Many organisations around the world are implementing e-invoicing, in particular government agencies. So why is government leading the charge? Here are a few reasons:
It benefits the economy
One of the key reasons government agencies are adopting e-invoicing is to stimulate the economy. It helps increase businesses’ cash flow because payment times are generally reduced. The Australian government even promises to pay e-invoices within 5 days for contracts less $1 million. In fact, studies estimate e-invoicing could provide the Australian economy with over $30 billion in benefits over ten years.
Benefits to government agencies
E-invoicing brings many benefits to government agencies themselves. These include:
- Streamlined processes
E-invoicing saves time processing invoices and payments by automating what would be manual processes. You don’t need to enter invoice information into your software, it just appears.
- Fewer errors
Less manual inputting also means less errors and more accurate data for reporting.
- Reduced costs
Because of the automation, workload and labour costs are reduced. And because there’ll be less errors, agencies avoid the added costs of fixing mistakes. Another critical cost that can be reduced is printing and filing. Overall, studies have found that it costs $30.87 to process a paper invoice, $27.67 a PDF invoice, and only $9.18 to process an e-invoice.
- Faster payments
E-invoicing can significantly speed payment processing due to automation. The average e-invoice is processed in 5 days, compared with 23 days for a regular invoice. This can help government agencies improve their supplier relationships and meet their promised payment terms.
Leading from the front
The government here in Australia is looking for ways to facilitate the adoption of e-invoicing. They’re leading from the front by implementing it with their own agencies first – they’ve mandated the use of e-invoicing for all Commonwealth government agencies by July 1, 2022. They’ve even promised $3.6million to help government agencies transition to e-invoicing and allocated $2.5 million to upskill workers and SMEs.
There are a few agencies that are already accepting e-invoices. Some of them include:
- The Australian Taxation Office (Australian government department)
- The Department of Finance (Australian government department)
- Services Australia (Australian government department)
- The Treasury (Australian government department)
- New South Wales Department of Customer Service (Australian state government department) – check out our case study
- New South Wales Department of Premier and Cabinet (Australian state government department)
- New South Wales Treasury (Australian state government department)
- New South Wales Health (Australian state government department)
- New Zealand Government Procurement (New Zealand government department)
- New Zealand Inland Revenue (New Zealand government department) – check out our case study
If you’re looking at implementing e-invoicing, fill in the form below and we’ll get in touch with more information.