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Thinking About Adopting E-Invoicing? Here’s What You Need To Know

Invoicing is an important element of operating a business. It’s how the business receives payments. But if you are tired of having to chase invoices, correct errors and avoid email scams, and noticing an impact on your business’s cash flow, you may want to consider switching to electronic invoicing (or e-invoicing).

E-invoicing is a digital-based method through which you can automatically create, exchange and process invoices. It removes the need for paper-based or PDF invoices that need to be printed, posted or emailed, and for buyers to manually enter or scan them into their software.

E-invoicing does not apply to business/consumer transactions. Rather, its usage is between businesses, contractors and government bodies to facilitate a smoother process of invoicing. E-invoicing allows organisations to send and receive invoices electronically, directly into the organisation’s accounting software. It eliminates the need for manual invoicing processes, both paper-based and emails with PDF attachments of invoices.

To digitally exchange invoices, a business’s software must be connected to the Peppol network. The Peppol framework for e-invoicing is an international standard adopted by over 38 countries globally for more than a decade. Many small business accounting software providers are already using the software compatible with Peppol, which can make adopting e-invoicing for your business a lot easier.

You can start a conversation about e-invoicing and the benefits as a:

  • business to your buyers or suppliers
  • tax professional or book-keeper to your clients
  • digital service provider to your users
  • business adviser to your clients
  • Industry representative

With the digital transformation of business well underway, electronic invoicing is a step on the path toward opportunities and benefits for organisations beyond simply affecting efficiencies and cashflows. If e-invoicing is a step that you’d like to take for your business, you will need to contact your software provider to determine:

  • If you are digitally ready
  • How and when they can help
  • What you need to do
  • If you need to update existing software or add an extra service.

If you have already discussed e-invoicing with your current software provider, you will want to ensure that you are prepared to adopt the practice of e-invoicing for your business. This may include:

  • Understanding how your business processes invoices currently could include analysing the state of your invoicing system, the method through which invoices are sent and received, who your top suppliers and buyers are and if you are currently using software and scanning tools to manage your accounts payable and receivable.
  • Learning how to implement e-invoicing, such as speaking directly with software and e-invoicing service providers to learn what you need to be ready.
  • Planning how your business will ready itself for e-invoicing could involve managing changes in business processes within your organisation, speaking with providers and discussing your options with us.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier