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E-Invoicing: A must-have for businesses selling to Australian public sector


Is your organisation looking to digital transformation to deliver much needed cost savings and efficiency gains this year?

If the answer is yes, you’re far from alone. Australia’s total ICT spend is expected to hit a record $133 billion in 2024, up 7.8 per cent on the previous year, according to Gartner.

It’s predicted spending on software and services will surge by 12.8 per cent and 8.2 per cent respectively, as businesses seek to optimise their infrastructure and operational costs by investing in cloud and digital enablement.

Sanctioned by the State

The Australian government has long been alive to the business benefits e-invoicing can deliver.

In 2020, it sought to accelerate adoption by the country’s commercial sector by mandating that all federal government agencies be in a position to receive Peppol e-invoices by 1 July 2022. 

An internationally recognised framework for e-invoicing and e-procurement, Peppol (Pan-European Public Procurement OnLine) is used by more than 30 countries in Europe, Asia and North America.

Having this technology in place has enabled the government to implement a five-day payment policy for its small business suppliers.

The state and territory governments have followed suit: NSW, Queensland, Western Australia, South Australia and the ACT have all launched e-invoicing adoption programs and the Australian Tax Office is encouraging local authorities to do likewise.   

If you sell to the public sector, or aspire to do so, being able to take advantage of these favourable payment terms can make a real difference to cash flow.

Better bread and butter business processes

But while it can be relatively easy to pique decision makers’ interest in big picture programs of work, it’s all too common for more basic business processes to be overlooked in the transformation stakes, despite the significant benefits digitising them would deliver. 

Invoicing is a case in point. In 2024, many local enterprises are still using traditional methods and legacy systems to bill their customers for goods dispatched or services rendered.

Manual billing also carries the risk of human error and getting it wrong can cost businesses dear.  Having invoices rejected because they’re incorrect can mean their payment is delayed by days, if not weeks. If that happens frequently, you’ve got yourself the perfect conditions for a cash flow crunch!

Moreover, sub-optimal billing processes create a less-than-stellar customer experience and may even cause customers to question the professionalism of your organisation.

Turning to technology

Adopt e-invoicing and it’s a very different story.

The digital exchange of invoices between a supplier and a customer’s financial software systems via a secure network, e-invoicing eliminates many stages in the billing process – think printing, storing, posting and emailing.

Implement a modern e-invoicing platform and your customers will be able to access and download their bills securely, immediately they’re issued – and your accounts receivable team will be able to monitor whether and when they’ve done so.

Processing time is reduced for both parties and that means you’re likely to be paid faster. That’s a boon in today’s times, given the increased costs associated with accessing finance facilities for cash flow purposes.

You’ll be able to reduce your operating costs significantly too, if your invoice volume is high. By Deloitte Access Economics’ reckoning, there’s a $20 saving to be had each time a paper invoice is replaced by an electronic equivalent.

Invaluable insights 

E-invoicing also creates an opportunity to avail yourself of unprecedented insights into your customers’ payment journeys, including a bird’s eye view of their payment patterns and behaviours. 

An invoice that remains unopened several days after being sent, for example, may be more likely to require chasing than one that’s been accessed on the day of receipt.

Having that granular business intelligence at their fingertips – choose a platform with advanced automation capabilities and invoicing data will be collected, cleaned, monitored and presented automatically and in real time – can help your AR team get on the front foot with delinquent debtors.

Dealing with them promptly before, not after, they slide into default, will help protect your organisation’s cash flow and bottom line.

While the adoption of e-invoicing may not be an imagination grabbing project, the benefits it can deliver are significant and ongoing. If productivity gains, cost savings and getting cash in the bank faster are priorities for your organisation, it’s transformative digital technology you can’t afford not to have in your ICT stack this year.

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