All New South Wales government agencies will be required to adopt e-invoicing for goods and services worth up to $1 million, from January 1, 2022.
Minister for digital and customer service Victor Dominello on Tuesday said payment times, paperwork, manual errors and a ‘significant amount’ of money would be reduced as a result of the new rule.
“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,” he 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. This means the government can spend more time helping customers and businesses can focus on their operations.”
Under the state government’s Faster Payments Policy, departments must pay eligible small businesses within five business days for their goods or services.
New South Wales Minister for Finance and Small Business Damien Tudehope said mandated e-invoicing would enhance the payments policy by “ensuring that the accounts payable teams in government agencies receive invoices within minutes”.
“One of the biggest issues for small businesses across NSW is cashflow and we want to take steps to ensure that properly rendered invoices reach and are actioned by the right teams as quickly as possible,” he said.
E-invoicing rates in Australia range from 15% for small businesses to 23% for large businesses, Dominello and Tudehope noted, compared to 28% across Europe and 40% in Denmark and Finland.
While the state government’s Digital Restart Fund has allocated funding to set up an e-invoicing service, the ministers noted that suppliers would be able to continue to invoice government agencies through existing means if they so choose.
At the federal level, all government agencies will be required to adopt e-invoicing by July this year. The recent federal budget also committed $15.3 million help SMEs build their digital capacity and drive business uptake of e-invoicing.
This article was first published by The Mandarin.