The Australian Taxation Office (ATO) says there are 1.2 billion invoices sent in Australia every year, and with 89 per cent of these being sent by SMEs, invoice management can be a time-consuming process. Add to this the associated risks of human error when sending invoices, the rise in email scams and time spent chasing late payments, and invoicing can be a major headache.
Enter: eInvoicing.
eInvoicing is a sophisticated yet easy to administer process which automates and streamlines the way you manage your invoices. It connects both parties’ invoicing systems for immediate payment and easy, secure processing.
Last week’s ATO’s eInvoicing Week was designed to help businesses understand the benefits of eInvoicing. It takes no more than a couple of hours to explore and set up, and with recent MYOB research finding that more than four in five SMEs (82 per cent) believe they could save up to 20 hours each week by switching to eInvoicing, there’s a powerful argument for adoption.
Here are five steps to get ready to adopt eInvoicing for your small business.
1. Know your numbers
First step is to take a pulse check of your current invoicing systems and do some number-crunching. Think about how many invoices you currently send out each month, how many suppliers you have in your system, how many hours you currently spend on invoicing, and who looks after invoicing.
Once you have these answers, you’ll be armed with the right information to be ready for eInvoicing. If you’re the kind of SME that spends over ten hours a week on invoicing, saving even five of these hours equates to 260 hours, or ten full days, each year you could spend on other activities that will grow your business.
2. Consider your digital transformation
Think about where you are on your digital transformation journey as a business. Many SMEs were motivated by the COVID-19 pandemic to take further steps along the path to digital transformation, so if this rings true for you, eInvoicing is a natural progression.
But if you’re a business where processes still rely on paper files and excel sheets, you might need some professional help to get yourself up and running with eInvoicing.
3. Be prepared to onboard your partners
eInvoicing relies on your business as well as your suppliers and partners being onboard, in order for the system to work effectively.
So, be prepared to communicate your transition to eInvoicing with your partners, prioritising the businesses or suppliers you create the highest volume of invoices for each month. For companies that need to go beyond their existing platform eInvoicing capabilities, there are tools such as MessageXchange, that can help you easily talk to your suppliers, government, banks and logistics to make this transition easy for everyone.
4. Understand the benefits of eInvoicing for business security
Sending invoices by email leaves you open to email scams, fraud and ransomware attacks. Can you afford a breach?
eInvoicing reduces this risk, thanks to using a system that is far more direct and secure than email.
5. Know how the data can make a difference
eInvoicing means more accurate and complete data for your business, and empowers you to make more informed decisions, and have more control over your cash flow.
How could this data make a difference to your business?
Be on the front foot
eInvoicing will soon be the standard, the ATO has already mandated that all Australian Federal Government agencies must now use it (as of July 2022). And it’s not surprising, when research shows there is a $20 cost saving to businesses every time a paper invoice is replaced by an eInvoice[1].
So, while there’s not yet a mandate for Australian businesses, it pays to be on the front foot and ready to take advantage of the efficiencies of eInvoicing. What could your business do with an extra 20 hours each week?
[1] Deloitte Access Economics 2016
