The last 18 months has provided the Government with unprecedented challenges and fundamental changes in their approach to our Economy. Part of these changes includes new ways of incorporating digital services into existing industry practices.
A key goal for the Federal Budget 2021/22, is “Lifting digital capability and adoption across the economy – support Small-to-Medium Enterprises (SMEs) to work and do business in new ways, increasing profitability and saving time.”
In dollar & cents terms, the commitments outlined in the official Digital Economy Strategy:
“The Digital Economy Strategy is supporting Australian businesses by:
- $12.7 million to provide independent advice to Australian small businesses to help them build their digital capabilities through the Digital Solutions – Australian Small Business Advisory Services program
- $15.3 million to enhance the value of electronic invoicing to help businesses reduce costs and increase productivity.
These investments build on the Government’s $800 million investment in the Digital Business Plan, which is helping businesses to use digital technologies to grow and create jobs as part of Australia’s economic recovery.”
Why does this particular government strategy matter to your business?
First, it will impact the way your finance systems operate and interact with other companies.
Behind the scenes, the ATO has been undergoing consultation from large enterprises through to small businesses to learn how they use current e-invoicing technology or plan to implement it soon. In a strategic effort to expedite invoicing processing times and improve accountability, the federal government committed to processing 80% of their own invoices electronically this financial year and aim for 100% by June 2022.
There are multiple trains of thought on implementing PEPPOL and e-invoicing technology to all Australian Businesses: should it be mandated – similar to Single Touch Payroll (STP), phased in slowly or only for specific industries based on revenue. Regardless of the ATO’s direction – the shift to e-invoicing systems is already impacting businesses of all sizes. But what makes it so successful?
Early adopters of e-invoicing systems have experienced improved productivity for everyone from CEOs down to employees. Once implemented, e-invoicing is a huge time saver for businesses and provides invoicing accuracy not seen before. In turn, other benefits include reduced payroll expenditure, greater visibility of finances and improved accounts management.
With digital processes in place, businesses can easily manage all aspects of invoicing or track bad debtors through automatic reminders, reduce the potential for fraudulent transactions and be able to see financial data in real-time. In addition, digital or ‘cloud based’ e-invoicing systems empower your finance team to make more accurate decisions about accounts payable/ receivable – they can see financial data in real-time.
[In a previous blog], we outlined the ATO research into e-Invoicing and the cost of processing manual invoices for a small – medium-sized business. A key set of figures for all businesses to consider: the cost per invoice is $30+ vs a Digital Invoice cost of $10. If your business was saving ~ $20 per invoice, imagine what you could be spending your resources on instead?
Get in touch with Fraser Barry & the Lucent team to start the transformation to e-invoicing systems today.