What Is E-Invoicing And Why Is It A Good Thing?

If you have ever made a purchase (it is impossible that you have not) you are provided with a receipt once the transaction is made, otherwise known as an invoice. Now those annoying pieces of paper are being digitized which is called an e-invoice.  

In this article, we will understand what an e-invoice is, why do we need it, why should we use it, who can use it, what are the benefits of using an e-invoicing system and how is it saving us from document archives as the government has introduced e-invoicing in Australia. 

What is an e-invoice? 

Just like email is an electronic version of conventional mail, an e-invoice is the electronic version of a traditional invoice or bill receipt. The idea is to digitize and standardize the document while saving the environment as well.  

The Australian government laws require its residents to keep with them the invoices for the transactions that were made in the past five years, which itself is a huge task. To store the receipts and to maintain the records in the documents archive. 

Why should I switch to e-invoicing? 

There are so many good reasons to switch to e-invoicing. The payments are more secure, and the information is encrypted, reducing costs related to handling the documents, and all the cash flow and expenditures are more visible.  

Due to the invoices being standardized and computer-generated, the chances of errors are non-existent. Not using paper for printing invoices contributes positively to the efforts to save the environment and reduce the carbon footprint.  

How does e-invoicing work? 

The Australian government has adopted the PEPPOL network to mainstream e invoicing in Australia. It is a centralized system that connects many businesses through its network. Whenever an e-invoice is generated on the request of person A for person B, the e-invoice is sent to PEPPOL Access Point which validates if the e-invoice generated is following the standardized format and if it really was person A who generated the invoice and not someone else. 

Once person A’s PEPPOL Access Point validates the legitimacy of the request, it communicates with person B’s PEPPOL Access Point on the PEPPOL network and forwards the invoice to person B’s system. Every transaction and its records are then saved on the cloud and can be accessed anywhere by the user. 

Can anyone use e-invoicing?  

If you are a business owner or a service provider, you can subscribe to the service. The Australian government has made it mandatory for the Commonwealth agencies to adopt e-invoicing based on PEPPOL format, with effect from July 1st, 2022. 

Is e-invoicing more expensive? 

You may be wondering if switching to a service that provides you with e-invoicing solutions is worth the expenses that come with it? To answer this question, we must first understand how different it is from traditional invoicing, and how much money are you saving by switching to e-invoicing. 

A traditional paper invoice with all its associated processes and the resources required to keep the system running approximately cost around $28 per invoice. Whereas a computer-generated document, the PDF version of the invoice, costs around $23 per invoice. Now compare it with an e-invoice, which costs around $12 per invoice and can go even lower depending on the volume. 

So, to answer the question, no, e-invoicing in Australia is not more expensive than a traditional invoicing system and it is better that you switch to e-invoicing. 

What are the benefits of using e-invoicing?  

Just like any other digital alternative to existing processes, e-invoicing comes with a lot of benefits that make it better and more attractive for businesses to adopt e-invoicing. A seamless customer experience is what every business tries to achieve, and what better adds to the seamlessness of customer experience than an efficient and secure payment method, e-invoicing brings efficiency and security to business transactions, making the quicker and more secure.   


The world is being digitized at the fastest rates ever, and the government’s adaption of e-invoicing in Australia is a step towards it. The aim is to centralize the invoicing system, make invoices a standard document, reduce paper usage to counter the climate change and obsolete the document archives. That’s why getting professional invoicing solution is the way to go in today’s world.  

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