Just 1% of Australian businesses have signed up for eInvoicing. Now, the ATO is set to double down on the time-saving scheme

Less than 1% of Australian businesses signed up for the eInvoicing scheme in the two years since its launch, with the Australian Taxation Office (ATO) now considering ways to boost adoption of a system designed to save time and reduce fraud risks for small businesses.

Introduced in December 2020, eInvoicing is a digital system allowing businesses to send and receive invoices through their accounting software, eliminating the need for physical documents, scanned papers, or PDFs.

Treasury adopted the Pan-European Public Procurement Online (Peppol) framework to run the system, which it claims can slash the time and cost of producing invoices while reducing the risk of business payment systems being compromised for invoicing scams.

Most major federal government agencies are now eInvoicing-enabled, providing payments within five days to their business suppliers. State and territory governments are following in Canberra’s footsteps.

But on Monday, a consultation paper focused on payment times between big businesses and their smaller suppliers revealed just 25,419 of Australia’s estimated 2.5 million businesses signed up for Peppol as of December 31, 2022.

“In general, adoption of eInvoicing in Australia is low,” the report said.

It also noted take-up was sluggish despite the emergence of “eInvoicing Week” in 2022, which saw the ATO engage in public outreach activities designed to highlight the system.

“In promoting eInvoicing Week, the ATO noted that it expected to see ‘significant growth in the use of eInvoicing over the next 12 months,'” it added.

In the shadow of that report, the ATO has now confirmed the end of a consultation with small businesses, accounting platforms, and other stakeholders, intended to “establish current knowledge and awareness levels” and determine how to better promote the system.

Lessons learned from that consultation will help the ATO “develop supporting materials for various segments and validate their effectiveness,” the department said.

Small businesses yet to encounter the Peppol system can reasonably expect the ATO to intensify its outreach efforts in 2023 as a result, as it pursues measures likely to slash invoicing scams and reduce payments channelled through the ‘shadow’ economy.

“Insights will also be communicated to accounting software providers to improve future user experiences,” the tax office added.

SmartCompany has contacted the ATO for comment.