From 1st January 2020, Commonwealth Government agencies have committed to paying e-Invoices within five days or they will pay interest on any late payments.
The five day e-Invoicing payment policy will apply to contracts valued up to $1 million, where a supplier and a Commonwealth agency both use the internationally established framework for delivering and receiving invoices in an electronic form.
e-Invoicing will improve business cash flow through faster payment times and deliver significant benefits and efficiencies to suppliers and the Government by reducing transaction costs and handling errors.
Last month the Government passed legislation through the Parliament to enable Australia to implement the internationally-recognised framework for e-Invoicing. Having a standardised framework enables buyers and suppliers to transact using e-Invoices even if they have different software.
The Government is now prioritising e-Invoicing adoption across the Commonwealth. The Department of Finance and Services Australia will be the first Commonwealth agencies to accept e-Invoices from 1st January 2020, with other agencies implementing the capability over the course of the year.
The Government encourages state governments and the business community to follow their lead using the new framework for e-Invoicing.
A maximum 20 day payment term will continue to apply in instances where e-Invoicing is not used.