Prospa is now open on Saturdays. Call our team between 10am & 4pm to discuss your loan.

Home » Blog » How E-invoicing Will Transform How You Get Paid

How e-invoicing will transform how you get paid

E-invoicing
No-one really loves doing the paperwork that is essential to keeping a small business running, but an emerging technology called e-invoicing promises to do more than cut down on admin – it should help you get paid faster too.

Currently, the vast majority of invoices are sent and processed manually. A supplier creates an invoice and then sends it – usually via email or post – to the customer, who then has to re-enter all the invoice information into their system before they can pay it.

Not only does this significantly slow the payment process down, it also introduces the opportunity for errors to creep in, risking further delays. In fact, the ATO estimates that of all late payments, more than one in five are due to errors on invoices.

E-invoicing, or online invoicing, promises to put an end to the double-handling of data, via the introduction of a standard called Peppol, which means that most business accounting software programs can talk directly to each other, slashing how much data entry and admin work needs to be done.

This video explains how e-invoicing works:

“While businesses will still need to apply their internal quality assurance processes, e-invoicing will provide opportunities for business owners to focus on growing their business, rather than spending time on labour intensive and costly administrative processes,” states the ATO, which predicts that e-invoicing will cut the business costs of processing invoices and payments by two-thirds.

To help speed adoption, the Federal Government has pledged to pay small businesses using the system within five days, or pay interest on any late payments. This will apply to Federal Government contracts of up to $1 million where both the government buyer and lead supplier are using Peppol-equipped systems.

The good news is that a lot of business accounting software already offers e-invoicing. To see if yours does, contact your software provider to find out what you need to do get started.

Sources:
www.ato.gov.au/business/e-invoicing/benefits-of-e-invoicing
www.financeminister.gov.au/media-release/2019/11/07/government-pay-e-invoices-within-five-days

If unpaid invoices are putting strain on your business, talk to a Prospa small business lending specialist about how a line of credit could help you better manage cash flow fluctuations.


The information in this post is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

Keep reading

Infographic: End of financial year 2019-20 checklist

16 April 2020 | 1 min read

In a normal year, it pays to be organised when it comes to preparing your end of financial year tax obligations, but this year it may be particularly important.

View more

An overview for small businesses of the government’s economic stimulus packages

25 March 2020 | 4 min read

The Federal Government has unveiled economic support measures to reduce the economic impact of coronavirus. We breakdown those aimed at small business.

View more

8 strategies you could use to manage business cash flow during COVID-19

23 March 2020 | 7 min read

The coronavirus crisis has put the squeeze on many small businesses with unprecedented speed. Here are some ways that might help protect your cash flow.

View more

Subscribe to the Prospa Blog

Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.