What is e-Invoicing?

What is e-Invoicing?

e-Invoicing is the next revolution

e-Invoicing (sometimes known as electronic invoicing) is the automated exchange of standardised structured invoice data directly between senders and receivers software across a highly secure, governed network. The use of structured data allows it to be interpreted by any invoicing software enabled for e-Invoicing, dramatically increasing the automation and security of the process and at the same time lowering the cost..

By sending directly from software to software it removes the need for creating paper-based or PDF invoices, minimising manual data entry, reducing errors allowing you to boost your processing time significantly. In the simplest terms, e-Invoicing allows a seller to create and send an invoice from their software, through the e-Invoicing network directly into the buyers software.

With a many organisations throughout the world already using e-Invoicing, including the Australian and New Zealand governments, now is the time to enable e-Invoicing.

So how does it all work?

How does it work?

The simple diagram to the left illustrates how e-Invoicing works via a Peppol 4 corner model:

  • Corner One is the Supplier (Sender of the invoice)
  • Corners Two and Three are the Access Points
  • Corner Four is the Customer (Receiver of the invoice)

e-Invoicing allows you to connect once and transact to everyone on the network including Australia, New Zealand and Europe.

Peppol and Access Points, what are they?

Peppol was created by OpenPEPPOL in 2008 to set the standard for e-Invoicing and other e-Documents. The Peppol framework outlines the Peppol UBL format for these documents and it governs the Access Point network This framework is currently used in over 34 countries including Australia and New Zealand. In 2019 the ATO was appointed the country authority for Peppol in Australia and MBIE took that role in New Zealand. Working closely together these agencies govern the administration of the network and the accreditation of Access Points in Australia and New Zealand.

In a 4 corner model, Access Points send and receive business documents between organisations. Think of them like a post office box, the senders software sends the invoice to their Access Point (corner two) and the receivers software then collects it from their Access Point (corner three). To be a part of the Peppol e-Invoicing Network, organisations need to go through an extensive accreditation process to become an accredited Access Point. Included in this process are stringent certifications, meeting the highest security and interoperability requirements. This ensures that the Access Points, not only have the capabilities to function within the network, but also the trust and reliability to maintain a stable network free of fraud. The country authorities maintain this layer of governance across the network to ensure it remains secure.

By adopting the Peppol framework the prime ministers of Australia and New Zealand have agreed to the standardisation of formats and processes across a single economic market.

At a glance

Processing Costs

The estimated costs for businesses to process a Paper invoice is around $30 and $27 for a PDF invoice. In comparison an e-Invoice is estimated to cost under $10 due to the increased levels of automation involved.