Businesses across New South Wales can expect to see quicker savings and payment times once mandatory e-invoicing is introduced for all government agencies across the state on 1st January 2022. It will it will bring a host of other benefits for small and medium businesses when sending and receiving invoices to the government. The implementation will also reduce errors and save suppliers and buyers a significant amount of money.
Small and Medium Enterprises are the backbone of Australia’s economy and the projected savings is fantastic news for small business owners. There is an estimated shared saving of around $20 each time e-invoicing replaces a paper invoice and around $17 each time it replaces a PDF invoice.
Based on the 4.2 million invoices across NSW government in 2019, a shared saving between the suppliers and NSW government is projected to be around $71 million.
The mandate will apply to the delivery of goods and services up to $1 million in value.
This will result in giving the government more time to spend helping customers, and businesses can spend more time focusing on their operations.
The New South Wales Government is leading the charge to introduce and promote the uptake of e-invoicing across Australia.
The funding was allocated through the Digital Restart Fund to set up an e-invoicing service. The government says research shows e-invoicing rates in Australia span from 15 percent for small businesses to 23 percent for large businesses, compared with 28 percent across Europe and 40 percent in Denmark and Finland.
E-invoicing has huge potential to improve current interactions between SMEs and the government.
The State Government believes that the mandate will enhance the government’s existing Faster Payment Terms Policy, by ensuring that the accounts payable teams in government agencies receive invoices within minutes, enabling payment to eligible small businesses within five business days.
One of the biggest problems for small businesses across NSW is cash flow. The state governments want to take steps to make sure that properly rendered invoices reach and are actioned by the right teams as quickly as possible.
Suppliers will still have a choice though. They can choose to use e-invoicing or continue to invoice government agencies through their current processes.
The Upcoming NSW State Budget
NSW Treasurer Dominic Perrottet announced that the 2021–22 NSW budget will be handed down this year on Tuesday, 22 June 2021.
This date is a return to the usual budget release date, after it was deferred last year until November due to the impacts of the ongoing covid-19 pandemic.
The government is forecasting a positive outlook for the NSW economy, which is welcome news compared to what the state experienced this time last year.
“Twelve months ago, we were taking the first tentative steps out of lockdown and at the same time facing forecasts by the Commonwealth of unemployment as high as 15 percent and predictions of economic Armageddon,” said the Treasurer.
“The NSW government responded with an unparalleled package of measures including tax relief worth billions, grants of up to $10,000 to assist small businesses and a focus on continued infrastructure investment and jobs creation.”
The current NSW unemployment rate stands at 5.4 percent, down from the peak 7.2 percent last year, as an excess 270,000 workers returned to jobs.
“We approached the pandemic with a dual focus, keeping people safe and the economy and NSW borders open, and things are looking much brighter now,” the state Treasurer continued.
The Treasurer said consumer confidence is becoming more buoyant and is at the highest level in 10 years.
Since the covid-19 pandemic started, the NSW government committed $29 billion towards health, economic and social support measures.
The state government plans to continue to invest in supporting people and creating jobs through its $107 billion infrastructure program.
In an encouraging sign of positivity, a recent NAB business survey recorded its highest business confidence reading ever in the history of New South Wales.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
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