What is e-invoicing?

Over 1.2 billion Business to Business (B2B) and Business to Government (B2G) invoices are exchanged annually in Australia, the majority of those invoices are sent either as paper invoices or as PDF invoices attached to an email. These are costly ways to process invoices with manual data entry or validation usually required. The Australia Tax Office (ATO) estimate that:

  • Average invoice processing cost for a paper invoice is $30.87
  • Average invoice processing cost for a PDF invoice is $27.67

The majority of the costs are based on the usual manual work required to enter the invoice data into your systems and process it for approval and payment.

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 solution, for exchanging invoice information electronically in an automated way – removing the need for any manual data entry or validation of the invoice. This process often includes validation of invoice information, acknowledgement of receipts and some specific business rules.

Using e-invoicing to connect businesses and enabling them to trade electronically is a modern, innovative solution to help businesses become more efficient and effective. The ATO estimates that businesses shifting to e-invoicing can reduce the cost of processing an invoice down to $9.18. The NSW Government estimated a shared saving between suppliers and the NSW government of $71m based on the 4.2 million invoices across NSW Government in 2019. So the business benefits are pretty hefty when e-invoicing is adopted between buyers and sellers.

Is emailing PDF invoices e-invoicing?

No, whilst PDF invoicing is more efficient than paper processing it still has a number of flaws that can be overcome by true e-invoicing. At a simple level, PDF invoices are where the PDF file acts as a carrier for the invoice data and a way for people to visualise the content of the PDF. This means instead of supplier needing to print an invoice from their accounting system, pop it in an envelope and mail it to their customer, most modern accounting systems can produce a PDF and have it emailed automatically – most suppliers already do this hence the misconception that they are already “doing e-invoicing”.

PDF invoicing, whilst more effective and efficient than paper, carries with it some big inherent risks and issues that business should be mindful of.

  • Data capture is only semi-automated – depending on your OCR solution there is always a need for some manual checks and validation of the data on PDF invoices
  • High risk of invoice fraud – PDF invoices can easily be intercepted mid-flight and manipulated before being received by the organisation. Email compromise scams like this are on the rise, a topic we wrote about recently.
  • Low data accuracy – as the data captured is only semi-automated the manually entered data is prone to error and with typical OCR data capture accuracy rates at around 80%, this manual data entry can really add up quickly.
  • High processing cost – based on the work required the ATO estimates that PDF invoices can cost a business up to $27 per invoice to process, a cost that adds up very quickly if you process a large number of invoices.

Peppol e-invoicing

The business case is clear for e-invoicing when you consider the risks with PDF invoicing, the question is how to get started. The Australian, New Zealand and Singaporean governments have all agreed on adopting the Peppol framework for e-invoicing, providing a secure, easy to implement and effective way to send and receive Peppol e-invoices.

How can we get started with Peppol e-invoicing?

Enabling Peppol e-invoicing for your organisation should be simple, value driven and cost effective. We offer a range of different solutions to get your business ready for Peppol e-invoicing. If you’re considering Peppol e-invoicing, why not speak with our experts today?

would you like to know more?

how can we help you?

Contact us today, our team will be happy to assist you.

Trusted by leading businesses across the region

We are source to pay automation experts with over 30 years of experience across the team and have been trusted partners of a number of leading organisations to deliver accounts payable automation and source pay solutions across APAC.

why our customers choose us

Our Focus on Business Value

Value is ultimately a common vision of what success looks like. It’s visibility. It’s savings. It’s user adoption. It’s compliance. It’s best practice. It’s all of that combined. It’s what we define, together, as our shared objective. Value is what we measure, what we strive for.

Partnership Approach

To help drive value, we work with you in an open and transparent way, we position ourselves alongside you every step of the way actively sharing both the risk and benefits with you – ensuring that we succeed together. That’s what we call partnership.

Source to Pay Expertise

Our team has over 30 year’s experience across successful Source to Pay transformations across the globe and have worked with some of the leading companies in a number of industries. We provide invaluable insights on how to ensure you are successful.