What is eInvoicing?
eInvoicing is the digital exchange of invoice information directly between buyers’ and suppliers’ financial systems, even if these systems are different.
The transfer of invoice information is made possible by using enabled software or an access point provider who use common international standards (Peppol), allowing different systems to ‘speak’ to each other.
Check out our video to learn how eInvoicing will help Kiwi businesses:
How it works
- A supplier’s financial system generates an invoice for the buyer.
- The invoice information passes through the eInvoicing network, where it validates information like NZ Business Number (NZBN).
- The invoice information is passed to the buyer’s financial system where it is reconciled against purchase details and is ready to be paid. (The NZBN is used to ensure the eInvoice is directed to the right buyer.)
Access point providers (secure gateways) connect businesses to the eInvoicing network.
Benefits of eInvoicing
With eInvoicing, businesses no longer need to generate paper-based or PDF invoices that have to be printed, posted or emailed, and buyers no longer need to manually enter these into their financial system. It improves accuracy and security, reduces process time and speeds up payments.
By adopting eInvoicing, your business has the opportunity to share in the following benefits:
- Faster payment and improved cash flow
- Reduced admin
- Reduced processing costs
- Direct and secure information
- Universal connection
- Improved financial visibility
- Available to any business
- Improving our economy
eInvoicing meets IRD’s tax invoice and record keeping rules
IRD has published changes to the rules for invoices and record keeping. Some key points:
- You'll no longer need to keep a single physical document holding the supply information, such as a tax invoice, credit note, or debit note. Your transaction records, accounting systems and contractual documents may, in combination, contain all the information you need to support the figures in your GST returns.
- New terms will come into effect, for example the term ‘Tax invoice’ will be replaced with ‘Taxable supply information.’
- Special wording not required: you may continue to provide taxable supply information in a single document marked as a 'tax invoice', however you are not required to include this wording when providing taxable supply information.
- Sellers can provide taxable supply information to a customer using an automated direct exchange between the buyer's and seller's software, for example PEPPOL eInvoicing.
Rules for tax invoices are changing on 1 April 2023(external link) — Inland Revenue