New government procurement rules designed to improve business cash flow came into force this month. Good news for SMEs, requiring agencies to pay suppliers more quickly and adopt eInvoicing as standard.
Under the new rules, mandated government agencies must send and receive eInvoices and pay 95 percent of them within five business days, while all other domestic trade invoices must be paid within 10 business days.
The changes are intended to strengthen financial efficiency across the public sector while easing cash flow pressure for businesses, particularly small and medium enterprises.
“eInvoicing and prompt payment go hand in hand to deliver benefits for businesses,” says Michael Alp, General Manager New Zealand Government Procurement and co-Chair of the Australian New Zealand eInvoicing Board.
“That’s what these new rules are designed to do, improve cash flow to businesses – especially small businesses – as well as setting a high standard for financial efficiency and transparency across the public sector.”
eInvoicing is the direct digital exchange of invoice data between buyers’ and suppliers’ systems via the secure global Peppol network. It eliminates paper and emailed PDF invoices, reduces manual data entry and improves accuracy, security and processing speed.
New Zealand adopted the Peppol framework in 2019, managed by MBIE, and is now actively encouraging widespread adoption. According to MBIE estimates, eInvoicing is expected to deliver $4.4 billion in productivity savings over the next decade.
Adoption of eInvoicing is accelerating across both government and the private sector.
“eInvoicing is growing rapidly with more than 52,000 businesses already registered, up by more than 400% over the last 24 months, and more than 650,000 eInvoices exchanged to date,” says Alan Carnaby, Director Smart Data Economy at MBIE.
More than 100 government agencies are now required to make prompt payments, and over 60 agencies are already equipped to send or receive eInvoices, with more expected to follow.
Under the new rules, agencies must also report quarterly to MBIE on their payment times, with results published online.
“Publishing agency performance data reinforces accountability and provides a clear signal about expected payment behaviour.”
Momentum is also being driven by major organisations sending and receiving high volumes of eInvoices in New Zealand. These include Xero, Bunnings, OfficeMax, Datacom, NXP, FarmSource (Fonterra) and Robert Walters, with energy and telecommunications providers expected to join in early 2026.
According to Carnaby, this will deliver immediate operational benefits for SMEs.
“The telcos and energy sector ramping up their focus on eInvoicing with billing over the next 6 months will be great for Small and Medium Enterprises. With these businesses receiving telco eInvoices it will help reduce their administration time with no need for manually entering invoice details into their accounting systems.”
Businesses supplying large corporates are also expected to benefit from faster and more reliable payments.
“Likewise, New Zealand businesses that send eInvoices to large corporates such as Westpac, and Woolworths, among the top receivers of eInvoices from New Zealand suppliers, will benefit from no lost invoices and less chasing payment.”
Carnaby says eInvoicing is a key part of a broader digital transformation agenda.
“Ultimately, eInvoicing is pivotal to a better future for small businesses in New Zealand as part of a range of Government digitisation initiatives such as NZ Business Number, Digital Identity, Credentials, and the new prompt payments rules.”
“The more businesses and organisations that use it, the more everyone will benefit, particularly our small businesses.”
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