e-Invoicing

The electronic exchange of invoices between the systems of a supplier and a buyer. 

How is it solving problems? 

Invoice processing is often a manual process and is prone to error due to its paper-based nature. The current invoicing system adds avoidable delay in payment to recipients.  

E-Invoicing removes the need to create invoices that are: 

  • paper-based or PDF  
  • posted or emailed 
  • manual processed.  

It enables direct transmission of invoices between software systems of the buyer and supplier, preventing lost or delayed invoices. The e-Invoicing specifications ensure data is structured and coherent on both ends of a transaction, even when different software is used. 

What are the benefits? 

e-InvoicingBasics.co.uk outlines the following benefits for users. 

Buyers: 

  • Reduced costs 
  • Increased accuracy 
  • Increased Accounts Payable (AP) productivity 
  • Faster processing and payment cycles 
  • Focus on higher value activities 
  • Enhanced accounts reconciliation 
  • Improved cash management 
  • Reduced fraud, duplicates and late payment fees 
  • Improved dispute handling 
  • Improved supplier relationships 
  • Optimised community management 

Suppliers: 

  • Faster payments 
  • Reduced costs 
  • Fewer rejected invoices 
  • Increased productivity 
  • Enhanced accounts reconciliation 
  • Improved customer relationships 
  • Improved cash management 
  • Alternative finance options 

Managers: 

  • Improved visibility 
  • Optimised working capital 
  • Improved compliance 
  • Improve supplier/customer relationships 
  • Enhanced IT system optimisation 
  • Meeting green initiatives 

What are the savings? 

  • estimated to be 70% cheaper to use compared to traditional paper or PDF invoices 
  • reduced cost associated with manual data entry and error handling 
  • reduced payment times to businesses, as little as five business days 
  • improved cashflow, critical to the running of any business. 

Progress Update

Pan-European Public Procurement Online (PEPPOL) is an international standard. PEPPOL is a proven approach used in over 32 countries to foster international trade. 

Australia and New Zealand (A-NZ) have adopted the PEPPOL framework for e-invoicing. A-NZ has developed local invoice specifications based on the PEPPOL standard. 

ATO is a PEPPOL Authority for the Australian Government, and will provide accreditation services for digital service providers.  

The NSW Department of Customer Service (DCS) led the delivery of a joint limited pilot testing the PEPPOL standard in collaboration with the Commonwealth Department of Human Services, ATO, access point vendors and select suppliers. 

Following the completion of this Pilot in November 2019, in 2020, DCS established a whole of government PEPPOL e-Invoicing service. This service was initially tested across one agency within DCS and then scaled across all agencies within DCS, Department of Premier and Cabinet (DPC) and NSW Treasury. By December 2020, 26 agencies across DCS, DPC and Treasury were enabled for e-Invoicing.

Few early adopter Suppliers were on-boarded for e-Invoicing.

16 additional agencies across Department of Communities and Justice went live with e-Invoicing using the whole of government e-Invoicing service in July 2021. 

A whole of government mandate for e-Invoicing across NSW Government agencies was announced in May 2021. As per this mandate, NSW Government agencies should be enabled for e-Invoicing by 01st January 2022.

It is anticipated that Small and Medium Enterprises (SME) Suppliers that utilise popular accounting softwares / financial management systems will soon have the ability to send and receive e-Invoices. These Suppliers can start benefitting from sending e-Invoices to NSW Government agencies.

An invoicing portal went live on Buy.NSW Supplier Hub in August 2021. The Suppliers that are registered on Buy.NSW Supplier Hub can now send invoices to the agencies that are enabled for e-Invoicing using the whole of government e-Invoicing service and track the status of those invoices.

To date, the whole of government e-Invoicing service has been enabled across 42 agencies that are part of the DCS, DPC, Treasury and Communities & Justice clusters. The list of these agencies can be found here:

https://suppliers.buy.nsw.gov.au/help/einvoicing#agencies

Agencies are now preparing for complying with the e-Invoicing mandate and Supplier on-boarding for e-Invoicing. 
 

More information

 

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