6 minute read
Mark Stockwell
eInvoIcIng: THE NEWEST BuSiNESS TREND ON THE MARKET
Businesses throughout Australia are beginning to recover and rebuild after the turmoil of the last two years. Between natural disasters, the pandemic and associated lockdowns, limited travel, supply chain issues and more, businesses in Australia have been doing it tough.
However, businesses also have had an opportunity to rethink how they are doing business. For many, survival equalled going digital and it is the goal set by the Australian Digital Strategy – for all business to become digital businesses by 2030. Going digital will help them become more resilient and manage their businesses smarter. eInvoicing is the next important step to shore up your business future.
eInvoIcIng
What is eInvoicing?
> eInvoicing is the standardised way to send and receive invoice data via a secure network.
> The exchange is direct between a buyer’s and supplier’s accounting systems, irrespective of what software they are using. > The eInvoice shows up automatically as a bill to be paid in your accounting software. Importantly, businesses still retain control of when invoices are paid as they still need to be approved. What makes eInvoicing possible is the network of service providers that is underpinned by the international eProcurement standard called Peppol. It’s this network and the common eInvoicing standard that allow businesses to exchange invoices with trading partners seamlessly, irrespective of what software or system is being used. In Peppol terms, eInvoicing unlocks interoperability. And that’s eInvoicing in a nutshell. It only works if both the sender and receiver are connected to the Peppol network. Another way to look at this is by comparing eInvoicing to a telecommications network. To make a call, you and the person you’re calling need a provider. You can choose any provider to connect to the network, be it Optus or Telstra, and then you can communicate with anyone, domestically and globally. The same concept applies to eInvoicing. To eInvoice you need to connect to the network and choose a service provider, called an access point, as do your trading partners. eInvoicing supports business transactions, and interactions between businesses and government.
So why eInvoicing?
eInvoicing is about helping small business take part in the digital economy. That means it’s easier and cheaper to trade digitally – something that had been costly and driven mainly by large businesses and traditional manual processes.
Mark Stockwell, Acting Assistant Commissioner -Digital Partnerships, Planning & Governance, Australian Taxation OfficeMark is responsible for Digital Partnerships, Planning & Governance at the Australian Taxation Office. This includes the relationship with Digital Service providers and the e-invoicing program, while also leading internal EST operations including planning, resource management and governance functions. Mark was previously a program manager for the government’s SuperStream initiative, delivering significant benefits to Employers and Superannuation funds.
While PDF and email are better than paper invoices, eInvoicing is the next step. It is a significant upgrade in business operations as it removes the need for manual data entry, making the whole process more accurate and so more efficient. It is also much more secure than email, reducing the exposure to fraud. The benefits of eInvoicing equally apply to franchising systems. With a diverse range of franchise structures - from highly coordinated and structured sourcing of supplies by the franchisor, through to franchisees operating with a much higher level of independence, both franchisors and franchisees can reduce manual processing, gain efficiencies, shorten payment times, maintain visibility over invoice processing and improve security.
Security & visibility
According to the ACCC’s Scamwatch, invoice fraud and scams cost small businesses more than $14 million in 2021 and targeted more than 19,000 small business throughout the country. These scams often rely on unsolicited invoices being sent to businesses or involve intercepting invoices and changing payment details to re-direct the payment to fraudsters. eInvoicing reduces these risks through a system of security controls that range from rigorous accreditation of the service providers to encryption and ‘know your customer’ requirements. In Australia, the ABN is used to route invoices through the network and most software solution check it against the record in the Australian Business Register, adding extra checks in the process. eInvoicing will also bring visibility and certainty in your business dealings. With real-time notifications of whether your invoice was received or rejected by your trading partner, you will gain the ability to address any issues on the spot and speed up your cashflow. This means more confidence, less time wasted confirming or chasing invoices, better customer relations and greater control over your finances and decisions. The Australian Government and large businesses are already on board with eInvoicing and using it to pay suppliers quicker than ever. Since 1 January 2020, eInvoicing-enabled Australian Government agencies began paying eligible eInvoices within five days. Many large businesses are also using the efficiencies associated with eInvoicing to improve their processes and payment times to suppliers. Franchisors can also take advantage of eInvoicing, not only to improve your own business but through integrating eInvoicing into franchisee systems. By encouraging your franchisees to adopt eInvoicing you can take advantage of the ‘connect once; trade with many’ feature helping you digitalise and streamline your invoice processing across the entire franchise network. By doing so, franchisors can help strengthen franchisee businesses, making them more resilient and transforming them and your brand into digital businesses. “eInvoicing reduces these risks through a system of security controls that range from rigorous accreditation of the service providers to encryption and ‘know your customer’ requirements.”
As a franchisee, eInvoicing can save you time, money and stress, allowing you to focus on growing and running your business and spending less time on paperwork. While the ATO is responsible for administering the eInvoicing system in Australia, its role is limited to maintaining the Australian version of the Peppol standard and accrediting access points. It’s important to understand that the ATO has no ability to view invoice data. Information is sent directly from one user to another through their respective access points and is not routed through or copied to the ATO.
the future of interoperable eprocurement
eInvoicing is just the beginning. Through the Peppol network Australian business will be able to send and receive other business eDocuments like catalogues, purchase orders, and despatch advice as software solutions include these features. Your software or solution provider will be able to provide more information when this becomes available in their solutions.
get onboard!
Getting started with eInvoicing is easy and the good news is that it’s becoming increasingly available in major accounting software products and it is inexpensive. This may include free or low-cost solutions depending on how many invoices you exchange and your eInvoicing product. Check with your software provider to see if they are Peppol e-invoicing ready and follow their steps to register and get started. If your existing software isn’t ready but you are, you can connect via add-on eInvoicing apps available in your software marketplace. You can also connect through an access point portal or purchase software that is eInvoicing ready. With fewer errors, better security, real-time status information and faster payments, eInvoicing makes perfect business sense. Get connected and start using eInvoicing to free up valuable time that you could spend on growing your business. v
