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Switching to e-invoicing cuts cyber risks and improves payment times, the small business ombudsman says.
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Ditch ‘error-prone’, insecure invoicing methods, says ASBFEO
20 June 2024
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The Australian Small Business and Family Enterprise Ombudsman says invoicing using emails and PDFs is “error-prone” and insecure, urging businesses to make the switch to electronic invoicing.
Ombudsman Bruce Billson said small businesses were “particularly vulnerable” to invoice substitution scams – also known as payment redirection scams – where cyber criminals intercept emails and modify payment details.
“A small business sends an invoice to somebody and the criminal changes the banking details,” he said.
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“When it lands in the customer's inbox, it looks legit and is a bill they were expecting so they pay it. The money goes to the criminal’s bank account and is quickly shifted, usually to crypto currency, and is gone.”
Billson referred to statistics that showed invoice substitution scams were one of the top five scams affecting businesses, causing $92 million in reported losses in 2023.
“Scamwatch data shows small businesses lost millions of dollars in such scams last year. Using e-invoicing can reduce this risk,” he said.
Making the switch to electronic invoicing would allow businesses to digitally exchange invoices through a secure network, often using existing business software, reducing cyber risks.
The simpler, more efficient system would also cut down on the time spent sending invoices on email manually, he said.
“The process is entirely digital and e-invoices are not PDF invoices that need to be printed, posted or emailed,” he said.
“No one wants to spend all their life sending out invoices. Imagine if that system was connected with your customers and your suppliers. You can send the information off, you validate that it’s the right people with all the critical information to execute the payment.”
“Cash flow is the oxygen of enterprise, and this is a more secure and efficient way of dealing with what is a vital part of getting paid, replacing what can be a tendinous, mundane and error-prone activity.”
The ASBFEO’s call for late adopters to take up the system follows the government’s $23 million federal budget commitment to e-invoicing.
The funding, focused on small businesses and directed to the ATO, was part of a bigger $67.5 million package to help fight digital scams.
“I commend the software providers for embracing eInvoicing in their platforms and for making registration as straight-forward as possible, and the Government for incentivising its use with faster payment times its suppliers,” Billson said.
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