What Is Peppol?
Peppol stands for Pan-European Public Procurement Online. It’s a global system that aims to help businesses securely exchange eInvoices and other documents with their trading partners. By using a standardised format, Peppol makes it easier for suppliers and buyers to communicate, both locally and internationally.
In Australia, the ATO became the official authority for Peppol in 2019, overseeing the implementation and maintenance of this framework within the country. This includes defining local requirements, accrediting service providers, and promoting adoption across both government and private sectors.
Why Is Peppol Being Adopted?
The Australian Government is adopting Peppol eInvoicing to streamline business operations, boost productivity, and enhance financial security. eInvoicing eliminates the need for manual data entry or handling of paper and PDF invoices. Key benefits include:
- Efficiency and Cost Savings: Processing an eInvoice costs less than $10, compared to around $30 for a paper invoice.
- Faster Payments: eInvoices are directly transmitted between accounting systems, reducing delays and improving cash flow.
- Enhanced Security: The secure Peppol network reduces the risk of invoice fraud and payment scams.
- Environmental Impact: eInvoicing reduces paper use, contributing to sustainability efforts.
The government projects that widespread adoption will enhance economic productivity and encourage more seamless international trade.
Are All Businesses Mandated to Use Peppol?
As of now, there is no universal mandate requiring all Australian businesses to adopt eInvoicing. However, many government entities are already using Peppol and encouraging their suppliers to do the same. The adoption is driven by initiatives like the Statutory Review of the Payment Times Reporting Act 2020, which emphasises the benefits of eInvoicing in reducing payment times and improving supply chain efficiency.
Some states, such as New South Wales and Queensland, have mandated eInvoicing for government agencies, while others plan to follow suit by 2025. For private businesses, adoption is voluntary but strongly recommended due to the competitive advantages it offers.
How to Get Started
Businesses looking to implement Peppol eInvoicing can start by checking with their accounting software provider to ensure compatibility. Most major software platforms now support eInvoicing, like Xero, MYOB, and QuickBooks. In fact, some of you have reached out to us regarding the notification from Xero advising users of their automatic registration into the Peppol network earlier this month.
For tailored advice, or if you’re unsure about how to begin, the ATO provides comprehensive resources, including their Guide to Receiving and Processing eInvoices, and support through its eInvoicing team.
Contact for Questions
For more information about Peppol and eInvoicing, contact the ATO’s eInvoicing team, or explore resources on the ATO’s eInvoicing page.
