E-invoicing could bring AUD $22.5 billion boost to Australia

Research commissioned by Avalara and produced by the Centre for Economics and Business Research (Cebr) has found that full adoption of electronic invoicing (e-invoicing) could deliver economic gains of AUD $22.5 billion annually for the Australian economy.

The report, which examined six key international markets—Australia, France, Germany, India, the United Kingdom, and the United States—estimates a combined annual economic opportunity of USD $616 billion globally through productivity enhancements, faster payments, and reductions in fraud.

According to the study, transitioning from traditional to electronic invoicing offers significant economic returns and leads to tangible financial and operational efficiencies for businesses of all sizes. In Australia, the analysis estimates that each firm adopting e-invoicing could achieve around AUD $970,000 in annual productivity gains.

Quantified productivity advantages

The research draws comparisons across the global markets under review. France, for example, could see annual gains of USD $16.9 billion, while Germany may realise USD $13.3 billion in economic benefits. In the United Kingdom, projected gains are USD $11.2 billion, India may unlock USD $3.7 billion, and businesses in the United States stand to see gains of up to USD $116 billion each year.

"E-invoicing isn't just a compliance solution, it's a growth engine for global economies and businesses," said Ross Tennenbaum, President at Avalara. "Our research with Cebr proves that the faster we help businesses transition to electronic invoicing, the more we can do to help unlock billions in productivity and day-to day efficiencies."

In Australia, firms that have implemented e-invoicing are receiving payment up to 2.5 days sooner than those relying on paper or more manually processed digital invoices. This represents a 15% improvement. Across all six markets covered, the average payment cycle is shortened by 1.4 days with e-invoicing, and the process saves approximately 39 minutes per invoice.

US-based companies using e-invoicing are achieving savings of USD $15.16 per invoice received, equating to annual productivity improvements of approximately USD $1.1 million per firm. In France, large businesses have reportedly been able to reclaim up to 54.4 minutes for each invoice, significantly lowering processing time and freeing finance teams for higher-value tasks.

Adoption among SMEs

The study highlights a disparity in e-invoicing uptake between large enterprises and small to medium-sized businesses (SMBs). Larger firms globally process 72% of invoices electronically. In contrast, SMBs, which issue and receive hundreds of invoices weekly, have an adoption rate of just 37%. The report notes that ongoing reliance on manual processes among smaller firms could be costing them in both time and operational expenditure.

Key challenges discouraging SMBs from transitioning include the need for staff training and complicated integration processes, factors that have affected 43% of respondents. Nevertheless, the study reveals that awareness of e-invoicing is high, with 95% of businesses using manual invoicing stating they are aware of the technology. Of these, 73% expect to complete adoption within five years.

Payments and cashflow

E-invoicing offers savings and cashflow benefits through faster payments. In Australia, savings are estimated at around AUD $20 per invoice, with payments arriving 5% faster on average. In the United States, adoption led to an 8% acceleration in payment speed, with large firms achieving cashflow improvements in excess of USD $14,000 annually. In the UK, businesses observed a drop in late payments of 4.8%, the largest reduction among the six countries surveyed. Indian businesses noted more modest time savings, with accounts payable processing times reduced by 6.8 minutes per invoice. Despite smaller time gains, 64% of Indian respondents said they were satisfied with the positive effects of e-invoicing.

Security and compliance improvements

The research also suggests that e-invoicing is valuable in helping prevent fraud and assist with regulatory compliance. In the previous year, 44% of surveyed businesses across the six markets had faced tax fines and 34% had experienced invoice fraud. Average costs reached USD $23,500 for tax fines and USD $18,100 from fraud losses. By contrast, among businesses using e-invoicing, only 20% reported facing fines or fraud.

E-invoicing adoption is associated with a 27% reduction in tax fines, a 30% reduction in fraud and data breaches, and a 40% decrease in lost invoices. These findings indicate improvements in financial security and boost operational confidence among businesses making use of the technology.

Policy environment in Australia

E-invoicing, while not mandatory in Australia, is increasingly being promoted by government initiatives. More than half of businesses surveyed indicated awareness of these policies, and 58% reported they were already preparing for the possibility of future legislative requirements. This situates Australia among the most proactive nations in terms of voluntary e-invoicing compliance.

Researchers for the report surveyed 1,720 businesses with at least 10 employees across the six countries, with economic modelling to assess the impacts at the invoice, firm, and economy-wide levels. All monetary figures presented in the report are consistently converted to USD for comparison.