Productivity surge and faster payments among key benefits of electronic invoicing

Widespread adoption of electronic invoicing could inject more than A$22 billion into the Australian economy each year, according to a global study released by tax compliance automation firm Avalara.

The report, prepared in partnership with the Centre for Economics and Business Research (Cebr), found e-invoicing could generate an annual productivity boost of US$15.1 billion in Australia — approximately A$22.5 billion — through faster payments, reduced fraud, and improved operational efficiency.

Across six countries studied — Australia, the United States, the United Kingdom, France, Germany and India — the total annual economic benefit was estimated at US$616 billion.

Significant gains for Australian businesses

The report found that an average Australian business could save nearly A$970,000 each year through e-invoicing efficiencies. Faster processing, quicker payments, and less time spent chasing invoices all contributed to the economic lift.

“E-invoicing isn’t just a compliance solution, it’s a growth engine for global economies and businesses,” said Ross Tennenbaum, President of Avalara. “The faster we help businesses transition, the more we can unlock billions in productivity and day-to-day efficiencies.”

Australian businesses using e-invoicing reported receiving payments up to 2.5 days faster — a 15% improvement over traditional methods. The average cost savings amounted to A$20 per invoice.

SMBs lag behind larger firms

While large companies have embraced e-invoicing, smaller businesses trail behind. Globally, 72% of invoices processed by large firms are electronic, compared to just 37% among small and medium-sized businesses (SMBs).

Nearly half of SMBs cited staff training and integration challenges as barriers to adoption. Despite that, 95% of businesses still using manual methods are aware of e-invoicing, and nearly three-quarters expect to adopt the technology within five years.

Cashflow and fraud reduction among top benefits

The technology improves cashflow by making payments around 5% faster. In the United States, where the economic benefit tops US$116 billion, firms saw an 8% acceleration in payments and US$1.1 million in average annual savings per business.

UK businesses experienced a 4.8% drop in late payments — the best improvement across the six countries. Even in India, which has the highest adoption rate, businesses still saved 6.8 minutes per invoice.

E-invoicing also played a major role in fraud reduction. Of the 1,720 businesses surveyed, 44% reported tax fines and 34% experienced invoice fraud in the past year. Companies using e-invoicing were far less exposed — just 20% reported fines or fraud.

The study found that electronic invoicing could reduce fraud and data breaches by 30%, lower tax fines by 27%, and cut the number of lost invoices by 40%.

Policy support and future outlook

Although e-invoicing is not yet mandatory in Australia, it is gaining traction. More than half of businesses surveyed were aware of government programs promoting adoption, and 58% said they were preparing for likely future legislation.

Australia is considered one of the most proactive markets when it comes to voluntary e-invoicing compliance.

The research underscores the economic urgency for both governments and businesses to accelerate adoption. Avalara said it offers tools to help Australian firms make the switch and unlock the full value of e-invoicing.

Other Recent News

Avalara recently expanded its compliance automation offerings with the launch of new APIs for 1099 and W-9 processes. These APIs enable businesses to embed tax compliance workflows directly into their existing ERP, accounting, ecommerce, or marketplace platforms, streamlining manual, time-consuming processes into a fully automated system. prnewswire.com

Additionally, Avalara has introduced AI-powered tools, including the Avi chat assistant, automated exemption certificate handling, and AI-driven tax research, aimed at improving accuracy and efficiency in tax compliance.

These developments underscore Avalara’s commitment to enhancing digital tax compliance solutions, offering businesses more integrated and efficient tools to manage their tax obligations.