eInvoicing is rapidly becoming more widely used within New Zealand and there are some great benefits. If you are a busy business owner and have been putting eInvoicing in the ‘to do later’ pile, now’s the time to find out more.
What is eInvoicing?
eInvoicing is essentially the electronic transfer of an invoice, directly from your financial system to your customers, or from your suppliers to you, even if you use different systems.
Right now, you probably create an invoice in Xero and then send it as a PDF by email to your customer. With eInvoicing there is less manual handling and processing so there should be less errors, less admin and less delays. eInvoicing is part of a government initiative to help businesses be paid on time.
Benefits of eInvoicing
There are some key benefits to eInvoicing for businesses of any size.
- Faster payment: eInvoicing is designed to reduce errors and delays. By sending your invoices directly from Xero to your customers’ accounting system, it will arrive ready to be approved and paid. This should result in faster payment and better business cash flow for you.
- Reduced admin: eInvoicing will reduce your admin. Once you have registered for eInvoicing you can receive eInvoices from your suppliers directly into Xero. All you will need to do is approve the invoice for payment, saving you valuable time and costs.
- More secure: eInvoices are impossible to lose and minimise the risk of fake or compromised invoices. Your details, and your customer or suppliers details, are validated, audit logs are kept and strict protocols are followed.
- Improved financial management: eInvoicing allows for a lot of detail on each invoice to be retained, which in turn, supports financial analysis, forecasting, planning and budgeting.
- Compliant with new GST rules: The IRD have recently updated their rules for record keeping for GST returns, making it simpler and more flexible. The great news is with eInvoices is fully compliant with these rules!
How to get started with eInvoicing
There are two key steps to getting started with eInvoicing.
- Register to receive eInvoices with the Peppol network. You can do this directly within Xero. You will need your business information to hand including your NZBN. Once you are registered you will start to receive eInvoices.
- Sending eInvoices from Xero is simple. You first need to confirm that your customer is registered on the Peppol network to receive eInvoices. Once this is done, you will just select “send as an eInvoice” toggle before entering the details.
Once you’ve registered you can download an ‘eInvoicing capable’ badge to add to your email signature. An easy way to let your customers and suppliers know you are ready to send and receive eInvoices.
We are here to help
If you’d like to get started with eInvoicing, but need a little support, please get in touch.