The ATO will not make e-Invoicing compulsory for all businesses, but believes its benefits will speak for itself as the accounting industry moves towards a totally digital environment.
Responding to a tax agent query on the ATO’s tax practitioners webcast, ATO director Mark Stockwell said e-Invoicing would not be made compulsory despite the government committing to moving forward with the initiative, with Treasury recently releasing a discussion paper consulting on the e-Invoicing governance arrangements between the Australian and New Zealand governments.
“We're not making it compulsory – obviously the benefits stack up for themselves and if people look at the next time they need to upgrade their software or subscription that comes through, then they’ll be asking their software provider if it is e-Invoicing enabled,” said Mr Stockwell.
“That allows them to reap the benefits when they are dealing with other businesses or government or whoever they are dealing with to get those time savings and more importantly, faster payments.”
Besides faster payment times, Mr Stockwell also believes e-Invoicing will see time savings and less mistakes from manual intervention.
“Some of the early trials at the moment are indicating that there are great benefits in getting quicker and faster payment times back from the payer,” he said.
“We’ve already heard of people saying we will pay you in 20 days if you do it through the e-Invoicing system. We think that through market pressure as this comes about and the masses join the initiative then we will see the time frame get smaller and smaller.
“There’s about $26 billion worth of unpaid invoices floating around at any point in time, so if we can speed that up from a 60, 90, 120-day pay cycle at the moment to a few days, it is going to make a massive difference to the Australian economy.”
Earlier this year, research from Deloitte Access Economics said e-Invoicing could result in economy-wide benefits of up to $28 billion over 10 years.