In preparation for the Trans-Tasman e-invoicing initiative announced this Fall, ANZ organisations can get ahead of the curve with some basic planning to take advantage of the massive time and cost savings the initiative will bring while also making it more efficient to work with each other and with other companies worldwide.
Advantages of Trans-Tasman E-Invoicing
The Australian government has predicted that e-invoicing will result in cost savings of 70 per cent over traditional paper or PDF invoices, according to estimates by Deloitte Access Economics.
The Australian government cites costs of more than AUD$30 to process a paper invoice or almost AUD$28 to process a PDF invoice and just over AUD$9 to process an e-invoice. With Australian firms processing in excess of 1.2 billion invoices annually, the cost-savings over 10 years would amount to AUD$28 billion.
E-invoicing reduces processing time, the potential for errors caused by re-entering information into electronic payment systems, and payment delays due to loss or damage of the physical invoice.
According to Ernst & Young’s Worldwide Electronic Invoicing Survey, while it takes 15 days to process a paper invoice, it takes just three days to process an e-invoice on average.
E-invoicing improves productivity and cash flow management. At a glance, the organisation can see what invoices are due to them and owed by them. Organisations can then use analytics with the collected data to gain insights into many aspects of the business that can help them to negotiate better pricing or payment terms or to identify top suppliers.
Compared to manual invoices, e-invoicing reduces errors such as entry errors, double payments and missed payments, saving the organisation both time and money. Another advantage to e-invoicing is a reduction in fraud associated with billing scams, in which a company or individual sends out fake invoices in the hopes that busy accounting staff will simply pay them without question.
E-invoicing can also improve overall supplier relationships through on-time payments, which may enable early-payment discounts and can definitely avoid late payment charges.
Implementing e-invoicing requires organisations to do their homework, including researching software platform suppliers and understanding additional considerations such as tax compliance, international laws and data security.
Five steps for adopting a multinational tax-compliant e-invoice solution
Matt Goss, managing director, AN/Z SAP Concur recommends five steps for organisations to take to ensure they adopt a multinational tax-compliant e-invoice solution:
- Scope: Understand what jurisdictions and stakeholders are involved and conduct a market review of the solutions available.
- Requirements: Know whether your solution needs to incorporate requirements such as GST or VAT.
- Validation: Ensure that the chosen solution will comply with all regulations in your business’ jurisdiction to avoid non-compliance.
- Implementation: Roll out the solution in a staged manner that includes training all staff members and notifying all customers.
- Review: Regularly review the solution once it is in place to maintain compliance and best-fit as your organisation evolves.
E-invoicing will be the first in a series of planned digital innovations that will use the Australian Business Number (ABN) New Zealand Business Number (NZBN) to help organisations save time and money.
