Australia's E-invoicing Revolution: A Comprehensive Overview

Get real-time updates on e-invoicing, e-ordering, e-archiving, and stay compliant with the latest indirect tax regulations in the industry.

Ajith Kumar M
December 27, 2023
20 min

Sign up for E-Invoicing Newsletter

The latest industry news, technologies and resources.
We care about your data in our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Australia's Big Change in 2024: Easier Ways to Handle Business Bills

A Fresh Approach to Handling Bills

By 2024, Australian businesses are set for a significant shift in managing their billing processes. The Australian Government's initiative, known as the Business eInvoicing Right (BER), is paving the way for a streamlined method of sending and receiving bills electronically. This initiative revolves around the Peppol system, allowing companies to request electronic invoices from their business partners, significantly simplifying the billing process.

Overview of E-Invoicing Specifications in Australia

In Australia, the specific requirements and models for e-Invoicing vary depending on the nature of the business transaction:

  • E-Invoicing Models Used:
  • For Business-to-Government (B2G): The Peppol system is used.
  • For Business-to-Business (B2B): The model is Post Audit or BER, with Peppol being the standard used.
  • Infrastructure Requirements:
  • For B2G Transactions: Using Peppol is maybe Mandatory.
  • For B2B Transactions: There are no specific infrastructure requirements.
  • Formats of E-Invoicing:
  • In B2G: The mandatory format is Peppol BIS AU-NZ.
  • In B2B: There is no mandated format.
  • Issuing and Receiving E-Invoices:
  • There aren't formal requirements for issuing e-Invoices unless requested under the BER framework.
  • In B2G transactions, the use of Peppol is only partially implemented.
  • In B2B transactions, the consent of the buyer is necessary to receive e-Invoices.
  • Additional E-Invoicing Protocols:
  • Electronic Signatures: These are not required for e-Invoicing.
  • Archiving Period: E-Invoices should be kept for a period of five years.
  • Archiving Outside Australia: Storing e-Invoice records abroad is permissible but subject to certain conditions.

Government's Financial Push to Enhance E-Invoicing

In a move to solidify this transition, the Government is injecting $15.3 million into the initiative. This investment aims to seamlessly incorporate e-Invoicing into existing business payment methods and to educate businesses about its advantages. The funding will also support pilot projects to illustrate e-Invoicing's effectiveness and encourage its adoption in public sector agencies.

The Importance of E-Invoicing Mandate

E-Invoicing is not just a technological advancement; it’s a regulatory shift that ensures businesses across the board move towards more efficient, accurate, and timely billing processes. Small businesses stand to gain significantly from this mandate, as it promises to make payment processes quicker and reduce administrative hassles. Since July 2022, government agencies have been mandated to use e-Invoicing, setting a precedent for quicker payment processes and demonstrating the government's commitment to this digital shift.

Preparing for the E-Invoicing Mandate

For businesses, preparing for the e-Invoicing mandate involves several critical steps:

  1. Understanding Current Billing Practices: Assess how invoices are currently processed, including the frequency and method of handling them.
  2. Exploring E-Invoicing Solutions: Engage with software providers to determine if existing systems are compatible with e-Invoicing and to understand the potential benefits.
  3. Transitioning to E-Invoicing: Prepare internally for the change, update stakeholders and trading partners about the new requirements, and ensure necessary business details like ABN are correctly listed.
  4. Full Implementation: Start with pilot testing e-Invoicing with select partners before fully integrating it across all business operations.

The Broad Benefits of E-Invoicing

The shift to mandated e-Invoicing offers extensive benefits. It reduces the time spent on manual data entry, minimizes errors, and lowers the risk of invoice fraud. Moreover, it is more cost-effective than traditional paper or email invoicing methods. For businesses, this translates to faster payments and improved cash flow.

The Gradual Rollout of E-Invoicing Mandate

The implementation of the e-Invoicing mandate is being rolled out in stages. Large businesses are expected to comply by 2023, with medium and small businesses following in 2024 and 2025, respectively. This phased approach ensures a smoother transition for all businesses to adapt to the new system.

When it comes to choosing e-Invoicing, several straightforward factors come into play for businesses:

  1. Size of the Business: Bigger companies often say yes to e-Invoicing more than smaller ones. This is because they have a lot more bills to handle.
  2. What the Business Does: Companies that buy things are more likely to pick up e-Invoicing compared to those that sell things, simply because they deal with more bills.
  3. Current Computer Systems: If a business already has computer systems that work well with new technology, they're more likely to start using e-Invoicing. But, if they have an older system called EDI, they might not feel the need for e-Invoicing because it might seem like they're doubling up on technology.
  4. Costs to Start E-Invoicing: The money a business needs to spend on e-Invoicing depends on what they already have in place. It could be cheap, like just adding something to their current software, or it could cost more, like setting up new systems to work with Peppol, which is the e-Invoicing method used.
  5. The Power of Joining In: E-Invoicing works better when lots of businesses use it. The more companies that join in, the better it is for everyone. It's like a club - the more members, the better the club. If many businesses use e-Invoicing, others are likely to join too. But right now, not many Australian businesses use Peppol e-Invoicing, so others might not want to join just yet. It's a bit like waiting to see if others go to a party before deciding to go yourself.

A lot of companies that make accounting software for smaller businesses are getting ready to support Peppol e-Invoicing soon. This means that over half of these smaller businesses could be using e-Invoicing through their usual accounting software very soon.

The idea here is that if one business starts using e-Invoicing, it might encourage others to do the same. But since not many are using it right now in Australia, others might hold off and wait to see what happens. From what we've seen in other countries, even when the government starts using e-Invoicing, it can still take a while for everyone else to catch on.

Exploring Strategies to Enhance E-Invoicing Adoption in Australia

The Australian Government is actively seeking effective strategies to enhance the adoption of Peppol e-Invoicing across the private sector, understanding the significant impact it could have on businesses and the broader economy. Three primary options are being considered to accelerate this transition:

  1. A Phased Approach for All Businesses:
  2. Concept: This strategy proposes a gradual implementation of e-Invoicing requirements, initially focusing on large businesses before extending to all businesses. It does not aim to eliminate paper invoices but encourages digital alternatives.
  3. Advantages:
  4. Provides smaller businesses with additional time to prepare and plan for the adoption of e-Invoicing.
  5. Offers software and service providers sufficient time to develop and offer cost-effective, diverse solutions.
  6. Encourages small businesses to adopt e-Invoicing as the user base expands, creating a more robust digital network.
  7. Accelerates the overall adoption of e-Invoicing, leading to widespread benefits such as enhanced efficiency and digital innovation.
  8. Stimulates competition among software providers, potentially resulting in more affordable and innovative e-Invoicing solutions.
  9. Challenges:
  10. Imposes regulatory costs and operational challenges, particularly for businesses that handle fewer invoices or do not currently use advanced business software.
  11. The cost and resource investment needed for e-Invoicing adoption could be a hurdle for some businesses.
  12. The immediate focus on larger businesses might restrict the market to a limited number of ready-to-deploy software providers.
  13. Mandate for Large Businesses Only:
  14. This approach involves mandating e-Invoicing exclusively for larger enterprises, potentially defined by specific financial thresholds such as those in the Payment Times Reporting Act 2020 or the tax agent lodgement program. This would initially impact approximately 3,400 to 30,000 businesses across Australia.
  15. Non-Regulatory Encouragement:
  16. The government is also considering non-regulatory methods like promoting voluntary adherence to e-Invoicing standards and encouraging businesses to adopt e-Invoicing through awareness campaigns and incentives.

Each of these strategies aims to address the varying needs and capabilities of businesses in Australia, recognizing the importance of a flexible, inclusive approach to adopting new digital technologies. The phased approach, in particular, balances the urgency of digital transformation with the practical realities of business operations, ensuring a smoother transition into the future of digital invoicing.

Peppol: The Core of Australia’s E-Invoicing Strategy

The adoption of Peppol for e-Invoicing not only streamlines domestic transactions but also connects Australian businesses to an international electronic invoicing network. This interoperability is crucial for businesses engaging in global trade, providing a unified, efficient invoicing standard across borders.

Businesses can adopt Peppol e-Invoicing in several ways, depending on their size and current systems. Here's a brief explanation using the examples of Simon, a small business owner, and Jenny, a finance director at a large company:

For Small and Medium Businesses (Like Simon's):

  1. Using Online Accounting Software: If a business already uses online accounting software, it can be updated to support Peppol e-Invoicing. This update might be included in the existing subscription at no extra cost by the software provider.
  2. Using Desktop Accounting Software: Businesses using specific desktop accounting software can still adopt Peppol e-Invoicing by connecting with a Peppol access point through a service provider. This connection lets them send and receive e-Invoices.
  3. Manual Invoicing to E-Invoicing: For businesses still invoicing manually, they can either switch to e-Invoicing software that supports Peppol or use an online portal provided by a service provider. These options are often affordable.

For Medium and Large Businesses (Like Jenny's):

  1. Integrating with Electronic Data Interchange (EDI) Systems: Large businesses using EDI systems for data exchange, including invoicing, can integrate Peppol e-Invoicing with their existing system. This integration can be facilitated by a service provider.
  2. Adapting Enterprise Resource Planning (ERP) Systems: If a business uses an ERP system for managing various operations, this system can also be enabled for Peppol e-Invoicing. The existing ERP provider or a Peppol service provider can help with this process.

In essence, whether a business is small, medium, or large, there are tailored approaches to adopting Peppol e-Invoicing. The key is in understanding the current invoicing system and seeking the right guidance for a smooth transition to e-Invoicing.

Looking Forward to a Digitally Enabled Future

The mandatory adoption of e-Invoicing in Australia marks a significant step towards modernizing business operations. It reflects a strategic move towards enhancing efficiency, reducing administrative burdens, and embracing digital solutions. As businesses across Australia prepare for this mandate, they are not just complying with a new regulation but are participating in a digital evolution that promises a more streamlined, secure, and efficient future in business transactions.

What's Next?

Australia is moving forward with this big change in how businesses handle bills. It's all about making things simpler, faster, and safer. For businesses, this means less time spent on paperwork and more time growing and doing what they do best. The future looks bright with e-Invoicing, making business easier for everyone.

As we move deeper into 2024 and beyond, Australia's journey towards a fully integrated e-Invoicing environment is gaining momentum. This shift is not just about adopting new technology; it's about reimagining the way businesses operate, interact, and grow in a digital world.

Get in Touch with Us:

Have Questions or Need Assistance?

You can reach out to us directly via WhatsApp or call us at +91 8778237303. Our team is ready to provide you with the support and information you need to make your transition to e-Invoicing as smooth as possible.

Stay Updated via Email:

For further inquiries or detailed information, feel free to email us at info****. We’re committed to providing you with timely responses and valuable insights to help your business thrive in the evolving digital landscape.

Subscribe for Informative Content:

We also encourage you to subscribe to our YouTube channel for a wealth of informative content and regular updates. Our channel,, is a great resource for staying informed about the latest trends and practices in e-Invoicing and digital business solutions.

Embrace the future of e-Invoicing in Australia with Complyance, and take the first step towards a more efficient, secure, and competitive business environment.