eInvoicing and three ways it helps small business

Innovative small businesses are increasingly recognising the value of eInvoicing – the digital alternative to paper

Forget the papers piled in your outbox! Forget the PDF on your desktop!

The digital revolution is here

We’ve watched eInvoicing evolve into the critical customer tool it is for businesses today. Previously, electronic invoicing still required manual touchpoints. Today that process is far more streamlined and automated – a process allowing for the digital exchange of invoice information between suppliers and buyers.

Printing, posting or emailing paper-based or PDF invoices are no longer required and manually entering data or scanning invoices are a thing of the past. Many systems allow users to connect and transact almost immediately with others in the same network.

It’s important to be clear what eInvoicing is – and what it isn’t

It’s not simply emailing scanned or formatted invoices – systems which still require a manual touchpoint. Nor is it a system which automatically matches invoices to purchases. And finally, it can’t automatically pay invoices – although it does significantly speed up the process for users.

This transition can be tough for some businesses, particularly suppliers that have become accustomed to a certain way of work. Or even some who would consider themselves fully ‘digital’ after moving to a PDF or scan-based invoicing model. But the benefits of eInvoicing outweigh the change.

eInvoicing aims to standardise the way information is structured and exchanged between two or more parties. Furthermore, it can enable cross-border digital exchange of procurement documents providing rich actionable data.

In Australia, Peppol is used as the standard framework for eInvoicing. The system is an international eProcurement framework which aims to offer an efficient, accurate and secure way to transact.

Costs and cash flow

Perhaps the most significant benefit of eInvoicing is its impact on the bottom line for many SMEs. Gone are the financial and productivity costs of reams of paper or endless emails. Gone are the storage costs associated with keeping boxes of documents. And in many cases, SMEs get paid much quicker which can improve cash flow and lead to other benefits.

In Australia more than 1.2 billion invoices are exchanged every year, according to the Australian Taxation Office. Traditional invoices can cost up to $30 to process – while the same cost for eInvoicing can be as little as $10. The opportunity eInvoicing offers could save the economy $28 billion over the next ten years.

eInvoicing users enjoy reduced transaction times compared with other means. This helps them run their daily operations more efficiently at a time when SMEs need as much help as they can get.

COVID-19 was the tipping point many Australian businesses needed to finally take that next step into the digital.  That included payments – a critical part of the operations of all businesses, no matter their size.

“The most significant benefit of eInvoicing is its impact on the bottom line for many SMEs. Gone are the financial and productivity costs of reams of paper or endless emails.”

That work continues today. It’s never too late to go digital and the benefits are manyfold, especially for the crucial smaller business sector. With SMEs making up 32 per cent of Australia’s GDP and employing 41 per cent of Australia’s workforce, when SMEs grow, Australia grows.

We believe eInvoicing is an essential part of this growth — towards digitisation, cost efficiency and fraud reduction.

Safe, secure and sustainable

In our experience eInvoicing is a reliable and secure way of transmitting data. It is less error-prone and helps avoid common pitfalls associated with email security, such as scams and phishing.

eInvoicing systems operate through the use of ‘access points’, or approved service providers that aim to prevent, detect and mitigate fraud.

It’s also good for the planet as it saves on material costs and reduces environmental impacts through less printing and physical delivery.

Indeed research from PwC suggests 5,000 tonnes of carbon could be prevented from reaching the atmosphere by dispensing with paper invoices.

Define your success with Salisburys

Salisbury’s Business Coaching Program has been designed and developed to assist business owners with the support and guidance they need to achieve their own definition of success.

Tailored for each business, our program provides business owners with the support structure and key tools they need to achieve their goals while holding them accountable for achieving these goals in the agreed timeframes.

Read more here or call Salisbury’s Business Advice team in Albury on 02 6041 3014.

Salisbury Accountants named Australian Accounting Awards finalist

Source: ANZ Bluenotes