Businesses that issue electronic invoices could have the right to require similar invoices from their trading partners

22 December 2021

In brief

The Federal Government last week announced its intention to introduce a “Business eInvoicing Right” (BER), requiring all businesses in Australia to comply with any request made by an eInvoicing enabled trading partner to send eInvoices over the Peppol network. Large businesses will need to be enabled to comply with the BER by July 2023, medium businesses by July 2024 and small businesses by July 2025 under the Government’s proposal. 

The BER follows on from the Federal Government's mandate to adopt Peppol eInvoicing for its procurement by July 2022 and several State Government Peppol implementations and is being proposed to give certainty to the market that there will be the required trading volumes needed to unlock the benefits of eInvoicing across the economy.

The BER will effectively make it mandatory for all businesses to be Peppol enabled by July 2025 and will require technology to be implemented. It also presents businesses with opportunities to digitise and strengthen O2C and P2P processes and controls and align these with broader ESG objectives. However, an implementation period of 18 months for large businesses in particular will not leave much time for projects to be completed and so early planning is recommended.

In detail

The Australian and New Zealand Governments have recently adopted the international electronic invoicing (or e-invoicing) standard, known as Peppol, which allows suppliers and purchasers to send and receive invoices over a common network. Much like a mobile telephone network, the idea is to connect your systems once to Peppol and be fully interoperable with every other participant on the network.  

The introduction of Peppol is intended to remove the need for suppliers to connect to different “closed-loop” EDI systems and do away with traditional paper and PDF invoicing. Doing so will unlock productivity savings in the order of $2.8bn pa across the economy.

It is already mandatory for all Commonwealth Government agencies to be Peppol enabled by 1 July 2022 and for Commonwealth agencies, in many circumstances, to pay suppliers who issue e-invoices over Peppol in 5 days. State Governments, particularly in NSW and Victoria, are also becoming Peppol enabled, with NSW agencies needing to comply with its Peppol mandate from 1 January 2022.

According to the Treasury consultation paper released by the Digital Economy Minister, Senator Jane Hume, the Federal Government has identified that getting volume into the Peppol network is critical for giving businesses certainty to invest in the technology and process changes needed to become Peppol eInvoicing enabled and to realise the many benefits available. 

To this end, it is estimated that Australian businesses exchange more than 1.2 billion invoices a year and about 90 per cent of invoice processing is still fully or partly manual. And to date only 10,000 out of an estimated 2.4 million Australian businesses are Peppol enabled.

To kick start the network effect required to drive adoption, the Government is now looking to further expand the Peppol eInvoicing mandate by giving businesses that are enabled to receive Peppol eInvoices the right to require their trading partners to send them a Peppol eInvoice, known as the Business eInvoicing Right (BER). 

Under the proposal being consulted on by the Treasury the BER would:

  • Be legally enforceable, with monitoring, compliance and enforcement mechanisms administered by a Federal Government regulatory body;
  • Be phased in over a three year period - under one proposal, large companies with a turnover of more than $50 million would be brought into the BER scheme from mid-2023. It would apply to mid-sized businesses with a turnover of $10 million to $50 million from mid-2024, and small businesses with a turnover of less than $10 million from mid-2025; and
  • Potentially draw on concepts defined in the Payment Times Reporting legislation and Taxation legislation to identify eligible entities, calculate business turnover thresholds and manage the transition period to implementation etc.; 
Example: How Businesses could exercice the BER: 

Step 1: Business A has the capability to receive eInvoices, and wants to receive eInvoices when trading with Business B.

Step 2: Business A verifies that Business B is covered under the BER, and requests that Business B sends eInvoices to Business A. 

Step 3: Business B verifies that Business A is covered under the BER, and must send eInvoices to Business A.

Government consultation is currently open for the BER, with submissions closing on 25 February 2022. In addition to the BER, Government is also seeking views on how to ensure that existing investments made by businesses in EDI systems can coexist and be complemented by Peppol, whether eInvoicing should be expanded to other procurement documents such as Purchase Orders etc, and whether payments should also be integrated into the eInvoicing process. 

If adopted, the change is expected to accelerate uptake by ensuring businesses that invest in e-invoicing will have certainty that they will be able to use it with their trading partners, thereby creating the network effect needed to unlock the productivity, security and environmental benefits being sought from eInvoicing.

The takeaway

  • There are many businesses in Australia currently turning over more than $50 million - under the current proposal, these businesses will have 18 months to become Peppol eInvoicing compliant, which is not much time to plan and implement the technology and business process changes needed to comply with this measure. Projects should be initiated as soon as possible to ensure timing can be met.
  • Our experience with Peppol eInvoicing projects to date, both in Australia and overseas, is that there are significant potential benefits to be realised through eInvoicing. However, unlocking these benefits requires more than simply implementing the technology:
    • Operational objectives (including faster payments, strengthened controls, process efficiency, improved data quality among others) should be defined and the Peppol eInvoicing configuration should be designed in line these objectives.
    • Customer and Supplier capabilities and preferences also need to be considered - eInvoicing is a two sided equation and any efficiency gain will be lost if suppliers and customers cannot comply with your requirements, forcing invoice processing “offline”.
  • A Peppol project can be treated as a compliance requirement, or a transformational opportunity to deliver benefits to your organisation, customers and suppliers.

PwC sits on the joint Australia / New Zealand Government Peppol working group and is also a member of the Community of Practice and Operational Leaders forum convened by the ATO. We have been closely engaged with the localisation of Peppol in Australia. 


Contact us

Brady Dever

Partner, Tax Reporting and innovation - Financial Advisory Alliances, PwC Australia

Tel: +61 431 759 399

Adam Lai

Partner Alliance Lead, PwC Australia

Tel: +61 400 435 621