Almost half of businesses surveyed (48 per cent) said they would consider registering if high invoicing government agencies such as ASIC, the Australian Taxation Office (ATO) or state transport agencies sent e-invoices. It also found that 46 per cent of respondents would likely register for e-invoicing if their frequent big business suppliers (Telstra, Officeworks, Woolworths) sent e-invoices directly into their accounting system.
As the Australia Taxation Office’s E-Invoicing Week kicks off, global small-business platform Xero has released a survey of more than 500 Australian small businesses and sole traders examining the common pain points of manual invoicing, as well as their understanding of e-invoicing and appetite for its adoption.
One of the major barriers to the uptake of e-invoicing by small business, according to the survey was that more than 40 per cent did not know what it was, or how it worked.
Simon Foster, GM product – e-invoicing at Xero said the results of the survey should be a good incentive 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.
“eInvoicing reduces administration and errors while accelerating payment for Australiaʼs small businesses, but they need lots of entities on the eInvoicing network to make registering worthwhile,” Mr Foster said.
“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 eInvoices sent directly into the software of the small business, as we have seen in leading digital economies overseas.”
Mr Foster said e-invoicing is not yet widely adopted within the Australian small-business community with nearly two-thirds (62 per cent) of the respondents being unable to identify the correct definition or didnʼt know what e-invoicing was.
The research also found that the top barriers to adopting e-invoicing included small businesses not knowing enough about it (41 per cent), feeling as though their existing processes are fine (28 per cent), and not enough of their suppliers using it (27 per cent).
“Over the last few years, small businesses have accelerated their digitisation journey to keep pace with a changing world,” Mr Foster said.
“We know small businesses are time poor, but they have the willingness to adopt new technology.”
The time it takes to be paid from a manual invoice was one of the major concerns of small business, according to the survey (22 per cent) and more than 25 per cent said they often feel stressed about overdue invoices.
With that in mind, 63 per cent of respondents said they would be more likely to register for e-invoicing if it proved to facilitate faster payment times.
Inflation and the ongoing cost of living are also impacting small businesses, with the majority (81 per cent) of respondents sharing that the rising cost of living has affected their cash flow. A recent Xero Small Business Index report identified that most (92 per cent) of Australian small businesses experience at least one month of negative cash flow per year.
“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. eInvoicing 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,” Mr Foster said.
