According to Peter Strong, Chief Executive of the Council of Small Business Organisations of Australia (COSBOA), a policy group which advocates for more than one million small businesses, e-invoicing is a key step in the digital transformation of accounts payable. It can make the lives of business owners easier by securely modernising and automating their financial systems and making trade simpler.
E-invoicing can address one of the biggest pain points of small and medium-sized businesses: long and late payment times. Small businesses tend to have smaller cash reserves and rely heavily on timely payments to maintain cash flow. Payment delays or long wait times create additional cost burdens for these businesses, since they must spend precious resources on resolving payment time issues or toughing it out until the payment arrives. This hinders their ability to grow and reinvest in the business.
From a holistic perspective, late payments create bottlenecks in the supply chain, slowing the circulation of money in the system. In severe cases, they can even lead to bankruptcy or business failure.
Saving time and cutting down on admin are areas where e-invoicing also shines. Traditional invoicing methods are time- and labour-intensive; invoices need to be printed, stored, filed and emailed. At their end, buyers must manually sort, scan and re-type the invoice into their own systems. For a business that deals in a high volume of invoices this way, the costs of paper and printing alone can be significant. E-invoicing can remove these costs and automate the whole process while reducing the risk of errors or missed invoices.
Environmentally friendly, e-invoicing eliminates paper, uses less energy and resources, and minimises the need for physical storage space, which are important sustainability priorities for many Australian businesses and their customers.
E-invoicing is also more secure. PEPPOL e-invoicing usually has electronic validation built in to reduce errors and lower the risk of email scams and ransomware attacks. The PEPPOL network also has an in-built database of addresses to ensure accurate delivery of invoices to the correct buyers.
Some enterprises use their own electronic data interchange (EDI) networks to handle transactions, so they are already benefiting from the digital transmission of invoices. But these proprietary systems can make it difficult for smaller, local businesses to trade with them. PEPPOL invoicing makes it easier for small businesses to use their own software or system to send and receive e-invoices from these enterprises, regardless of the systems they use. Since PEPPOL can also be used together with existing EDI systems, enterprises usually would not need to do much to be PEPPOL-compatible.
The digitisation of book-keeping and accounting functions also means there will be less of a hassle during tax season, with instantly verifiable records available on-demand.