Australian and New Zealand government are taking a step towards a paper-free payment through the adaptation of e-invoicing. On 17 October 2018, the two nations announced that they encourage the public to give feedback on how electronic invoicing (e-Invoicing) arrangements can be best managed in both countries by releasing a public consultation paper. This consultation paper will contain public views to help create an independent, fair and equitable governance structure for the everyday transaction of e-Invoicing in Australia and New Zealand.
E-invoicing refers to digitally transfers of information between suppliers and customers. The formats are readable by both humans and machines which means that invoices can directly go through any accounting software.
This offers many benefits such as
- It can save billions of dollar
- It increases efficiency and productivity
- It eliminates manual handling of bills which results in faster payment times and reduces delays, and because of that
- It can reduce or, if possible, eliminate mistakes from manual intervention.
According to ATO director Mark Stockwell, he said “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 sixty or ninety or a hundred and twenty day pay cycle at the moment to a few days, it is going to make a massive difference to the Australian economy.”
He also explained that e-Invoicing is not just about sending a PDF through the email system. It is the end of the traditional ways in administrating with invoices such as scanning, PDF’s, posting, collecting, data entry.
Also, research from Deloitte Access Economics estimates e-Invoicing is approximately 70% cheaper to process than traditional paper or PDF invoices which means businesses will be able to spend less time re-entering invoice data for all levels of government and spend more time on growing their business and could result in economy-wide benefits of up to $28 billion over ten years.
Australia and New Zealand’s Prime Ministers agreed to take action on having the same approaches to e-Invoicing as part of the Single Economic Market agenda which aims to established the Trans-Tasman e-Invoicing Interoperability Framework to set out the policies, standards, guidelines and infrastructure for e-Invoicing implementation in Australia and New Zealand, taking advantage of opportunities arising from the electronic transformation of our economy.
The e-invoicing framework in Australia and New Zealand aims to support and simplify the electronic exchange of information, using international standards, directly between both parties without a need to have the same accounting software.
With bookkeepers being involved with the everyday business processes and the governments’ strong wish on enhancing electronic interactivity, they were urged to stay abreast of e-Invoicing developments due to the government’s desire to get the e-Invoicing framework running.