The Role of Peppol Network and Its Impact on Businesses
Australia is on the path to revolutionizing its invoicing processes through the adoption of e-Invoicing. While the Australian Taxation Office (ATO) has been promoting the Peppol network for several years, recent initiatives aim to further enhance the efficiency and transparency of both B2G (Business-to-Government) and B2B (Business-to-Business) transactions. Here’s a detailed look at what the current and upcoming changes entail, and how businesses can prepare for the transition.
What the Law Says About E-Invoicing in Australia
B2G e-Invoicing
Although there is no official mandate for B2G e-Invoicing in Australia, the ATO has been actively encouraging public entities to transition to electronic invoicing using the Peppol network. Many public administrations in New South Wales, South Australia, and all Commonwealth agencies already accept e-invoices in the Peppol BIS 3.0 format. The upgrade to the Peppol INTernational (PINT) A-NZ format is set for May 15, 2025, to align with global standards.
While the Peppol Australia network is highly promoted, other formats for B2G transactions are still permitted:
- Paper-based invoices
- PDF invoices with an e-signature or complete audit trail
- EDI (Electronic Data Interchange)
Invoices must be archived for a minimum of 5 years.
B2B e-Invoicing
For B2B transactions, the Australian Taxation Office allows invoices in mutually agreed formats. This can range from paper and unstructured PDF to fully structured EDIFACT and XML-based formats. However, the ATO is encouraging businesses to adopt Peppol e-Invoicing Australia via the Peppol Australia network using the Peppol BIS 3.0 format. The transition to the PINT A-NZ format is planned for 2024 and 2025 to further strengthen e-Invoicing in Australia.
The Australian Peppol Authority
The Australian Taxation Office (ATO) serves as the Australian Peppol Authority. It defines the Peppol standards for GST (Goods and Services Tax) invoices and oversees the selection and approval of Peppol access points. The ATO collaborates with providers and businesses to ensure the framework meets diverse needs.
Currently, the standard used is PEPPOL BIS Billing 3.0. The ATO has accredited over 40 Peppol access points, ensuring robust and widespread access to the network.
How to Implement E-Invoicing in Australia
To engage in e-Invoicing, companies must register with the Peppol network. Businesses can utilize their existing e-Invoicing software, select a new service provider, or find an online solution. SPS Commerce, previously known as TIE Kinetix, is a trusted Peppol access point for both Australia and New Zealand.
An e-Invoice is akin to a paper invoice in that it must include the Australian Business Number (ABN), the date, and the total amount. The key difference lies in the transmission method, which, in this case, is through the secure Peppol network.
E-Invoices should be archived for five years, adhering to the same record-keeping rules as paper invoices. This includes protecting the records from unauthorized changes.
State and Territory Specificities
Since July 1st, 2022, the e-Invoicing mandate has applied to B2G transactions across Australia. Here are some state-specific updates:
- New South Wales: A pioneer in implementing e-Invoicing.
- South Australia: Predominantly receives e-Invoices, with fewer than 10 agencies not yet ready.
- Western Australia: Ran a pilot program in 2023 to be e-Invoicing ready by Q4 2023.
- Queensland: Transitioned to e-Invoicing during 2022/2023.
- Australian Capital Territory: Also transitioned to e-Invoicing in 2022/2023.
The Business E-Invoicing Right (BER) Initiative
The ATO is also working on the Business E-Invoicing Right (BER) initiative, which would allow companies to require their customers or suppliers to use e-invoicing via Peppol. This initiative aims to accelerate the adoption of e-invoicing, enabling businesses to fully leverage their investments in digital invoicing. However, the BER initiative has not yet been formally approved and remains pending.
Invoices must be archived for 5 years.
Timeline
- 2019: Start of the B2G e-Invoicing Initiative
- May 15, 2025: Peppol PINT A-NZ becomes the new standard for all B2G and B2B e-invoices. The Peppol BIS 3.0 format will be deprecated.
Technical Details
Peppol Network & Certification
The ATO aims to maximize the use of the Peppol network, and many public administrations are already connected. Businesses must use certified Peppol Access Points to operate on this network. These access points are e-invoicing service providers that have undergone accreditation to ensure the security and validity of their solutions.
Peppol Company Identifier
Businesses identify themselves on the Peppol network using their Australian Business Number (ABN). This ensures accurate addressing and proper recipient identification for e-invoices.
Peppol Invoice Format
E-invoices must be formatted using the Peppol PINT A-NZ format. The current Peppol BIS 3.0 format will be phased out by May 15, 2025, in favor of the more global PINT A-NZ standard.
Other Invoicing Methods
While Peppol is the recommended method, it is not the only option. Companies can choose from various invoicing methods based on mutual agreements between sender and receiver, including paper, PDF with e-signature or audit trail, and EDI.
Australia’s push towards e-Invoicing represents a significant shift towards greater efficiency and transparency in business transactions. Businesses should start preparing now by adopting the Peppol network, understanding the upcoming changes, and ensuring their invoicing systems are compliant with the new standards.
For more detailed information and resources, visit the ATO’s e-Invoicing homepage. Stay ahead of the curve and leverage the benefits of digital transformation in your invoicing processes.
Additional Resources
- ATO – E-Invoicing Homepage
- Certified Peppol Access Points in Australia
- PINT AN-Z Specifications
- Public Entity Supervising E-Invoicing in Australia
Prepare your business for the future of e-Invoicing in Australia and ensure compliance with the latest regulations. The digital transformation is here, and it’s time to embrace it fully.
