The five-day e-invoicing payment policy will apply to contracts valued up to $1 million, where a supplier and a government agency both use the framework for delivering and receiving invoices in an electronic form, Minister for Finance Mathias Cormann announced on Thursday.
Last month, the government passed legislation through the Parliament to enable Australia to implement the internationally recognised framework for e-invoicing. Having a standardised framework enables buyers and suppliers to transact using e-invoices even if they have different software.
“e-invoicing will improve business cash flow through faster payment times and deliver significant benefits and efficiencies to suppliers and the government by reducing transaction costs and handling errors,” Mr Cormann said.
The government is now prioritising e-invoicing adoption across the Commonwealth. The Department of Finance and Services Australia will be the first Commonwealth agencies to accept e-invoices from 1 January 2020, with other agencies implementing the capability over the course of the year.
“We encourage state governments and the business community to follow our lead using the new framework for e-invoicing,” the minister said.
A maximum 20-day payment term will continue to apply in instances where e‑invoicing is not used.
Responding the Mr Cormann’s announcement, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, called e-invoicing a “game changer” for businesses that are directly engaged in a contract with a federal government agency.
“The next step would be to apply this to businesses right down the supply chain,” Ms Carnell said.
She encouraged small and family businesses to adopt e-invoicing and make the most of the benefits that flow from that, including reduced administration costs and fewer processing and handling errors.
