eInvoicing is here! Well, it’s starting to roll out across New Zealand anyway.
What is it?
It’s designed to make exchanging invoices more efficient between organisations, be they small, medium or large businesses or government departments. eInvoicing automates and simplifies the sending and processing of invoices via the direct exchange of invoice information between buyers’ and suppliers’ financial systems – even if these systems are different.
It sounds kind of complicated, but we promise it isn't.
This new way of invoicing has heaps of benefits, including a reduced risk of cyber hacking, cutting admin time, speeding up payments and improving the cashflow of businesses that use it.
So, let’s look into eInvoicing in greater detail to see if it’s right for your business.
eInvoicing: Here’s The What, How And Benefits For You
What Is eInvoicing?
eInvoicing is the exchange of invoice information between the accounting software (like Xero) of businesses and government agencies for efficient, secure invoicing.
This exchange of information happens through a standard eInvoicing network that allows different systems to talk to each other using an international standard, called Peppol. eInvoices are sent between accounting systems via Peppol’s secure global public network – rather than via email.
The journey of an eInvoice:
A supplier’s financial system generates an invoice for the buyer.
The invoice information passes through the eInvoicing network, where it validates information like the NZ Business Number (NZBN).
The invoice information is passed to the buyer’s financial system where it is reconciled against purchase details and is ready to be paid. (The NZBN is used to ensure the eInvoice is directed to the right buyer.)
Is eInvoicing Right For Me?
If you like less hassle and more cash, then eInvoicing can help your business run more efficiently. It enables low touch, error free processes that the current practice of emailing a PDF or scanning a paper invoice can’t offer.
With eInvoicing, you’ll no longer need to generate paper-based or PDF invoices that have to be printed, posted or emailed. Buyers no longer need to manually input invoice data, therefore reducing their costs, the risk of errors and making reconciliation and coding easier. This improves accuracy and security, reduces process time and speeds up payments.
Adopt eInvoicing and enjoy benefits to your business, like:
● Faster payment and improved cash flow
● Less admin work
● Reduced processing costs
● Direct and secure information
● Universal connection
● Improved financial visibility
The best news? You’ll likely save money in the long term. It’s estimated to cost less than $10 to process an eInvoice. This could amount to savings of $18.00 per paper invoice and $16.00 per PDF invoice.
Sign Me Up!
Are you ready to start eInvoicing? The Government is leading the way by committing to implementing eInvoicing across all its central agencies, with half being able to receive eInvoices since March 2022 and the rest to follow shortly.
Across New Zealand, thousands of small businesses have already enabled eInvoicing and are ready to send eInvoices. Many are already asking their clients if they’re ready to receive them. So, if you’re not yet eInvoicing, now’s the time to get started.
It’s easy and affordable to start eInvoicing. Most accounting and finance software, including Xero, provides free or low-cost eInvoicing capability.
Step-by-step Guide To eInvoicing
So, what do you need to do to get started?
First, you’ll need to register to receive eInvoices from other businesses in Xero. You’ll be set up in just a few clicks and it’s a free service. Via Xero, you’ll be registered with the global public electronic invoice processing network, Peppol. Your business name, participant ID and registration date will be available through the Peppol directory.
Then, you’ll receive eInvoices automatically from suppliers – with no need for manual data entry. You’ll be able to view the eInvoices in the Xero app or on your laptop as draft bills ready for approval.
To send an eInvoice, your recipient needs to be using eInvoicing software that’s connected to the public Peppol network, too – check for them in the Peppol directory.
If you’d like support in getting started with eInvoicing, talk to the Xero experts at CornerStone Bookkeeping. We’ll have you up and running quickly!