E-invoicing is growing globally with governments all around the world recognizing its benefits and financial incentives. The rising popularity of e-invoicing can be seen in countries like UK, India, Singapore and US. The National Informatics Center reports that in India, more than 49 million e-invoices were exchanged in October 2020 and in the USA, the e-invoicing market is expected to grow by US$ 15.49 billion between 2021 and 2025. Governments are implementing electronic invoicing as a way to digitise trade activities. Australia also boosted electronic invoicing by announcing mandatory adoption for all federal agencies by July 2022.
As a part of the digital business plan, the Commonwealth government is promoting digital transformation to create new opportunities and drive productivity on a national level. The 2021 Federal budget commits $15.3m to accelerate adoption of Peppol e-invoicing in Australia. Many state agencies still rely on traditional invoicing processes, which result in barriers to business activities, errors and inefficiency. But with the growing movement around e-invoicing in Australia, state government agencies should start to prepare now for e-invoicing, rather than wait until it’s mandated.
Why should state governments consider adopting Peppol e-invoicing?
Piggy back off the work the Federal Government is doing
The Federal government has mandated adoption of e-invoicing among its agencies by the 1st of July 2022. Piggy back off the hard work they’re doing to get their suppliers on board while e-invoicing is hot. Once the suppliers to federal government get on board, you can capitalise by onboarding those same suppliers to e-invoicing.
Invoicing software providers are also getting on board now, getting ready for their supplier to issue invoices to Government agencies. The e-invoicing conversations are happening now, so now is the time to strike.
Save time and costs when processing invoices- helping on the road to post-Covid recovery
Processing paper-based invoices has some disadvantages- its costs more, needs more infrastructure and there are high chances of errors. A paper based or a PDF invoice can cost up to $30 because of the amount of time used to manually process them whereas processing an e-invoice costs less than $10. State governments can save costs immediately by adopting e-invoicing. It can significantly reduce manual processes and help to reduce costs.
Paper based or PDF invoices bears the risk of being compromised because they’re either handled manually or is sent via email. An e-invoice is electronically sent from the supplier to the buyer which reduces this risk. Additionally, cyber-attacks are increasing and risks will only grow in the near future. E-invoicing is an effective way to secure your agency’s financial information and also reduce the risk of security breaches. Yes, it’s still digital, but there are strict measures in place, like encryption in transit and at rest, and ATO-certified processes that service providers need to meet. E-invoicing enhances security and reduces the risk of duplicate and fraudulent invoices which costs the state governments millions of dollars every year.
Streamline internal processes
Administrative processes within agencies take significant amount of employee time and effort. E-invoicing helps in automating these processes which results in improved administrative efficiency and cost savings for the government. It also ensures that suppliers get paid faster and makes the process of invoice management transparent.
E-invoicing across all levels of government can help agencies to work more efficiently, save costs and maintain service to drive economic growth. The Australian Taxation Office (ATO) has already mandated e-invoicing for all federal agencies. Now is the right time for state government agencies to transition to e-invoicing rather than scrambling to adopt it when the requirement is extended.
If you’re interested in learning more about e-invoicing, request a call from our e-invoicing experts below.