Business and government leaders say a huge rise in invoicing fraud and slow payments is being driven in part by Australian businesses’ slow uptake of e-Invoicing.
The ATO, is calling for a faster uptake sending digital invoices, with data suggesting that as many as 89 per cent of small businesses use paper-based or PDF invoices, with errors common across the board.
Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, explained at a recent business event hosted by e-Invoicing tech developers OZEDI that fraud and slow payment times are a growing issue for small business and that e-Invoicing would help address this.
“The great thing about e-Invoicing is there is no cheque and there is no mail. We hear dreadful stories about invoices being intercepted (online or via mail),” Ms Carnell said.
“That can’t happen with e-Invoicing. We also know that digitised small business are 30 per cent more likely to be growing. And by the middle of 2021 the majority of software packages small business use will be e-Invoice enabled.”
Similarly, Martin Mane, the ATO’s assistant commissioner, celebrated the pluses of moving digital.
“For many business, there will be a whole lot of time that e-Invoicing will save as it will cut back data entry. We think it’s going to be a massive benefit for the entire Australian economy,” Mr Mane said.
Brady Dever, partner at PwC, revealed that the accounting giant is talking with companies inside and outside the ASX 200 about the shift to e-Invoicing, with it being the “perfect antidote” to closing the gap between invoicing date and payment received.
He warned though that to achieve a “network effect” in having a range of businesses adopt e-Invoicing, traditional methods may have to be no longer accepted by business and government.
“There are multiple ways you can send invoices today. We have to start thinking about how we take some of those other channels away,” Mr Dever said.
Currently up to 20 per cent of paper-based or PDF invoices are being sent to the wrong person and over 30 per cent contain the wrong information on them, further delaying payment.