From January 1, 2020, Commonwealth Government agencies will start paying e-Invoices within five days or 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.
Minister for Finance, Mathias Cormann, said 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 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,” Cormann said.
“We are now prioritising e-Invoicing adoption across the Commonwealth. The Department of Finance will be the first Commonwealth agency to accept e-Invoices, with other agencies implementing the capability over the course of the year.
“We encourage state governments and the business community to follow our 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.
More information is available on the ATO web site.