Melbourne — 15 August, 2022 — New research by Xero, the global small business platform, has uncovered that almost half of Australian small businesses surveyed would likely register for eInvoicing if government agencies and big businesses started sending eInvoices.
Electronic invoicing, or eInvoicing for short, is the automatic exchange of invoices between accounting soware. Unlike emailing a PDF or online invoice, an eInvoice is sent directly to or from the accounting platform of another business or government department almost instantly – via the secure Peppol eInvoicing network.
The survey of more than 500 Australian small businesses and sole traders examined the common pain points of manual invoicing, as well as their understanding of eInvoicing and appetite for its adoption.
Almost half of the respondents (48%) said they would consider registering if high invoicing government agencies such as ASIC, the Australian Taxation Office (ATO) or state transport agencies sent eInvoices. It also found that 46 percent of respondents would likely register for eInvoicing if their frequent big business suppliers (e.g. Telstra, Officeworks, Woolworths) sent eInvoices directly into their accounting system.
“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,” said Simon Foster, GM Product - eInvoicing at Xero.
“This is a terrific opportunity 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. 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 soware of the small business, as we have seen in leading digital economies overseas.”
Greater awareness of eInvoicing needed
Despite the numerous benefits it offers over manual invoicing (being more accurate, efficient and secure), eInvoicing is not yet widely adopted within the Australian small business community. Nearly two-thirds (62%) of the respondents were unable to identify the correct definition or didnʼt know what
eInvoicing was. The research also found that the top barriers to adopting eInvoicing included small businesses not knowing enough about it (41%), feeling as though their existing processes are fine (28%), and not enough of their suppliers using it (27%).
To help encourage the uptake of eInvoicing in Australia, the ATO is launching eInvoicing week – giving small businesses access to more education, resources and information.
“Over the last few years, small businesses have accelerated their digitisation journey to keep pace with a changing world. We know small businesses are time poor, but they have the willingness to adopt new technology. We hope that eInvoicing week will give small businesses access to subject matter experts so that they can understand the positive impact it could have on their invoicing processes,” added Foster.
eInvoicing has potential to improve payment times and boost cash flow
When asked what the biggest pain point of manual invoicing is, over one in five (22%) small businesses surveyed identified that the time it takes to get paid is the top issue. Over a quarter (26%) also said they oen feel stressed about overdue invoices, while 63 percent of respondents noted they would be more likely to register for eInvoicing if it proved to facilitate faster payment times.
Inflation and the ongoing cost of living is also impacting small businesses, with the majority (81%) 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%) 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 soware 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,” Foster concluded.
Xero Australia | Sophie McCullen | 0435 913 863 | email@example.com
Xero is a global small business platform with 3.3 million subscribers which includes a core accounting solution, payroll, workforce management, expenses and projects. Xero also provides access to financial services, and an ecosystem of more than 1,000 connected apps and more than 300 connections to banks and other financial institutions. Through Xeroʼs open platform, small businesses can connect to a range of solutions that help them run their business and manage their finances. For three consecutive years (2020-2022) Xero was included in the Bloomberg Gender-Equality Index. In 2021, Xero was included in the Dow Jones Sustainability Index (DJSI), powered by the S&P Global
Corporate Sustainability Assessment. Xero has been named as a FIFA Womenʼs Football partner under FIFAʼs new commercial structure.
Electronic invoicing, or eInvoicing for short, is the automatic exchange of invoices between accounting soware. Unlike emailing a PDF or online invoice, an eInvoice is sent directly to the accounting soware of another business or government department almost instantly – via the secure Peppol eInvoicing network. eInvoices can be sent between accounting soware connected to the Peppol network, even if the buyer and supplier are using different accounting soware. For example, eInvoices can be exchanged between Xero and non-Xero soware.
About Xeroʼs eInvoicing survey
The survey was commissioned by Xero Australia and undertaken by Pureprofile to analyse small businessesʼ attitudes and behaviours around eInvoicing. In July and August 2022, Pureprofile conducted an online quantitative survey, interviewing 508 small businesses with fewer than 20 employees.
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