eInvoicing Adoption Leaders Group minutes – 11 November 2024

Meeting details

Date

• Monday, 11 November 2024

Time

• 1:00pm to 3:00pm (Auckland, Wellington)
• 11:00am to 11:00pm (Brisbane, Melbourne, Sydney)

Locations

• Wellington – Westpac NZ, 1 Victoria Street, Wellington 6011
• Remote – MS Teams

Attendence

Minutes

• Welcome and administration
• Global and NZ eInvoicing progress
• NZGP eInvoicing and faster payment rules presentation and discussion
• Update from Australian Taxation Office (ATO)
• eInvoicing from an Inland Revenue perspective
• Member’s updates – eInvoicing progress, commitments, and roundtable discussion
• Closing remarks

Welcome and administration

• Chair welcomed members and thanked those who had travelled to attend.
• Minutes of the 11th meeting were passed, and members were reminded of and invited to declare conflicts of interest.

Global and NZ eInvoicing progress

The Chief Operating Officer (COO) of MBIE thanked attendees and provided below updates:

• Acknowledged widespread support for eInvoicing among members, with particular acknowledgement of the recent efforts of few members in growing the uptake of eInvoicing.
• The support of Hon Minister Bayly and his predecessor Hon Minister Nash was noted and recognised.
• eInvoicing registrations in 2024 have grown by 124%, and eInvoicing volumes by 404%. New Zealand has ranked in the top 5 for global eInvoicing growth on the Peppol network.
• eInvoicing adoption continues to grow globally, with recent developments shared from the European Union, United Kingdom, and United Arab Emirates.

NZGP eInvoicing and faster payment rules presentation and discussion

The Manager of eInvoicing Adoption and NZGP Head of Strategy, Policy and Governance presented on the newly approved NZ Government Procurement Rules for eInvoicing and invoice payment times.

Cabinet have approved following changes to the Government Procurement Rules requiring 135 agencies to be:

• eInvoice send and receive capable by January 2026 if they send/receive over 2,000 invoices per year
• Pay all eInvoices received within 5 business days by January 2026
• Pay other invoice types within 10 business days.

Members provided views on a potential new additional Rule requiring some government suppliers to provide eInvoices:

• The Group broadly supported this requirement, particularly with the 5-day payment times for eInvoices as an incentive. The Group noted that standardising government receiver requirements should be prioritised to reduce costs and increase efficiency.
• However, certain scenarios were discussed regarding the practicality of standardisation, including:
  • Agencies having different requirements (for example, such as a Purchase Order)
  • Allowing exceptions to any standardisation to progress the implementation could be challenging as it would introduce complexity and reduce efficiency.
• Requirements should be for all government suppliers – not just large suppliers.
• Encouraging and rewarding compliant behaviour rather than penalising non-compliance should also be considered to boost uptake.

Members provided views on a potential new additional Rule requiring government suppliers to pass on faster payment times to subcontractors:

• Further clarification was sought about the practicality of implementing and enforcing this requirement.
• It was broadly agreed that the capacity to carry out this requirement already existed and that it was important to do the right thing in passing these payments on. Clarification was sought on monitoring this and it was pointed out that not being able to verify compliance should not be seen as a reason not to do it.
• Transparency was identified as important and that visibility of data on these payments could help change mindsets.
• Elsewhere in the world, payment times have not been seen as driving eInvoicing uptake and may even discourage the use of eInvoicing if prompt payment is a burden. It was suggested that other avenues should be considered such as reducing reporting requirements for those who use eInvoicing.

Action point

• MBIE to report back on next steps for these potential requirements (to be reported back to Cabinet in February 2025).

Update from Australian Taxation Office (ATO)

The Deputy Commissioner of the ATO provided an adoption update and shared the latest statistics of Australian eInvoicing adoption:

• Emphasised Australia’s support for growing eInvoicing adoption. Australia and New Zealand have a regional approach to eInvoicing adoption, noting that many members operate in a Trans-Tasman environment.
• Clarified that focused benefits for eInvoicing in Australia is around minimised fraud and improved productivity, not for tax compliance purposes.
• The Deputy Commissioner thanked the members for the invitation and the opportunity to speak.

eInvoicing from an Inland Revenue perspective

The Domain Lead, Information Governance and Sharing and the Service Owner, Buying Operations presented the Inland Revenue (IR) experience of eInvoicing and the progress it has made in its own journey.

• The use of eInvoicing produces better business records and tax payments at an economy level. It enhances the accuracy of business records and, anecdotally, increases the chances of businesses making their tax payments on time. There are benefits to the tax system of moving to eInvoicing:
  • Stronger security in eInvoicing
  • Increased authenticity of eInvoices
  • Elimination of false actors, reducing fraudulent GST claims.
• IR has been working closely with MBIE and Peppol designing eInvoicing requirements.
• IR has moved quickly in reducing the reporting burden with eInvoicing.
• IR has been receiving eInvoices since early 2020 and will be sending eInvoices in 2025. By working closely with suppliers, they have avoided whitelisting and improved support for onboarding, testing, and troubleshooting.

Member’s updates – eInvoicing progress, commitments, and roundtable discussion

A member organisation has held an event on eInvoicing for Small, Medium Enterprises (SMEs). It was filmed and sent to customers. Looking at key sectors for onboarding and promotion traction, such as NZ franchises. Currently working with suppliers on technical challenges and have seen an annualised uplift of 70% in eInvoices being processed. They expect more traction to come as larger suppliers moving to eInvoicing.

A member organisation is receiving eInvoices and looking to scale up. There are about 50,000+ suppliers, a lot of paper invoices and they are looking to digitise many of these. Looking into levy invoices which may be more difficult to implement but the benefits will be large.

A member organisation is continuing to progress their eInvoicing work in New Zealand by getting their software and testing plans ready. Their team working on this from the USA are looking to visit New Zealand in early 2025. Looking at enablement activities to get some of their customers on board in New Zealand and Australia.

A member organisation is currently exploring the eInvoicing opportunity through their ERP solution and believes the eInvoicing functionality could be enabled reasonably easily. They are also in touch with other organisations that are currently using similar ERP systems. Their current payment term is on approval basis and the proposed payment time (5 days for eInvoices and 10 days for standard invoices) may need some consideration. They are also conscious of working capital, exports, and other matters that could determine the ultimate benefit of adoption.

A member organisation has recently signed the statement of work with an access point provider. Looking at starting with Accounts Payable (AP) in early 2025.

A member organisation went live in October 2024. Mail house was more cost effective than the upgrade of entire Enterprise Resource Planning (ERP) system. 2,044 eInvoices have been sent in the first month since going live – this is expected to scale up significantly in line with the Australian trajectory. A detailed implementation journey was shared with the group through presentation (PPT). New Zealand Business Number (NZBN) data match wasn’t hugely successful for the team which will be followed up by MBIE.

A member organisation has seen an increased influx of enquiries from Government agencies enquiring about receiving eInvoices from them following Hon Minister Bayly’s announcement. They are going live with another government agency next month. Reporting a noticeable increase in momentum.

A member organisation is focused on issuing eInvoices within 2 business units that are undergoing a pilot to understand costs. Currently working with an Access Point Provider. Plan to use as benchmark for other business units. They are keen to get further clarification on payment times for paying their subcontractor that are not part of government contracts.

A member organisation is live with sending and also sending on behalf of their leading customer via their mailhouse and seeing volume cost efficiencies. Receiving eInvoices is planned pending business agreement. Though there are no technology issues, there are data issues they are working through primarily around NZBN.

A member organisation is currently doing the final receive testing with supplier eInvoices and expect to complete end to end testing by this month.

A member organisation needs to prioritise work that is likely to be hooked into their existing invoicing exchange.

A member organisation sees one of the biggest challenges in NZ is the lack of NZBN or mandatory identifiers. From a sole trader perspective, a difference of 5 days in payment times is not enough encouragement. There needs to be a greater incentive. Keen to work with the group to identify opportunities to get sole traders onboard with eInvoicing.

An organisation is an early adopter from 2020 and shared lessons learned with the group. Australian suppliers are successfully sending eInvoices to this organisation and this works well.

A member organisation sees a small number of invoices are coming through, but their value is increasing. One of their products is recently enabled for Peppol via their Access Point Provider.

A member organisation is in the discovery phase with their software. Company invoices are raised outside of this billing platform - waiting to complete their ERP implementation before progressing.

A member organisation’s proof of concept for sending is underway, and they are currently in the ‘build’ phase. Go-live scheduled for January to March 2025. They have experienced similar challenges to another member so will reach out to them. Also investigating a new billing system. Issues encountered include credit balance transfers – how to achieve them, and customer balances and adjustments on invoices.

A member organisation has made good progress on functionality, live in AP and non telco billing. Technology is enabled but volume and scale is a challenge – looking forward to bulk registration. Telco billing is complex so consideration needed on how this might move to eInvoicing.

A member organisation has seen a steady trickle of suppliers, hoping to have more common suppliers sending soon. Approximately 60% of suppliers are from 2 leading software providers. Still exploring eInvoice send functionality to ratepayers and customers.

A member organisation is completing a bulk registration round which will add tens of thousands of SME eInvoicing registrations in NZ. Already seeing ‘network effect’ in place from another member organisation going live. Customers who have received an eInvoice then send an eInvoicing themselves. In last 2 months they have seen a 50% growth in send volumes.

• Sending to SMEs – collective efficiency – for example, test once with them and send to all
• Emphasised most of value for SME customers is in receiving an eInvoice
• Happy to talk to any businesses about their journey sending eInvoice as own business.

A member organisation has recently implemented a new system in accounts payable. This automation is helping to speed up their activity and will allow them to become eInvoicing enabled. Will initially look at accounts payable then receivable.

A member organisation has recently moved their ERP to the cloud. Started working on a shared services transformation business case (eInvoicing is in that scope). 

A member organisation is live in AP and continue to work with suppliers to build awareness and uptake. Exploring options for sending capability and will have a clear plan for implementation of this over the coming months.

Closing remarks

The chairs completed meeting formalities, and a group photo was taken for social media posts. 

Meeting closed at 2.52 pm.