Gone are the days when invoicing meant lots of paperwork and many hours spent entering data. Advances in digital tech have ushered in the era of e-invoicing, which enables businesses to send invoices directly from one organisation’s financial systems to another.
More SMEs are going electronic
Given the capacity of e-invoicing to reduce costs and boost productivity, it’s little wonder that the shift from paper continues to gain momentum.
While the move to e-invoicing has been happening for some time, Simeon Duncan, Intuit’s senior manager of International Corporate Affairs, says small businesses are increasingly appreciating the case for change – especially those with fewer than four employees.
A growing number of SMEs are using it as a quick and cost-effective way to ensure invoices are approved, processed and paid in an accurate and timely fashion.
Advantages of e-invoicing
A key plus of e-invoicing is not having to manually handle invoices, which slashes the processing time. There is no need to manually scan or rekey invoices into financial systems, chase missing information on paper files or make corrections.
“Despite the advances of the digital era, a lot of business process still involves friction – particularly an antiquated process such as keying in invoices,” Duncan explains.
“So, the electronic invoices are all about that automated exchange of invoice information directly from the buyer to the suppliers’ account systems. It reduces the time taken to enter data, but also the receiver can see in their system what invoices have been received, check the line items, and add them into the system for payment to remove that friction.”
“Electronic invoices are all about that automated exchange of invoice information directly from the buyer to the suppliers’ account systems.”
Another advantage of going electronic is increased security for payers. While manual invoicing leaves organisations exposed to the risk of paying fraudulent invoices, Duncan says e-invoicing has built-in checks and balances to mitigate threats from criminal actors.
“E-invoicing significantly reduces the risk of paying fraudulent invoices because all Australian businesses using the Pan-European Public Procurement Online (PEPPOL) network are registered and identified using their ABN. This is important for all organisations given the high cost associated with fraud.”
Faster payment times
What’s more, shifting to e-invoicing has been shown to result in faster payment times, which Duncan describes as “one of the biggest benefits associated with e-invoicing”.
“Sending invoices straight from one financial system to another removes the opportunity for them to get lost in the post, overlooked or inadvertently missed in an inbox.
“The flow-on is there should be no factor holding up payment because with e-invoicing you can see when the invoice has been received. There can be no excuses from the other end.”
Part of a wider move to digital
The transition from paper invoices is likely to accelerate, with Duncan pointing to the Australian government’s May announcement of A$15.3 million to help businesses reduce costs and lift productivity, including via electronic invoicing.
The government, he says, sees e-invoicing as part of a wider shift to digital services.
“The widespread use of e-invoicing has the potential to simplify processes and help small businesses get paid faster, and it’s part of an important transition that will reap benefits right across the economy,” Duncan says.
Find out more
Visit https://quickbooks.intuit.com/au/partners/ca-anz/ to learn more about e-invoicing,