Datacom making the shift to eInvoicing with MBIE

Invoicing is a fundamental part of doing business, but traditional ways of invoicing can create hassles. Paper-based or PDF invoices have to be printed, posted or emailed, and buyers often need to manually enter invoice information into their financial systems – all of which can be time consuming and prone to introducing errors.  

eInvoicing – the digital transfer of invoice information from one system to another – aims to reduce these hassles. 

Graham Young, Director of Finance Operations at Datacom, explains that once a supplier prepares an invoice, eInvoicing enables the seamless transmission of that invoice to their customer via an Access Point Provider. This is a secure gateway that connects businesses and their software to the eInvoicing network: “it’s a portal that allows everybody to speak the same language.” 

With eInvoicing, mandatory information is shared, allowing customers to more easily review the products or services provided before they approve the invoice and make payment. Digitally receiving an invoice containing predefined information also eliminates any need to scan a paper or PDF invoice to extract the required data, or to populate any missing data, he says. 

While still relatively recent here, eInvoicing is on the rise.  

In particular, the New Zealand Government recently communicated that businesses that trade with government organisations can expect eInvoicing to become the norm, and some are already making the transition to get ahead of the curve. 

Datacom is among them, says Graham, and has just made the shift to eInvoicing with MBIE. 

He says this will enable invoices to be reviewed in a more timely and secure way, and will potentially facilitate earlier payment. The Australian Government, for example, pays eInvoices in five days where both the supplier and buyer use its eInvoicing portal.  

“There are 280 million business-to-business invoices exchanged within New Zealand each year and when we look at the value of what that costs to transact for both suppliers and purchasers, the potential value of savings for the economy, from a shift to eInvoicing, is about $4.4 billion over the next 10 years,” says MBIE’s Chief Operating Officer – Corporate Services, Michael Alp.  

Aside from the economic gains, Alp says the move to eInvoicing will see payments processed more quickly and the system-to-system method is also inherently more secure and less susceptible to fraud.   

“From a supplier perspective, it means they are more likely to be paid faster because it goes from system to system rather than a PDF invoice which can take up to three days to get into a particular system. eInvoicing is also more secure, where emailed invoices can be intercepted or modified, with system to system there isn’t the opportunity.” 

The move to eInvoicing is timely with the amount of reported invoice fraud across Australia and New Zealand reaching a quarter of a billion dollars – and the unreported total is likely much higher.  

eInvoicing in New Zealand has made significant progress with more than 21,000 New Zealand businesses now registered to received eInvoices, including 40+ government agencies. 

MBIE has also made big gains over the last year, with between 10-20% of all MBIE invoices received now being eInvoices.  

“Datacom is a longstanding partner for MBIE and has worked with us and numerous other government agencies for many years, and they were very responsive when we said we wanted to move to eInvoicing. Datacom’s teams have mobilised quickly to be a real leader in this space, and I am sure more organisations will follow as a result.” 

Datacom MD Justin Gray says the opportunity to adopt a process that is both more efficient and more secure is something his team was keen to support. 

“It is great to see MBIE and our government partners leading the way with the shift to eInvoicing and we were pleased to get involved as an early adopter. Our teams worked well together to make it a smooth transition and we would encourage other organisations to make the move.” 

MBIE helped provide technical advice around the PEPPOL standards and then both teams worked together to resolve any obstacles to get ready for go live this month [March 2024]. 

Lisa Moore, MBIE’s Head of Commercial Operations and Assurance says Datacom’s shift to eInvoicing has been rapid and the collaboration and communication between the two teams was integral to the success of the go live.  

“We’re already seeing some real efficiencies as a result of the move to eInvoices.” 

 So how do businesses make the transition to eInvoicing? 

Graham identifies a number of steps. To start, he suggests engaging people in your business about what eInvoicing is, what changes will be required to embrace its benefits, and a timeline for these. Designing and documenting eInvoicing processes will help back this up.  

He also suggests ensuring customer and vendor data is updated so all mandatory eInvoicing fields can be populated, and prioritising eInvoicing when onboarding new customers and vendors. 

Most finance and accounting software already used by small and medium-sized businesses will enable eInvoicing. Larger organisations, says Graham, may need to identify an Access Point Provider that can seamlessly access their ERP, and then build and test an integration that will support their eInvoicing processes.