eInvoicing Made Simple with Clear Benefits for Everyone - Link4 eInvoicing

On 5 November 2024, New Zealand’s Economic Development Minister Hon Melissa Lee and Small Business and Manufacturing Minister Hon Andrew Bayly announced a significant update to Rule 51 of the Government Procurement Rules.

By January 2026, more government agencies will be required to be eInvoice-capable and pay 95% of domestic trade eInvoices within five business days. This update is expected to include key agencies like ACC, Waka Kotahi, Health NZ, and NZ Police, marking a major step towards faster and more reliable payments in public procurement.

Starting from 1 January 2025, around 135 government agencies must process 90% of domestic trade invoices within ten business days, with a target of reaching 95% by 2026. This move is part of a broader commitment to reduce payment delays, enhance cash flow for businesses, and encourage the adoption of eInvoicing across the country.

So, what makes eInvocing so appealing? Prominent companies such as Spark, Bunnings, Countdown, Westpac, Office Max, and KPMG have embraced eInvoicing, recognising its impact on both internal efficiencies and supplier relationships. Setting up to send and receive eInvoices is straightforward, with solutions integrating seamlessly into major ERP and accounting systems. Leveraging platforms like the Peppol network, eInvoicing offers a secure, efficient, and globally compatible solution for invoicing that drives measurable benefits.

1. Faster Payments

One of the strongest arguments for eInvoicing is its ability to speed up payments. Traditional invoicing can take days, sometimes weeks, to process as invoices pass through email chains, physical mail, or are even lost in spam folders. With eInvoicing, invoices go directly from a sender’s system into a client’s accounting software, bypassing manual processes.

MBIE’s eInvoicing Executive Sponsor and Chief Operating Officer Michael Alp stated: “Businesses who trade with government organisations can expect eInvoicing to become the norm, and once implemented, these Rules will provide an extra cash flow incentive to send eInvoices to Government. It will also help accelerate wider adoption of eInvoicing.”

“The rule change provides further confidence for businesses to adopt eInvoicing and realise the benefits it is already providing many New Zealand organisations. The more businesses who send and receive eInvoices, the more they’ll benefit from time-savings, no lost invoices, faster payment, and reduced risk of invoice fraud. Our economy will perform better.”

With 97% of all businesses in New Zealand classified as small businesses, timely invoice payments by government agencies are essential.

2. Cost Savings

Switching to eInvoicing can bring substantial savings by cutting out costs linked to paper, postage, and manual processing. Unlike PDFs or printed invoices, eInvoices are entirely digital, meaning there’s no need for paper or manual input. For government agencies and businesses that handle thousands of invoices, these savings add up.

MBIE estimates that widespread adoption of eInvoicing could save New Zealand around $4.4 billion over the next decade. Additionally, reducing reliance on physical documents contributes to environmental goals and operational efficiency, as staff can shift focus from repetitive tasks to higher-value activities.

3. Increased Security

Security is critical, particularly for businesses and agencies that manage sensitive information. Unlike email, where attachments can be intercepted, eInvoices sent through the Peppol network are securely transmitted within a controlled framework. This reduces the risk of fraud, unauthorised access, and human error. Many regions, including Australia and New Zealand, have adopted Peppol standards, ensuring compliance with international eInvoicing regulations. For government agencies, secure transactions are vital for safeguarding taxpayer information and maintaining trust, making eInvoicing an important step toward more resilient operations.

4. Simplified Cross-Border Transactions

Peppol’s standardised format enables easy cross-border transactions, allowing businesses to work with international partners without reformatting invoices for different countries. This capability removes common barriers in global trade, supporting growth and opening new revenue streams. New Zealand businesses, for example, can seamlessly invoice clients in Europe or Asia, enhancing international business relationships and simplifying trade compliance.

5. Reduced Administrative Effort

Handling invoices manually is time-intensive and prone to errors, especially for large organisations or government agencies that process high volumes of transactions. eInvoicing automates the data entry process, meaning invoices are received and integrated directly into ERP systems without the need for manual input. This frees up administrative staff from repetitive tasks, allowing them to focus on more critical responsibilities.

For government agencies, this shift aligns directly with their priority to cut operational waste and improve efficiency in public services. By automating invoice management, they can significantly reduce administrative workload, decrease errors, and redirect valuable resources toward essential services.

The updated Government Procurement Rules represent a progressive shift toward faster payments and operational efficiency for both the government and private sectors in New Zealand. With eInvoicing set to become the norm, businesses and agencies alike are poised to benefit from cost savings, increased cash flow, enhanced security, and streamlined cross-border transactions. Small Business and Manufacturing Minister Andrew Bayly and Economic Development Minister Melissa Lee says, “Government agencies spend approximately $51.5 billion a year on procurement. We can leverage this purchasing power to drive innovation and productivity, and boost our economy.”

Find out how you can benefit from using eInvoicing by booking a discussion with us now: https://link4.co/nz/