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E-Invoicing Framework Launch to Streamline NZ Business Invoicing

New Zealand E Invoicing Framework

The formal launch of New Zealand’s e-Invoicing framework brings Kiwi businesses a step closer to streamlined payment practices.

According to a recent press release, Small Business Minister Stuart Nash explained that the government has now established the structure to enable automated and direct data exchange between the accounting systems of buyers and sellers.

About the Initiative

  • The move to e-Invoicing has been driven by the New Zealand Prime Minister Jacinda Ardern and her Australian counterpart Scott Morrison, as part of the Single Economic Market agenda to create a seamless trans-Tasman business environment.
  • E-invoicing replaces paper-based or PDF invoices, which have to be manually processed with a common digital language, and allow different payment and accounting systems to speak to each other.
  • In a Wellington conference of around 200 software and financial services providers, the Minister shared that the Ministry of Business, Innovation and Employment (MBIE) has been formally established as the Agency that will manage and oversee the local element of the international network for e-Invoicing.
  • The establishment of MBIE as the local authority for the Pan European Public Procurement Online (PEPPOL) network marks a big step towards the first exchange of e-Invoices by Kiwi businesses.
  • Financial and IT service providers, and others, can now gain accreditation to use the PEPPOL network.
  • This network connects businesses across 32 countries. It allows private sector and government agencies to begin adopting e-Invoicing by the end of 2019.
  • Businesses should prepare now for e-Invoicing by adopting a New Zealand Business Number (NZBN).
  • The NZBN enables e-Invoicing and can be fully integrated into procurement and finance systems.

Addressing the Problem

Some of the biggest sources of stress and cash flow problems for small businesses are late payments and long payment terms.

As a more accurate, secure and efficient process, e-Invoicing will help ensure businesses can be paid on time.

While New Zealand is already first in the world for ease of doing business, they still want to be even better.

What is e-Invoicing?

  • Standardised electronic invoicing (e-Invoicing) is one of the first in a range of digital innovations enabled by the NZBN, which will help businesses save time and money.
  • E-Invoicing is the direct exchange of invoices between suppliers’ and buyers’ financial systems.
  • Buyers can send an e-Invoice directly to their customer’s financial system through a digital ‘mail’ service.
  • International standards allow these systems to ‘speak’ to each other, even if the two businesses are using different systems.
  • Businesses no longer need to generate paper-based or PDF invoices that have to be printed, posted or emailed, and buyers no longer need to manually enter these into their accounting system.
  • Automating the invoicing process improves accuracy and security, speeding up processing and reducing errors and delays.
  • OpenGov Asia earlier reported on New Zealand and Australia to adopt PEPPOL framework for e-Invoicing.
  • The Prime Ministers of both countries announced the intention to adopt since e-Invoicing will see them save over NZ$ 30 billion in transaction costs over the first 10 years.
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