Top 10 Frequently Asked Questions about eInvoicing
- Posted by: David Watters
- Category: Best Practices, Peppol
We get a lot of questions about Peppol eInvoicing in talking with businesses across the region. We’ve compiled our Top Ten frequently asked questions on eInvoicing with a few links to further reading for you to read more.
What is eInvoicing?
Electronic invoicing (or e-invoicing) is the automated process of submitting and processing an invoice in a digital format.
Integrating the supplier’s accounts payable (AP) solution with the seller’s accounts receivable (AR) directly. Invoice information is exchanged electronically in an automated way – removing the need for any manual invoice data entry or validation of the invoice. Unlike the work required for PDF invoices.
Is emailing a pdf invoice eInvoicing?
No, whilst PDF invoicing is more efficient than paper processing it is not the same as eInvoicing. PDF invoicing still has a number of flaws that can be overcome by eInvoicing such as:
- Data capture is only semi-automated
- High risk of invoice fraud
- Low data accuracy
- High processing cost
How Does eInvoicing Work?
There are 4 simple steps with eInvoicing:
- Supplier generates an invoice and sends it to their Certified Access Point Provider
- Access Point Provider validates that the invoice data can be sent and finds the buyers Access Point Provider
- The buyers access point receives the validated invoice and processes it directly to the buyer’s accounts payable system
- The supplier’s invoice is automatically entered into the buyers system – no need for any manual data entry or validation.
What is Peppol?
Peppol is an acronym for Pan-European Public Procurement OnLine and is a globally recognised standard for sending e-invoices and e-orders used in a number of countries across the world for many years.
Australia and New Zealand announced the adoption of the Peppol standard for eInvoicing in February 2019.
The Peppol standard provides a secure, easy to implement and effective way to send and receive eInvoices.
What is Peppol Access Point?
A Peppol access point is what your system connects to so it can send and receive information to other businesses on the Network.
An Access Point acts like an air traffic controller for eInvoicing making sure that documents are sent and received correctly and to the right business. There are a number of access point providers across Australia and a growing number of accounting platforms are already connected.
Why Change from PDF invoicing to eInvoicing?
The table below outlines the main benefits of moving from PDF invoicing to eInvoicing.
Do I need to upgrade my Finance systems to adopt eInvoicing?
The over simplified answer is that you don’t need to upgrade your finance system to access to start eInvoicing, many Peppol Access Point providers offer integration services that can connect with your existing systems.
You may also be using a finance platform that is already eInvoicing Ready like Xero, MYOB, QuickBooks and Reckon. Speak to your platform provider or an Access Point to understand the best option for you.
Is eInvoicing only for Government suppliers?
There are a number of incentives for Government suppliers and mandates on Australian and state Government agencies around eInvoicing which contributes to the idea that eInvoicing is only for Government suppliers.
The truth is its not only for Government suppliers. The benefits can be achieved for any business to business transaction and also opens up the opportunity for cost effectively creating more connected supply chains with your suppliers.
How many businesses are already using eInvoicing?
At the time of writing there are over 12,000 businesses already registered to use eInvoicing and this is growing by around 100 businesses a day.
Consider that in 2021 there were only 200 you can see the considerable growth in businesses.
Google search interest in eInvoicing has also increased considerably over the last 12 months as well, so eInvoicing is certainly gaining popularity.
How much does eInvoicing costs?
Your existing financial platform may include eInvoicing in their existing subscription.
For those that do not, costs can vary from Access Point to Access Point. Broadly speaking our pricing is on a pay-as-you-go model and includes:
- A one off implementation fee
- A monthly subscription fee.
Speak to your platform provider or an Access Point to understand the best option for you.