What Is e-invoicing? How It Works in Australia in 2025

E-invoicing is the new standard for businesses in Australia. It’s the faster, safer, and lower-cost way to send (and receive) payment details. Understanding what an electronic invoice is and how to create and send one is useful for pretty much every business in 2025.

This guide breaks down how e-invoicing works, its benefits, and how to get started in Australia. There’s also an introduction to Wise — a service you can use to generate invoices and simplify global payments.

Sign up for the Wise Business account! 🚀

What is e-invoicing?

E-invoicing is the exchange of invoicing information between a buyer and seller in a digital document. It allows businesses to create, send, and receive invoices electronically, rather than through paper trails like in the past.

Electronic invoices carry the same legal and tax significance as paper invoices, provided they include all the required details (e.g., goods bought and sold, price, and tax information) and meet compliance standards.

In Australia, the Australian Taxation Office (ATO) recommends businesses keep electronic invoices for at least five years for tax purposes and compliance¹.

How does e-invoicing work?

The invoicing process is quite simple, as most of the steps from A to B are automated and pass through secure systems.

1. Invoice creation - The seller creates their e-invoice, either manually or through their accounting or payment software of choice. This is an electronic version in a standardised format, which doesn’t need to be downloaded and printed off.
2. Secure transmission - The invoice is sent electronically through a secure network to the buyer.
3. Automatic delivery - There’s no delay with e-invoicing. It goes directly into the buyer’s system instantly, ready for processing and payment. This eliminates the risk of invoices being lost in the mail, like with paper.
4. Validation and storage - Both systems validate the details and store the invoice digitally for compliance.

In Australia, e-invoicing has been built around the Peppol framework². This is a secure global network and set of standards that make it quick, easy, and safe to send invoices to accounting systems.

Benefits of e-invoicing for businesses

Around 1.2bn invoices are sent and received in Australia³ — a huge number that would be incredibly difficult to track and reconcile if handled entirely on paper. E-invoicing solves this logistical nightmare.

It offers a number of clear benefits, including:

• Faster payments - Invoices are delivered instantly and directly to the recipient, which vastly reduces approval and payment cycles.
• Reduced admin - Less manual data entry means there are fewer errors and less time spent checking and correcting invoices.
• More secure - Invoices are sent over secure networks, which makes them less likely to be intercepted and tampered with.
• Cheaper to process - Paper invoices cost around $30 to process, while e-invoicing typically costs less than $10 — a 66%+ reduction³.
• Better compliance - Standardised formats help businesses stay compliant with reporting requirements.
• Easier dispute resolution - Having clear, legal records of business makes it easier to resolve errors.
• Enhanced finance management - Accurate records and prompt payments provide better visibility of money going in and out of business accounts, improving forecasting and budgeting.
• More eco-friendly - Less paper and printing is better for the environment.

Getting started with e-invoicing in Australia

Switching to e-invoicing isn’t difficult in 2025. There are multiple tools and software that let you craft (and even automate) invoice generation to easily track and reconcile invoice management and get paid on time.

For freelancers and startups, getting e-invoicing set up is a bit easier. It may only involve migration from standard .doc files to a new type of software and creating a few invoices from there.

Here are a few steps for getting started.

Step 1. Select an e-invoicing tool or platform

First, you need to decide on your approach to e-invoicing. There are multiple tools and platforms you can use for e-invoicing. These include:

• Manual invoicing - Creating electronic invoices using templates or basic software and then exporting them in a PDF format and sending them via email or other online platforms. This method is easier and more efficient than paper trails, but it still requires manual input as invoice details aren’t automatically scanned.
• Invoicing software - There is dedicated invoicing software (such as Zoho Invoice or FreshBooks) that lets you create structured invoices and transmit them electronically. These invoices usually have tracking features to make payment follow-ups easier.
• Accounting software - Platforms like MYOB support Peppol, which allows e-invoices to be generated and exchanged directly through the network that the Australian government uses and supports⁴. This might be important if you work with government agencies.
• Payment platforms - Services like Wise Business offer invoicing features alongside international payment tools. If you bill overseas clients regularly, this is very handy as you can invoice in their local currency and accept multiple currencies (including AUD), all with low fees.

Step 2. Register for invoicing (if needed)

To send and receive “true” e-invoices in a structured format that will transmit details automatically to a recipient, you’ll need to connect to the Peppol network. In Australia, this is managed by the ATO. Most accounting and invoicing platforms will handle the registration for you. But you will need an Australian Business Number (ABN) as this is used to identify your business in the network⁵.

If you just want to send electronic invoices easily, you don’t have to use the Peppol network. It isn’t a mandatory requirement.

Step 3. Consider compliance and business needs

Regardless of what platform you use, it’s important that all the details in invoices are accurate and compliant.

Here are a few considerations:

• Make sure your invoice meets Australian tax invoice requirements. You’ll need to provide an electronic tax invoice within 1 month for sales over $82.50 if a customer requests one⁶.
• Think about whether you need multi-currency invoicing if you’re conducting business overseas.
• Look at automation options to make invoicing faster, such as batch invoicing, recurring invoices, and payment reminders. These will save you lots of time with admin as you scale and grow as a business.

Step 4. Send invoice

Wondering how to send an electronic invoice? The method will depend on the platform you use. You can either save it as a PDF and send it to a client via email, or send it directly through platforms like Wise Business. For other invoices through Peppol, you will probably need to integrate your accounting software with the network.

Creating an e-invoice (with a sample)

The main objective when creating an e-invoice is to present all the details clearly and correctly in the right format. It’s not about design or branding. The invoice should be both legally compliant and easily readable for the recipient.

These examples show what an e-invoice might look like in practice. As you can see, all the important information is in there, like supplier details, and the description of the goods with quantity and unit price.

Common challenges when invoicing across borders

E-invoicing is standard practice when conducting business within Australia. However, international invoicing brings extra challenges, which businesses working with suppliers or billing clients overseas should be aware of.

These challenges include:

• Currency conversion costs - Receiving payments in currencies other than AUD needs to be converted, often at marked-up exchange rates.
• Payment delays - Cross-border payments can take days to clear when using standard accounts with traditional banks that don’t have multi-currency features.
• Tracking payments - Tracking and reconciling payments across multiple currencies is difficult and time-consuming.
• Compliance differences - Electronic tax invoice requirements vary by country.

For Australian businesses trading internationally, these issues can really start to cut into profits and make the process of collecting payments and recording everything for accounting much more complex than it needs to be.

Simplify cross-border invoicing with Wise Business

Expanding a business globally opens up exciting opportunities, but also new challenges like receiving payments across borders. Hidden foreign transaction fees and hefty currency conversions involved with international payments can eat into your profits and time.

Wise Business serves as a cost-effective solution where you can receive money from around the world at the speed and price of local payments.

Transform the way you receive payments with Wise Business:

• One-time fee of 65 AUD for local account details in 8+ currencies, including AUD, NZD, USD, and more—no recurring fees
• One account to hold, send, and convert money with no hidden fees or exchange rate markups
• Create and send professional invoices directly to your customers through Wise Business
• Create payment links to request money in specific currencies
• Seamlessly receive payments from customers, online sales, or PSPs like Stripe and Amazon.
• Wise is safe and secure - Trusted by 13 million people and counting

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

E-invoicing FAQs

1. Is e-invoicing mandatory in Australia?
No, e-invoicing isn’t mandatory for individuals or private businesses in Australia, but the ATO does strongly encourage businesses to switch to electronic invoices to “save time and money.”³ This is one of the reasons why e-invoicing is now the default method for government agencies.

2. What is Peppol e-invoicing in Australia?
Peppol is the international framework Australia has adopted for e-invoicing. Through this network, e-invoices are sent to recipients by service providers approved by the ATO. You can get started with Peppol by using accounting software that comes with e-invoicing.

3. Is sending a PDF invoice by email considered e-invoicing?
No, sending a PDF invoice isn’t considered e-invoicing by the industry definition, though it can be legally authentic when used with the right systems, such as accounting software or financial platforms. True e-invoices must be created in a structured format like XML and Peppol for automatic processing.

4. What happens if an e-invoice is not generated?
You can still send paper or PDF invoices if an e-invoice is not generated. However, you won’t benefit from things like automation, faster payments, and cost savings of electronic invoices.

5. What is the grace period for e-invoicing?
There is no grace period for e-invoicing in Australia — businesses can adopt it any time and are encouraged to do so for a variety of reasons. However, those working with government agencies may need to switch to e-invoicing for compliance.

Source:

1. ATO - Records you need to keep
2. Business Gov Au - E-Invoicing
3. ATO - Save time and money with e-invoicing
4. MYOB - E-invoicing
5. ATO - Identifying Australian entities on the Peppol network
6. ATO - Tax Invoices