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eInvoicing and Peppol: Today Australia, tomorrow the world?

The Australian government recently announced a major push to make electronic invoicing (eInvoicing) mandatory for all Commonwealth agencies by July 1, 2022. This represents a major step forward in the strategy of the Australian and New Zealand governments to drive eInvoicing adoption, following their selection of Peppol as the platform to create the Trans-Tasman standard for eInvoicing. So, what does this latest announcement mean for businesses in Australia and around the world?

When they were launched in 2019, the Trans-Tasman standards for electronic invoicing were expected to save around AUS$30 billion over 10 years. Since then, the coronavirus pandemic has upended expectations globally, and the Prime Minister of Australia has clearly set this new announcement in the context of responding to COVID-19 through the government’s Digital Business Plan.

“The COVID-19 pandemic has accelerated the adoption of digital technologies by Australian businesses and consumers, which has enabled many to transform their operations and continue to trade through the crisis,” the prime minister’s office said. “Many businesses moved online quickly when the pandemic hit, undergoing a decade of change in months, finding new customers or new ways of doing things.”

The plan sets out to make Australia a leading digital economy and society, estimating that it will increase the country’s GDP by $6.4 billion a year by 2024. The eInvoicing mandate is a major plank of this plan, which is designed to encourage businesses to trade electronically with government and, increasingly, across their supply chains.

Australia boosts Peppol eInvoicing adoption

While this initiative begins with a mandate for business-to-government (B2G) trading, it’s expected to drive business-to-business (B2B) eInvoicing across Australia in the future.

Billentus, a specialist eInvoicing consulting firm, believes that this is a global trend, commenting, “The private sector was the main driver for market development in the first phase; however, it is now being increasingly pushed by governments… In this case, organizations have to exchange invoices via tax authorities, or to submit at least key invoice data in electronic format. This model may gradually achieve global adoption, and it is expected to become the dominant method worldwide for exchanging messages by 2025.”

Australia has some ground to make up. IDM has estimated that as many as one billion invoices are exchanged between businesses in Australia on an annual basis. However, only 10–15 percent of those invoices are eInvoices, with the rest remaining paper-based. In its E-Invoicing/E-Billing International Market Overview & Forecast for 2020–2021, Billentus places Australia and New Zealand’s eInvoicing capabilities in the “developing” category—which is below average and just above laggards.

There’s no doubt that this announcement will stimulate accelerated eInvoicing activity. And the Australian government is introducing incentives such as the Supplier Pay On-time or Pay Interest Policy, under which government agencies will need to start paying eInvoices within five days or pay interest on any late payments.

However, continuing to trade with government agencies might not be the only reason Australian businesses should look to connect to the Peppol network now.

The growth of Peppol

Since 2019, private companies and public institutions in Australia and New Zealand have been able to eInvoice through Peppol. It standardizes interoperability between service providers in terms of communication protocols, message types, data formats and more.

Using the Peppol network, businesses and governments can send and receive purchase orders, invoices, dispatch advice, purchase acknowledgements, and credit and debit notes all under a common standard, independent of where trading partners are located.

“Beyond e-invoicing, Peppol supports further message types, including e-orders,” Billentus notes. “Countries around the world are taking advantage of these capabilities as a logical step to standardize their initial e-invoicing implementations and mandates.”

Since its inception in the European Union, the Peppol standard has grown and has now been adopted by 34 countries worldwide. It is particularly strong in the ASEAN region. Australian businesses adopting Peppol today will be extremely well placed to extend their eInvoicing capabilities across ASEAN and beyond.

Billentus also points to a great deal of interoperability work presently being undertaken to align approaches between the Peppol standard and other e-trading standards—such as GS1, CIAT, ConnectONCE, EESPA and IMDA. This enhances the ability to trade digitally on a global basis.

OpenText: A global leader in Peppol services

OpenText™ Business Network was one of the first to be accredited by the Australian Peppol Authority, which is trusted to connect businesses with government agencies in Australia through the Peppol eInvoicing network.

To learn more about Peppol and eInvoicing, visit this eInvoicing website.

J. Naomi Skinner

As Senior Manager, Product Marketing for OpenText Business Network, Naomi leads product marketing efforts for B2B integration including EDI with OpenText Trading Grid™ Messaging Service and OpenText™ Freeway. With 15 years experience in marketing across various industries, Naomi enjoys translating complex concepts into simple terms.

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