More than 1.2 billion invoices are sent every year in Australia. Many of these are manually processed as paper or PDF invoices and are sent via fax, post or email. E-invoicing automates this process, resulting in a range of benefits.
The government is looking to mandate e-invoicing for all Commonwealth agencies, which means the time is now for government agencies to start the journey if they haven’t already, according to MessageXchange.
The initiative is part of the government’s Digital Business Plan announced in the federal budget. The government announced $3.6 million over two years from 2020-21 to facilitate the adoption of e-invoicing across all levels of government, and to consult on options for mandatory e-invoicing across all levels of government and by business.
According to the Australian Taxation Office (ATO), with over 1.2 billion invoices exchanged in Australia annually, savings to the Australian economy are estimated to be $28 billion over 10 years.
John Delaney, managing director, MessageXchange, said, “As well as the cost benefits, there are other advantages of moving to e-invoicing including easier invoice processing, fewer errors and increased security.”
For government agencies looking to get started, there are three main considerations. First, onboarding suppliers. If agencies want to manage their supplier community, to control who sends invoices and to provide a degree of security to avoid things like fraud, agencies will need a community management solution. This could come in the form of software.
Second, agencies will need an access point for the exchange of invoices. Third, if the software isn’t e-invoicing capable, agencies will need a gateway to convert the software’s invoice to the format required by the Peppol network.
“One of the key sticking points for government agencies is the ability to manage their supplier community. It’s one thing to be able to receive e-invoices; however, it’s another task altogether to onboard and manage the suppliers sending those e-invoices,” Delaney said.
Identity management is another key consideration. When invoicing transactions are transitioned to online, trust and security are critical. Government agencies will need to know that the e-invoice has come from a trusted source.
In recognition of this, the government has committed a further $256.6 million over two years from 2020-21 to continue development and expansion of Digital Identity to improve access to government services and payments online.
“Government agencies should look for an e-invoicing partner that helps automate the process of ascertaining the legitimacy of invoices, and identifying who is sending the invoices. This includes providing the ability to pre-register and pre-accredit suppliers and identify duplicate invoices to further streamline the process,” Delaney said.
“In addition, government agencies will need to look for a partner that can manage a hybrid environment to cater for the way they’re currently handling invoices through to a fully-digital, automated process.”
“At least to start, government agencies will be looking at a mix of traditional, manual invoices and e-invoices. This won’t be an overnight, straightforward switch. With the right software in place, government agencies will be able to accept those manual invoices, convert them and have them brought into the digital system for better management,” he said.
“Ultimately, the success of e-invoicing will come down to critical mass adopting the technology across both government and businesses. For government agencies, the best way to accommodate this is to make the process as easy as possible for their suppliers and give them a roadmap to achieve digital capabilities for e-invoicing.”