Why it’s time to embrace e-invoicing technology that boosts efficiency and cash flow, and improves compliance

Select a best-of-breed platform, and the benefits will be significant, Avalara executive writes

Is swapping outdated billing software for a next-generation e-invoicing solution on the agenda for your business in FY2025?

If the answer is yes, you've made a wise call, and it is one that other Australian businesses would do well to consider.

Many continue to rely on outdated methods and solutions to bill their customers for the goods and services they sell. And it's to their detriment. Creating, sending and chasing up invoices manually is slow and expensive.

Like other manual clerical processes, it risks human error. Correcting and re-issuing incorrect invoices can slow the flow of payments into your business, putting pressure on cash flow and your finance team.

Then, there's the customer experience angle to consider.

Inaccurate billing is an irritant to customers who have to waste their own valuable time chasing a fix. It can cast your organisation in a disorganised and unprofessional light and, if it happens regularly, may prompt some buyers to explore what the competition offers.

The advantages of e-invoicing

Ample reason to start looking for a better way, and e-invoicing certainly is that. Most simply described as the digital exchange via a secure network of invoices between your business and a customer's accounting platform, it does away with the need for printing, storing, posting and emailing. Instead, your customers can download their bills securely just seconds after you issue them, and enhanced visibility of the process means you'll be able to see exactly when they've done so.

There's a good chance you'll receive your remittance more quickly due to that reduction in processing time. And you'll save money directly as well. Deloitte Access Economics estimates that every time an e-invoice replaces a traditional paper or emailed PDF invoice, the businesses involved can share up to $20 in cost savings. If your enterprise is a prolific biller, that can quickly add up to a significant sum.

Selecting the right solution

However, while the case for e-invoicing may have been well and truly made out, how much it benefits your business will depend on the solution you decide to adopt. The finance technology market is mature, which means there's no shortage of options to choose from. Features and functionality can vary significantly, and it pays to go with a market-leading platform to support your business's current and future requirements.

If your business is in growth mode or already has an overseas presence, you'll need to look for a solution that enables you to comply with the specific invoicing and taxation requirements of the countries and markets where you'll be trading. B2B e-invoicing, for example is already mandatory in several European countries, but the standards and specifications to which they must adhere vary. Expanding your operations means you'll likely produce more invoices each week or month too. The system you choose should be able to scale up as you transition from small to medium-sized organisations or take the leap into the enterprise sphere.

Robust data security measures are also essential in today's climate of rising cyber risk. Invoices are critical financial documents, and any e-invoicing solution you adopt should have stringent safeguards in place to protect the privacy of your business and that of your customers. The cost of getting it wrong can be extreme. Here in Australia, organisations that fail to take adequate steps to protect customer privacy face potential penalties equal to the greater of $50 million, three times the value of the benefit obtained or 30 per cent of  domestic turnover in the relevant period. Last but certainly not least, when choosing an e-invoicing solution, interoperability should be one of your primary concerns.

Interoperability is the ability of different systems to communicate and exchange data.

Regarding e-invoicing, interoperability allows e-invoices to be exchanged seamlessly between organisations, regardless of the software they use.

There are several benefits to using an interoperable e- invoicing solution, including:

• Reduced costs: Interoperability can help reduce the costs associated with e-invoicing by eliminating the need to enter data into different systems manually.
• Increased efficiency: Interoperability can also improve the efficiency of e-invoicing by streamlining the process and reducing the risk of errors.
• Improved compliance: Using an interoperable e-invoicing solution can help improve compliance with e-invoicing regulations by ensuring invoices have a consistent and standardised format.

Setting your business up for a stronger future

Optimising your financial processes is a surefire way to achieve efficiencies, save money, boost cash flow, and deliver a better customer experience. If improving your business's position is a priority for FY2025, adopting best-of-breed e-i invoicing technology is a great place to start.