The Government is investing $5.8 million in a trans-Tasman drive to push e-invoicing, minister for small business Stuart Nash says.
Nash told Parliament last week the operating funding will support the trans-Tasman project, which aims to drive direct invoicing between a supplier’s and a buyer’s online accounting software, over the next two years.
In March, the Prime Ministers of both New Zealand and Australia committed to advancing work on a common approach as to e-invoicing as part of the trans-Tasman single economic market agenda, he said.
In June, the Australian Government, on the urging of accounting software vendors such as Xero, adopted a framework for digital invoicing.
"The commitment by the Australian Government and our Government confirms that we are on track to fundamentally change the way Government to business and business to business connections are made," he said.
Nash said he had been working with Australian ministers Kelly O’Dwyer, minister for revenue and financial services; Craig Laundy, minister for small and family business, the workplace and deregulation; and the New South Wales minister of finance, Victor Dominello to progress the work.
In addition, Nash said e-invoicing creates economic benefits through faster payments and reduced transaction costs.
"My officials advise me, based on comparable Australian research, that they estimate that a 15 per cent uptake of e-invoicing by New Zealand businesses and Government agencies could save up to $500 million a year," he added.
Meanwhile in Australia, Deloitte Access Economics estimated that digital invoicing could deliver economic benefits of up to A$28 billion over 10 years.
In an April blog post, Xero said e-invoicing formats are readable by both humans and machines, allowing invoices to be automatically entered into accounting software.
"This is a huge timesaver at both ends of the transaction," the provider said. "There is a hitch, though.
"Many e-invoicing solutions require the sender and recipient to use the same invoicing software. For that reason, the private sector has urged the government to develop a single low-cost e-invoicing standard that all businesses can use.
"The governments of Australia and New Zealand recently agreed to do just that. The countries are fine-tuning a prototype developed over the last several years by the Digital Business Council, which is a collaboration between the Australian Taxation Office and businesses such as Xero."
Nash said e-invoicing can deliver significant productivity improvements and savings from fewer invoice errors and less time spent resolving errors.