26 February 2024
Last week, Hon Andrew Bayly, the Minister for Small Business and Manufacturing, New Zealand, announced the government’s intent to revoke the Business Payments Practices Act 2023. Instead, they plan on pursuing non-regulatory measures for improving payment times to small businesses. The primary objective, however, is to ramp up the use of e-invoicing in New Zealand, involving more government agencies to send, receive, and pay the invoices faster.
Explicitly, the plan aims to set government departments for faster payment targets for e-invoices; with future plans, subject to consultation, it could also be extended to a few Crown entities.
The state of electronic invoicing in New Zealand
As of now, the 32 central government agencies in New Zealand must pay 95% of invoices within 10 days while being able to receive e-invoices from their suppliers. Hon Andrew Bayly proposed to extend these requirements to the Crown entities as well–meaning, 100+ government organisations will have to send and receive e-invoices. The proposals, as made, signal towards e-invoicing in New Zealand becoming a default method of exchange between the Central and Crown entities.
How will organisations be affected?
Electronic invoicing, as a matter of fact, already helps businesses receive their payments faster. It will continue to deliver its comprehensive benefits to businesses of all sizes. That being said, these proposals also provide an extra cash flow incentive to businesses for sending e-invoices to the government. Furthermore, it provides confidence to businesses to adapt to e-invoicing in New Zealand norms. The more the business adapts to this, the better benefits they will gain. The benefits range from time savings to no loss in invoices, faster payments, reduced risks of invoicing fraud, and much more.
What are the next steps?
Upcoming in the line, the Ministry of Business Innovation and Employment (MBIE), will consult with the government agencies for the new e-invoicing requirements, along with potential timelines for its implementation.
Stay tuned for more information on e-invoicing in New Zealand and other countries.
