Jarrad Lawford 9 June - 4 min read
We’ve already invented 3D printing, spray-on skin and self-driving cars, so you would expect we can seamlessly send and pay off invoices without errors in an instant, right?
Unfortunately, many Australian businesses and customers are trapped with inconsistent and error-prone practices of handling invoices. The traditional “invoice by mail or email” creates fertile ground for mistakes that more often than not, lead to invoices being paid late, to the wrong supplier or are the incorrect amount.
In fact, 53% of all invoices sent between Australian businesses are paid late by an average of 23 days. Another 20% paid is the wrong amount, while another 20% is sent to the wrong address entirely.
It beggars belief, but there’s a reason why these statistics have shown Australia’s invoice payment processes between business-to-consumer (B2C) and business-to-business (B2B) operations are as solid as a tea-dipped Tim-Tam. It’s from two common and outdated business practices.
Most ERP and Small Business Accounting products enable the customer to attach and send a PDF invoice as an email. The other is printing and mailing paper invoices.
Once your customer receives the invoice, they still need to manually enter this data into their accounting system. This is where natural human error leads to common mistakes such as entering the wrong amount, bank details or even supplier.
This process is also painfully slow and causes businesses to waste valuable time, resources and money chasing customers for payments, throwing a spanner in the works of their cash flow machine.
How do you tackle these flaws?With modern integrated commerce systems that provide a secure, slick and seamless way of sending and receiving invoices by enabling E-invoicing and simplified bookkeeping.
The key to efficient cash flow and faster payments is direct digital transfers that are immediate, secure and seamless. But to get paid you need to focus on all the transactions that lead up to the invoice. If the purchase, fulfilment and invoice delivery is error-free then you eliminate a lot of the reasons for delay at the source.
Sophisticated yet simple commerce platforms can handle this entire process for you and enable faster and more reliable invoice transfers through E-invoices.
E-invoicing is designed to reduce the errors and delays by directly sending the invoice from your business to your customers and then integrating the result into their accounting system without data entry. This means you can quickly fire off your invoice from Xero, MYOB or Quickbooks and it arrives in real-time to your customer’s accounting system as a pre-populated bill, ready for approval and payment.
This seamless flow means those receiving the invoice don’t have to “work” to process the invoice, concern themselves with missing an email, or manually enter the paper invoice data into their system.
Not only is it easier for you to send these invoices, but your customer also has more payment options than ever before. Modernised payment collection software such as SpendaCollect empowers businesses to easily send E-invoices to the customer, who can group, track and batch-pay multiple invoices at once and receive only one digital receipt for these transactions.
The kicker? These payment systems can be connected to your customers’ accounting systems via the E-invoicing framework quickly and easily to create a permanent information freeway that is fast and error-free.
While E-invoicing has seen a slow and steady acceptance over the past few years, it’s implementation has accelerated as more countries worldwide accept it as the fastest (and even mandatory) standard for payments.
The United Kingdom and Europe have used mandatory e-invoicing standards since 2008, while Singapore encouraged businesses to register for e-invoicing processes in 2019. The US and Indian markets are also currently expanding their national E-invoicing frameworks.
The global accessibility of E-invoicing means governments are now also using it as a secure method to digitise trade. The Australian and New Zealand governments have signed an agreement to use E-invoicing to develop a seamless Trans-Tasman business communication environment. Given Australia and New Zealand are experiencing better success at handling the COVID-19 pandemic, smoother trading and buying between our two countries is crucial.
Larger businesses within Australia would greatly benefit from these improved payment processes. As notorious late payers, large organisations commonly struggle to automate their accounts payable processes as quickly as smaller businesses due to a higher number of vendors. They also usually don’t have an efficient invoicing network that can connect them to their enterprise software solution.
Small businesses supplying larger organisations can implement e-Invoicing to reduce data entry and create greater transparency in the relationship with these customers.
Larger distribution businesses can utilise E-invoicing and connect their ERP systems to their retail customers’ small business accounting software. This allows faster and easier sharing of transactions to reduce data entry and improve cashflow.
More Australian businesses are joining the E-invoice revolution and it’s improving our global footprint for business. Spenda’s supportive payment software also seamlessly handles currency exchanges in the background, it’s been a game-changer for international transactions.
Because E-invoicing is proven to be more efficient and secure, many businesses are seeking cloud-based payment systems that integrate directly into their accounting platforms.
SpendaPay and SpendaCollect integrate with these financial systems in real-time and because they track the audit trail between businesses and store this digitally, it means you’ll always know where an invoice has been sent and when.
Change your system, not your vision. Experience the improvements to your cash flow by embracing integrated payment solutions.
Adrian Floate – Managing Director at Cirralto.
Chasing up late payments is something business owners and their finance and accounting teams spend a lot of time doing.
Chasing late payments can cost your business a lot of money, and today, Australian small businesses spend an average of 12 days per year chasing late payments – many of which are still likely relying on out-dated and inefficient manual processes.
Late payments amongst Australia’s SMEs have been an ongoing issue for many years. To address the issue, various policy measures have been introduced, especially when it comes to larger businesses paying SMEs.
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