The private sector should now be considering how it can become an early adopter of the technology to create a competitive advantage, as explained by David Sofrà, Kevin Ferdinands and Thomas Purnell.
It is common knowledge that process and system integration is an essential part of running an effective enterprise.
However, manual processes and inconsistent data standards in invoicing, expense approvals and fulfillment are commonplace for many businesses.
As a result, critical information can become siloed across business functions and between suppliers, preventing many organisations from reaching their potential.
In its November 2020 consultation paper, Treasury addressed the Federal Government’s plan to introduce mandatory electronic invoicing (e-invoicing) throughout the public sector and considered strategies to introduce mandatory e-invoicing technology in the private sector over the years to come.
This initiative has been introduced as part of the Government’s plan to digitise Australia’s economy to increase business productivity, thereby driving our post-pandemic recovery.
Broadly, the proposed method of e-invoicing will allow the digital exchange of invoices between suppliers and buyers in a way that is accounting system agnostic. This will be achieved through the introduction of the Pan-European Public Procurement Online (PEPPOL) framework, which provides standardised formats that can easily be integrated into an organisation’s existing enterprise architecture.
Given that the changes will start coming into effect for some government organisations from July 2021, the private sector should now be considering how it can become an early adopter of the technology and leverage PEPPOL e-invoicing to increase billing integration with tax and ERP systems to create a competitive advantage for businesses.
As a first step, this will involve understanding the technology and developing a strategy around the decision to ‘build’ a PEPPOL integrated system by modifying existing business processes and systems, or ‘partner’ with a new provider to design new methodologies to leverage the full capabilities enabled by PEPPOL.
In our view, PEPPOL e-invoicing integration should be considered a major catalyst for businesses to transform several internal functions including:
We believe it is important to view the broader discussion around the mandatory e-invoicing in the private sector with a positive light.
While the coming changes may involve some investment in the short term, there are significant benefits to be gained by leveraging supply chain data through the use of technology.
If you are interested in learning more about how e-invoicing and PEPPOL can be leveraged in your organisation, we encourage you to reach out directly.
See related article on KPMG Tax Now: Options for mandatory e-invoicing adoption by businesses
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