Saving time and money by digitising and automating invoices are a given. Coupa’s Milos Lekovic, Senior Director Channels and Alliances ANZ, spoke to PASA to share three reasons why switching to electronic invoicing is a smart move, right now.
E-invoicing. The benefits are many. Less paper pushing and less human touch mean more visibility, more compliance, more savings across the organisation and – with the right solution set – up to 250% efficiency increases. The right e-invoicing solution integrated with your overall financial management systems can ensure efficient, accurate, and timely invoice processing as well as increased compliance. Paper reduction also provides significant environmental benefits.
So why aren’t we there yet, in terms of widespread adoption?
As of 2021, only about 10,000 of the more than two million businesses in Australia were registered for PEPPOL eInvoicing, the international industry standard.[1]
In 2022, two thirds of New Zealand businesses agreed that the benefits of e-invoicing were clear and compelling. However, it was still deemed necessary to explain that e-invoicing wasn’t as simple as emailing PDFs[2], so there’s clearly a way to go.
Switching to e-invoicing is a change management challenge that can be daunting to some. Globally, we know that lots of organisations tried to switch to e-invoicing in the past only to have process, technology or adoption let them down. Plus, until recently in Australia and New Zealand there hasn’t been a significant, unifying driver for this change.
But things have changed.
E-invoicing is now supported by internationally-recognised, standard technical specifications.
The Australian and New Zealand public sectors are now leading the way to broad e-invoicing adoption, and true electronic invoicing can be integrated into a company’s overall financial management systems.
It’s time to get on the e-invoicing bandwagon. Here’s why.
1. Government is on board
The New Zealand Government committed to Central Government agencies being capable of receiving e-invoices by 31st March 2022, and the Australian Government set a deadline for all Commonwealth Agencies to receive e-invoices by 1st July 2022.
Both Governments have adopted the internationally accepted PEPPOL interoperability framework for e-invoicing, setting a clear standard for consistency and a path forward for businesses in this region.
2. Payment Redirection Scams are on the Rise
Over AU$14 million in losses reported to Scamwatch in the first half of 2021 were attributed to payment redirection scams.[3] The average losses experienced by Australian businesses were reportedly five times higher year over year. With the right e-invoicing solution in place and integrated into your business spend management structure, invoice and false billing fraud can be eliminated.
Businesses must be able to ensure vendors are validated, bank account details matched, and security protocols passed before payment data is transmitted through the PEPPOL network. Real-time business spend monitoring can be deployed to monitor for, detect and flag spurious invoices and suspicious employee or supplier behaviour.
3. Rapid Digital Transformation has Readied Companies for this Change
Over the years, many e-invoicing projects failed miserably. Too many were focused on eliminating paper, which meant that scanning paper invoices with optical character recognition (OCR) software was considered an acceptable e-invoicing win. That’s not e-invoicing; it’s a digitised paper process that still involves pieces of paper. It doesn’t provide the benefits a true e-invoicing solution can accomplish, such as a closed audit trail supports compliance and speeds accurate reconciliation of “the books”.
Lack of whole-of-business collaboration has been another issue. This kind of change management project requires collaboration between accounts payable and procurement, plus buy-in from the chief procurement officer and the chief financial officer. The chief compliance officer should also be involved because in the end, they are accountable and responsible to protect the company. It must involve process change and modernisation, rather than simply digitising outdated processes. This requires clear and consistent communication across the business, and across the supplier ecosystem. Of course the technology solution(s) involved also must be able to be integrated into existing systems like your ERP, and they must be easy to use – or user adoption is at risk.
These days, there is a strong case for this kind of cross-company cooperation and suppliers are more likely to be open to this type of collaboration, as well.
- During the Covid-19 pandemic, businesses and governments have made rapid progress in terms of ramping up digital capabilities, services and experiences.
- Back-office business processes and teams like procurement and supply chain have risen to the occasion to help companies keep operating during these times of incredible disruption.
- Remote work necessitated even more digital transformation.
- As a result, customer, employee and partner expectations around digital capabilities and user experience are very high.
- Technology and infrastructure investments have been made, and there is much more return on investment to be realised.
All of this provides an excellent base from which to launch an e-invoicing change management project. In fact, it’s more likely to be part of an overall effort to gain visibility on spend and procurement, to leverage real-time data for decision-making, to modernise supply chain and associated risk management, and to support compliance and ESG objectives.
Accelerating e-Invoicing in Australia
More than 1.2 billion invoices are exchanged in Australia each year yet around 90 per cent still involve some manual processing.[4] If widespread adoption of electronic invoicing can be achieved, the estimated savings to our economy amounts to $28 billion over 10 years.
With this in mind, the Federal Government has announced a proposal to create a “Business eInvoicing Right” (BER) to legally obligate businesses to adopt and send e-invoices if one is requested by a trading partner. A staggered approach from July 1, 2023 has been proposed, and industry consultation is underway.
Keep an eye on these developments for information on which organisations must comply and what the fines for non-compliance will be. For now, there is time to get your change management process in gear to get ahead of new regulatory requirements and potential penalties.
[1] Australian Government – The Treasury, Supporting business adoption of electronic invoicing, 2021
[2] Ministry of Business, Innovation & Employment, New Zealand, 2022
[3] Australian Competition and Consumer Commission
[4]] Australian Government – The Treasury
