'A win-win': Australia moving closer to killing off paper invoicesSeptember 02 2019
Australia is poised to ditch paper invoices for good and tax experts say the move will help business compliance and growth, provided that business owners are informed about digital alternatives.
On Tuesday, the Australian Taxation Office pointed to the evolution of single-touch payroll and e-invoicing as key measures to improve business growth, saying in its small business tax gap report these tools would offer "a more seamless experience for small business taxpayers".
The federal government currently has legislation up for public consultation to cement a national framework for e-invoicing. Australia and New Zealand have been working on a trans-Tasman standard for electronic invoices and the new laws would let Australia move towards a standard e-invoicing approach for dealing with other countries.
Minister for Housing and Assistant Treasurer Michael Sukkar said the government was making good progress towards adopting the 'Pan European Public Procurement Online' framework for invoicing and that Australian government departments would be using this.
Once implemented, the new invoicing standard would help with the government's 2018 commitment to pay small businesses in five days if they sign up to digital invoicing.
Known as "PEPPOL", the approach lets governments and businesses securely send invoices according to a strict set of technical standards.
"Australian Government agencies will be using the PEPPOL framework for e-Invoicing. Agencies will commence implementation of PEPPOL compatible e-Invoicing once the local requirements are finalised and the Australian PEPPOL Authority is established," he said.
In 2018, a statement from Prime Minister Scott Morrison and New Zealand prime minister Jacinda Ardern estimated the shift to e-invoicing would save the two nations $30 billion over the next decade.
However, those working in companies which facilitate digital invoices say many businesses still don't know that digital invoicing was an option.
"Other countries realise they are behind with technology and so are doing something about it. Australia is behind and doesn't realise it. Most business owners are slow to change from what they currently do," chief executive of digital invoice startup Link4, Robin Sands, said.
The startup has seen interest from a number of overseas clients, including in Singapore, though many Australian businesses were reluctant to change or unaware the options were available, Mr Sands said.
Chartered Accountants Australia and New Zealand tax leader Michael Croker said digital invoicing has been embraced across the world and is a win-win for both businesses and tax regulators.
He said while small businesses had traditionally been concerned about slow payment times, bigger businesses and governments were now increasingly streamlining their processes.
"Although big business is still a bit of a laggard, other major corporates are saying, 'please, e-invoicing is a way to go," he said.
Tax regulators have championed the move because improvements to cashflow can help reduce lags in paying tax obligations, he said.
In a note to businesses in July, the Australian Taxation Office estimated that 20 per cent of Australia's $26 billion worth of annual invoices are paid late due to invoices having mistakes or being sent to the wrong person thanks to manual data entry.
"The ATO are saying look, we’re just trying to help you streamline it. If your cashflow is improved, it’s highly likely you’ll have the funds necessary to pay your BAS," Mr Croker said.
Koehn, E. (2019, August 28). 'A win-win': Australia moving closer to killing off paper invoices. Retrieved from https://www.smh.com.au/business/small-business/a-win-win-australia-moving-closer-to-killing-off-paper-invoices-20190827-p52l3h.html