The federal government and the Australian Taxation Office (ATO) are undertaking a significant work program around future-proofing Australian Small Businesses. Finance systems are a key focus, and the ATO is pushing to accelerate the adoption of e-invoicing. A recent announcement of $15.3 million in funding to help businesses reduce costs and lift productivity demonstrates their commitment.
Small business accounts for between 97.4% and 98.4% of all businesses in Australia (depending on whether you define a small business based on the number of employees or turnover). Small businesses contributed almost $418 billion to Gross Domestic Product (GDP) in 2018-19, equivalent to over 32% of Australia’s total economy. So it’s in everyone’s best interests to build better, efficient business systems. The widespread use of e-invoicing has the potential to simplify processes and help small businesses get paid faster.
The Australian Federal government has adopted the Pan-European Public Procurement Online (PEPPOL) standard for e-invoicing. This standard enables organisations to exchange documents such as invoices and remittances between their respective finance systems, regardless of the software they use. In Australia, PEPPOL identifies an invoice recipient using an Australian Business Number (ABN). PEPPOL is already in place in more than 30 countries, including England, France, Germany, New Zealand and Singapore – our key trading partners.
Working to a common standard such as PEPPOL helps ensure data is correct before an invoice is sent. With more than 1.2 billion invoices sent around Australia every year, Deloitte Access Economics estimates e-invoicing has the potential to deliver $28 billion in savings to our national economy over 10 years.
If your business engages with large utility companies, local or state government, e-invoicing will become a mandatory requirement of your supply agreement in the coming months.
How can your business get on board with the PEPPOL e-invoicing change?
Start the process of moving your manual financial systems to a cloud-based system now. The dedicated migration team at Lucent Advisory have guided many clients through this process. Their understanding of traditional, manual systems and the necessary translation to digital processes is the best in the industry. We can also help to train your existing team in the new software and systems. We are here to help future proof your business.
Get in touch with Fraser Barry & the Lucent team to start the transformation to e-invoicing systems today.