All NSW state government agencies will have to use e-invoicing for goods and services valued at up to $1 million from next year.

Customer Service minister Victor Dominello says the mandate, effective from January 1, will help reduce payment times, cut down on paperwork and reduce human error.

Mr Dominello says replacing a paper invoice with an e-invoice saves around $20 and replacing a pdf invoice saves around $17.

“Based on the 4.2 million invoices across NSW Government in 2019, a shared saving between the suppliers and NSW Government is estimated to be $71 million,” he said.

“This means the Government can spend more time helping customers and businesses can focus on their operations.”

The government has engaged MessageXchange as the access point provider to deliver a whole of government e-Invoicing service within the Department of Customer Service.

Federal mandate from July 2022

As part of its digital business plan, the federal government has announced that the commonwealth will mandate e-invoicing for agencies by July 1 2022, with over 80 per cent of invoices being able to be received electronically by July this year.

According to the ATO, the change will save the economy an estimated $28 billion over ten years.

It is currently consulting on options for mandatory adoption of e-invoicing across all levels of government.

A NSW planning department spokesperson told Government News there are no plans to extend the mandate to local government at this stage.

Faster payment policy

Mr Dominello says research indicates that Australia is lagging on the e-invoicing front.

Rates in Australia range from 15 per cent for small businesses to 23 per cent for large businesses, compared with 28 per cent across Europe and 40 per cent in Denmark and Finland, he says.

Finance and small business minister Damien Tudehope says e-invoicing will also aid the government’s faster payment terms policy, which requires agencies to settle with eligible small businesses within five days.

“We want to take steps to ensure that properly rendered invoices reach and are actioned by the right teams as quickly as possible,” he said.

e-invoicing will remain optional for suppliers invoicing NSW government agencies.

Change management

Managing director at SAP Concur Australia and New Zealand Matt Goss says e-invoicing represents a major shift to automation for government.

As such, it’s  important for affected agencies to consider change management including engaging with employees and suppliers and implementing project plans and objectives.

“e-invoicing is a major step for an organisation and, therefore, requires the same change management approach that is applied to any significant organisational change,” Mr Goss said.

“e-invoicing is the future. If organisations are not embracing automation, they will be left behind.”

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