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Almost half of small businesses would register for e-invoicing if government agencies and big suppliers used it, says Xero survey.
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Government ‘key’ to small-business e-invoicing uptake
15 August 2022
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Government agencies and big suppliers need to embrace e-invoicing to encourage small businesses to deploy it, Xero research has revealed.
The survey found almost 50 per cent of small businesses would take up the system if they started to receive e-invoices from telecommunications companies, office suppliers and large state bodies such as ASIC.
Xero’s general manager of product e-invoicing Simon Foster said e-invoicing brought benefits to small business but only if enough other organisations were using it.
“E-invoicing reduces administration and errors while accelerating payment for Australia’s small businesses, but they need lots of entities on the e-invoicing network to make registering worthwhile,” said Mr Foster.
“This is a terrific opportunity for governments to use the volume of invoices it sends in a way that helps cut red tape, speed up payment times and increase security for small businesses.
“Government can lead the way with registrations by replacing multi-step processes like ASIC annual review fees, ATO payment plan statements and state vehicle registration fees with e-invoices sent directly into the software of the small business, as we have seen in leading digital economies overseas.”
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Almost half the survey respondents said they would consider e-invoicing if government agencies took it up, and 46 per cent said they would probably register if their frequent big suppliers, such as telcos and Officeworks, adopted e-invoicing.
Xero said that e-invoicing had countless advantages over manual invoicing such as being more accurate, efficient and secure. But it found that almost two-thirds of small businesses were in the dark about e-invoicing.
The research also found that the main barriers to a small business adopting e-invoicing were not knowing enough about it (41 per cent) feeling as though the existing processes were fine (28 per cent) and not enough of their suppliers are using it (27 per cent).
Xero said e-invoicing made the exchange of invoices between accounting software automatic.
Instead of emailing a PDF, an e-invoice is sent directly to or from the accounting platform of another business or government department almost instantly via a secure Peppol e-invoicing network.
To encourage greater uptake of e-invoicing the ATO, along with key software providers such as Xero, Intuit QuickBooks and MYOB, is running a week of information events about the system.
“We hope that e-invoicing week will give small businesses access to subject matter experts so that they can understand the positive impact it could have on their invoicing processes,” said Mr Foster.
Xero’s research found that the biggest problem of manual invoicing was the time it took for businesses to get paid, with 63 per cent of respondents confirming if e-invoicing meant faster payment times they would register.
“While invoice management is key to healthy cash flow, it can be overwhelming for small business owners and sole traders to get on top of,” said Mr Foster.
“E-invoicing allows businesses and government departments to electronically exchange invoices between accounting software systems without the need for manual data entry.
“This has the potential to facilitate faster payment times, help boost cash flow, and reduce stress for small business owners.”
The survey conducted by Xero was completed by more than 500 Australian small businesses and sole traders addressing their difficulties with manual invoicing, their understanding of e-invoicing, and desire for its adoption.
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