When the New South Wales government’s e-invoicing becomes mandatory for all government agencies from 1 January 2022, it will bring a host of benefits for small and medium businesses when sending and receiving invoices to the government.
Minister for Digital and Minister for Customer Service Victor Dominello said the mandate will help reduce payment times, paperwork and manual errors, and save buyers and suppliers a significant amount of money.
“This is great news for SMEs who are the backbone of the economy. There is an estimated shared saving of around $20 each time e-invoicing replaces a paper invoice and around $17 each time it replaces a PDF invoice,” Mr Dominello said.
“Based on the 4.2 million invoices across NSW government in 2019, a shared saving between the suppliers and NSW government is estimated to be $71 million.”
The mandate will apply to the delivery of goods and services up to $1 million in value.
“This means the government can spend more time helping customers, and businesses can focus on their operations,” Mr Dominello continued.
The NSW government is leading the charge to introduce and promote the uptake of e-invoicing across Australia.
The funding was allocated through the Digital Restart Fund to set up an e-invoicing service.
The government says research shows e-invoicing rates in Australia span from 15 per cent for small businesses to 23 per cent for large businesses, compared with 28 per cent across Europe and 40 per cent in Denmark and Finland.
Minister for Finance and Small Business Damien Tudehope said e-invoicing would improve current interactions between SMEs and the government.
“This mandate will enhance the government’s existing Faster Payment Terms Policy, by ensuring that the accounts payable teams in government agencies receive invoices within minutes, enabling payment to eligible small businesses within five business days,” Mr Tudehope said.
“One of the biggest issues for small businesses across NSW is cash flow, and we want to take steps to ensure that properly rendered invoices reach and are actioned by the right teams as quickly as possible.”
Suppliers will still have a choice though. They can choose to use e-invoicing or continue to invoice government agencies through their current processes.