ABSIA made a submission to Treasury's Options for mandatory adoption of electronic invoicing by businesses on 18 January 2021.
Overall, ABSIA supports the introduction of a mandate and its ability to generate awareness for e-invoicing amongst Australian businesses. From what the industry has seen to date from international experiences, mandates and subsequent incentives have been the best drivers of adoption across large and small businesses. ABSIA's recommendation is to apply the mandate to software products and make it compulsory to have the capability to both send and receive Peppol e-invoices. This enables businesses, especially small businesses, to adopt at their own pace. In our view, this type of mandate needs to come hand in hand with an incentive program for small businesses to encourage adoption here.
In summary, this submission covered the following:
- Barriers to adoption include not enough incentives and the amount of work required to change business processes. Further, there is still a lack of knowledge about what e-invoicing is and what it involves within the industry;
- We expect that a mandate will assist in reducing payment times for small businesses. To assist here, e-invoicing should be tied to the Payment Times Reporting scheme to also make it easier for large businesses to undertake this reporting;
- The Government should be considering international experiences with mandating e-invoicing to better understand different approaches and how they have worked. Overall, we have found that countries with no mandates in place experience very slow adoption rates. Incentives to encourage adoption, especially for small businesses, should also be considered. Examples of both international mandates and incentives are provided throughout the submission;
- We support the introduction of a mandate and note that for a mandate to truly work, the e-invoicing capability needs to be made available first;
- Large businesses should be defined in line with the Payment Times Reporting scheme threshold of $100 million;
- If a mandate is introduced in mid 2021, we would expect that small businesses should be able to comply by 30 June 2023; and
- Exemptions should be granted to avoid disadvantaging small businesses and handled in a similar manner to Single Touch Payroll (STP) exemptions for small businesses.
Further, ABSIA would like to see both send and receive capabilities be mandated for the Government.
A full copy of this submission can be accessed here.
Following the written submission, ABSIA then attended a roundtable with Treasury on 12 February to discuss these issues in depth with other stakeholders.