Government commits to 5-day e-invoice payment terms
From January next year, Commonwealth Government agencies will begin paying e-invoices within five days.
Following on the heels of legislation passed in October that created an internationally recognised framework for e-invoicing, the Government is now prioritising the adoption of e-invoicing across the country.
Announced by the Minister for Finance Mathias Cormann and the Minister for Employment, Skills, Small and Family Business Michaelia Cash, the new five-day payment terms signal the government’s prioritisation of e-invoicing adoption.
The standardised framework is designed to enable buyers and suppliers to transact using e-invoices even if they have different software.
The five day e-invoicing payment policy applies to contracts valued up to $1 million, where both the lead contractor and federal government agency both use e-invoicing.
The Government has also committed to paying interest on overdue e-invoices, with the Department of Finance and Services Australia being the first Commonwealth agency to accept e-invoices as of 1 January, 2020.
The news was endorsed by MYOB’s Head of Product, David Weickhardt.
“MYOB research consistently shows late payments and cash flow are the key concerns of small business operators,” said Weickhardt.
“For this reason, the Government’s e-invoicing framework will be a major contributor to making it easier for this extremely busy group of people to receive, send and pay invoices.”
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell also welcomed the announcement.
“This is a game-changer for e-invoicing small businesses that are directly engaged in a contract with a Federal Government agency,” said Carnell.
“The next step would be to apply this to businesses right down the supply chain.”
And Carnell agrees.
“Our Small Business Counts report shows that late payments continue to hamper small business viability, with half of all small businesses reporting late payments on 40 percent of their invoices,” she said.
“This policy will improve cash flow for small businesses so they have the confidence and the capital to re-invest.
“We encourage small and family businesses to adopt e-invoicing and make the most of the benefits that flow from that, including reduced administration costs and fewer processing and handling errors.”
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