Einvoicing made easy

This article was current at the time of publication.

A high percentage of the 1.2 billion invoices generated in Australia every year is still being prepared and posted manually, despite the wide availability of electronic invoicing – otherwise known as einvoicing.

Einvoicing is the automated digital exchange of invoice information between sellers and buyers using secure business-to-business networks, such as those readily available through accounting software providers. 

It eliminates any requirement for suppliers to scan or key invoices into the software.

According to the Australian Taxation Office (ATO), paper and PDF invoices generally cost between $27 and $30 to process. Einvoicing can reduce this to less than $10 an invoice.

In 2019, Australia adopted the international e-procurement Peppol framework as the common einvoicing standard.

Peppol’s use is governed by a multilateral agreement structure widely adopted by governments around the world.

A logical extension

Practice Connections Advisory Founder, Alan Fitzgerald, consults to the accounting sector and says einvoicing can now be handled by most accounting computer systems.

“Einvoicing is a logical extension of what’s happening in the market and benefits any organisation that uses it,” FitzGerald explains.

He sees many benefits for accounting practitioners in helping clients transition to einvoicing, including reduced manual data entry, increased accuracy, quicker payment times, and minimising fraud risk.

“The ATO has calculated that up to A$28 billion can be saved over 10 years through the use of einvoicing systems,” FitzGerald says.

The ATO has been tasked with managing the Peppol network as the Australian Peppol Authority. Although it accredits all access point providers, the regulator does not view invoice data, operate as a software service provider, or provide hardware.

Business-to-business integration services provider MessageXchange has partnered with software giant MYOB to provide its ATO-accredited einvoicing solution.

However, MessageXchange Managing Director, John Delaney, says many businesses haven’t made the switch to einvoicing because they don’t think they know enough about it. 

“Einvoicing takes no more than a couple of hours to explore its options and set up,” Delaney says.

He suggests that spending some time to give einvoicing a try could be one of the best decisions a small business can make.

Helping clients

CountX Business Solutions Founder and Partner, Krunal Patel CPA, was an early adopter of einvoicing in Australia and has helped many clients switch from paper-based systems.

“I rolled out einvoicing to my clients well before COVID-19,” he says. “I like the idea of it because I’ve seen it working successfully in other countries, like India.

“There is a benefit for every level of government, business, and industry.”

First, however, he says it’s important that businesses have “all their ducks in a row.”

“Your business name and ABN have to be up to date. You can’t send an invoice from one system to another unless you have the ABN, business name, and other system identifiers in place.”

Patel says there are significantly more benefits from the adoption of einvoicing – such as greater efficiency and faster payment processing – than challenges.

“Practitioners need to take the lead with their clients,” he insists. 

“I’ve started a program with my clients – because some of them have been frustrated by not being able to relate their old system to the new system – by training them on how to do it.

“It’s important to do some hand-holding and to work closely with clients, right down to the granular level.”

Check out CPA Australia’s podcast on the benefits of einvoicing.

This article is an edited version of a story from INTHEBLACK.