Take a moment and think back to the last invoice you sent out from your business. Whether it was a paper copy or a PDF, mailed or emailed by yourself or your finance department, it came with a price tag. In fact, the average invoice will cost a total of between $27-$30 to process and finalize, considering the time spent entering information and processing payment. This year, something new is on the way. E-invoicing is a system where an invoice can be transferred directly from one financial management system (for example, QuickBooks) to another system (say, Xero) immediately.
If you’re wondering why you would adopt this practice – especially if your current invoicing system is working well – here are a few things to consider:
- E-invoicing is becoming mandatory in Australia.
Propelled by the goal of preventing tax evasion, mandatory e-invoicing legislation is on the rise globally, driving the transition from paper to electronic invoicing and archiving. Many countries around the globe are considering, or have already determined, that e-invoicing is crucial. In Australia, moving to e-invoicing is no longer an option for businesses, it is becoming an obligation.
- By using e-invoicing, you save time and money for your business.
As mentioned earlier, there is a measurable cost to processing invoices and dealing with additional paperwork at tax time. E-invoicing can mean cost savings – and time savings – for your business.
- Adopting e-invoicing allows you to cut down on paper or server storage.
The ATO has confirmed that an e-invoice is all you’ll be required to retain for tax purposes. Switching over to e-invoicing means you can stop stacking paperwork in boxes, scanning invoices, and e-filing endless folders on your server.
- E-invoicing gets you paid faster.
With an instantaneous transfer, your clients are likely to pay their invoices much faster when it’s so convenient. Also, as part of an incentive to switch to e-invoicing, the Australian Government is now paying any e-invoices within 5 business days, including interest on any late payments.
- Security and reliability go through the roof.
The networks used for e-invoicing are more secure than traditional email channels, meaning safety is assured. In addition, the visibility of the invoice is limited to the issuer and the client, reducing any chance of fraudulent invoices.
Looking at e-invoicing holistically, the big picture indicates that switching to this system might be the cost-saving, time-saving, streamlined change your business needs for 2021.
How can Halkin Business Partners help?
With the rollout of E-Invoicing in Australia, our expert tax and financial advisers will guide and assist you with making the switch to e-invoicing smoothly and seamlessly. We are following the legislation closely and will be updating our clients on the necessary information.