that makes your day much easier and secure.
Business Size Doesn’t Matter
Unlike in some instances, in this case, size doesn’t matter! When STP was introduced, the size of the business affected when you needed to use it. With e-invoicing, there are no barriers to entry!
If you’re a small 1-2 person operation or a national government body, you can both send an e-invoice to each other the same as you would to a company of the same size as you.
Every business regardless of their size will benefit from using e-invoices.
Implementing e-invoicing
As the standards are developed and more accounting packages such as Accentis Enterprise come on board, implementing it will be relatively simple.
Depending on your system, it will probably be an update that you need to run, plus additional information to get you going. We’ll have a full user guide available for those who like to go it alone, or we can offer support to our customers as needed.
Implementing e-invoicing might sound difficult, but there will be a lot more information to come and help will be available. If you need an additional service to use it with Accentis Enterprise we’ll let you know.
Bookmark this page and check back often to read about any changes or new details that we have added. Make sure to follow us on social media to see any release of new info as it happens!
Additional Reading & Resources
You can find various links throughout this article that will give you more information about e-invoicing. Below are some other resources to help you learn more about e-invoicing and what it can do for your business.
Learn more about e-invoicing:
On November 21st 2019, MessageXchange became the first PEPPOL certified e-invoicing Access Point service provider in Australia and New Zealand.
Conclusion on e-invoicing
Accentis Enterprise is a business management solution that aims to make your workplace more efficient and streamlined with better processes. This is exactly what e-invoicing will do for your business, and why we’re so excited to be involved.
How many invoices do you send out each day? Hopefully it’s quite a few, because that means you’re really busy. Some businesses employ staff just to do this very job every day. Utilising e-invoicing, that person can get their work done faster, and get more work done on other projects.
E-invoicing is a game-changer for the financial side of the business. It’s more efficient, more secure, and will save you time and money. Not to mention that if you work closely with the government or their agencies, you will be paid much earlier than with current systems.
If your business has grown to a point where your accounts, manufacturing, payroll and inventory can all be rolled into one solution, then you need Accentis Enterprise.
Contact us today to get started on a better business journey.
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