Electronic or e-invoicing is not a new concept. The idea has been making waves, especially for a couple of years because of the push for its implementation by the government. One of the first as well as the most frequently asked questions regarding e-invoices is whether or not it is legitimate.
Many people are still skeptical of adopting it because they are under the impression that it might not be legitimate.
Is it legitimate then?
Not only is electronic invoicing legitimate but it has become a legal requirement in many countries including Australia.
The reason why many would question its legitimacy is that they think it is not safe. The Australian government has given the responsibility of its security to the Peppol network. This network is in charge of the safe transfer of the digital invoices between the relevant parties. While the Australian Taxation Office (ATO) operates the Australian Peppol Authority, all the e-invoices are highly secure and the former does not receive any copy of the digital invoices.
The driving force behind e-invoicing
The government is taking every measure to ensure that e-invoicing gradually replaces paper invoices. In fact, the Australian government allocated ‘’$15.3 million to drive uptake of e-invoicing’’ as per last year’s media release.
The idea behind streamlining the invoicing process using digital platforms is to counter a lot of transactions that go unchecked because of paper invoicing that is comparatively easy to hide or fake. It aims to reduce the time spent on chasing the payments and would lead to more efficient financial processing.
This is especially beneficial for small businesses as it will help them streamline their bookkeeping process as well as get them paid faster. There will just be a single step for receiving and sending invoices which will save them time as well as a lot of bucks.
Key considerations for its adoption
If you are a small to medium-sized business, you might be thinking if you are all prepared to adopt electronic invoicing.
Adopting electronic invoicing is not a hard nut to crack. Businesses just need to assess if they have the right software system to get connected to Peppol for digital transfers. ATO even has an assessment questionnaire to help businesses recognize their gaps. The technical infrastructure for the Peppol channel is important as it is the platform through which the e-invoices will be sent and received.
There are various software solutions that enable eInvoices and can integrate well with Peppol authority. However, when choosing one for your business it is important to consider the invoice requirements of your business for receiving and sending them.
It is also important to assess if the eInvoices will affect your existing processes or workflows. ATO has a list of questions businesses need to address in order to become eInvoice enabled. Once a business is through them all, the adoption should come smoothly.
E-invoicing could be a huge game-changer as it can mitigate the shadow economy making the transactional processes more transparent.
With the way e-invoicing is becoming increasingly popular, paper invoicing will soon become a thing of the past.