With perhaps the exception of the 1918 Influenza pandemic we have never before experienced a health crisis like COVID-19 in terms of scale, global reach, and impact to business.

Here in New Zealand where 95% of registered businesses are SME a lockdown of over 10 weeks has hit cash flows in various ways. Subsidies may have softened the blow and enabled organisations to keep trading but many have either gone into liquidation or have cut their costs through  staff redundancies.

The resurgence of the virus in Auckland and new lockdown restrictions emanating from New Zealand largest city has increased anxiety and stress with many more businesses tipping over the edge into closure.

‘Cash is king’, an opt-touted phrase originated in 1988, following the ’87 global stock market crash. The term was coined by Pehr G. Gyllenhammar, who was at the time CEO of Swedish car group Volvo.

Many organisations operate with little or no cash reserves and the disruption zero cash for 10 to 12 weeks has caused truly highlights the tight rope many SMEs are walking week to week in New Zealand.

Payment terms and actual payment of invoices has been a huge challenge in many industries, just look at FMCG and some of the big brand supermarkets in the UK and Australia being dragged through the press for not paying their suppliers or lengthy delays in paying suppliers

Tesco knowingly delayed payments to suppliers

By Emma Simpson Business correspondent, BBC News 

Image copyright GETTY IMAGES

Tesco “knowingly delayed paying money to suppliers in order to improve its own financial position”, the supermarket ombudsman has found.

The Grocery Code Adjudicator, Christine Tacon, said the supermarket seriously breached the industry’s code of conduct to protect grocery suppliers.

She found extensive evidence that Tesco had acted unreasonably when delaying payments to suppliers.

Coles to pay milk supplier $5.25m after allegedly failing to pass on full price increase

 This article is more than 6 months oldACCC says it was ‘fully prepared’ to take Coles to court over the allegations

Ben Butler

Thu 5 Dec 2019 00.20 GMTLast modified on Thu 5 Dec 2019 00.22 GMT

Coles will pay one of its milk suppliers $5.25m after an investigation by the Australian Competition and Consumer Commission. Photograph: Bloomberg/Getty Images

Supermarket giant Coles has agreed to pay an extra $5.25m to one of its milk suppliers to settle a stoush with the consumer watchdog over whether it was passing all of a 10c a litre price increase on to dairy farmers.

Post COVID19  cash flow for many organisations is the difference between life and death. Prompt payment is the most important variable for SMEs who has seen revenues drop by up to 80%. With bills and staff to pay cutting the overheads to support a sustainable future becomes the number one priority. Everywhere you are seeing slogans to buy local, help stimulate the economy, support small businesses.

New Zealand Government has looked at bringing in legislation for prompt payment for suppliers as they understand this is key for many businesses in its survival even before COVID19

Government considering legislation to make sure small businesses are paid on time

7:31 am on 26 February 2020 The government’s looking at law changes to ensure small businesses are paid on time.

Small Business Minister Stuart Nash said he is willing to legislate, if necessary, to ensure payments within 20 days, with interest imposed for late payments.

He said prompt payment and cash flow are vital to small business survival, and having to wait as long as 90 days to get paid by big businesses is unacceptable

Construction Subcontractors Wednesday, 27 May 2020, 6:12 pm

Press Release: New Zealand Government

Subcontractors will have greater certainty, more cashflow support and job security with new changes to retention payments under the Construction Contracts Act says Minister for Building and Construction, Jenny Salesa.

The changes include:

  • introducing a new offence and penalties for company directors and firms who don’t comply with their responsibilities, 
  • strengthening how retention money is held to prevent firms from dipping in to retention money to use as working capital, 
  • requiring those holding retention money to issue a transparency statement stating how much is being held and where

The New Zealand Government has implemented Construction Contracts Act in the construction sector after many large organisations have gone into liquidation and left multiple sub-contractors high and dry without any payment for work carried out.


PEPPOL stands for Pan-European Public Procurement Online. The network was established as a test project by the European Commission in in 2008. Organisations that are now connected to PEPPOL can exchange business documents, such as various electronic formats, through the highly secured and safe international network

PEPPOL is an international e-invoicing network that allows you to safely send e-invoices to companies and governments worldwide.

The NZBN government website published the diagram below that gives you a great overview of PEPPOL. The Australian and New Zealand governments have adopted the standard as they see this an enabler for prompt payments especially in the SME sectors of both countries.

Organizations that are now connected to PEPPOL can exchange business documents in various electronic formats, through the highly secured and safe international network. It’s a secure network connection that uses a message exchange to deliver documents including e-invoices from system to system. This makes the transaction robust and error free.

It is very similar to the initial days of email when ISPs were set up as message exchanges to convert the different standards connecting system to system via a standardised language. I here you say but we have this currently it’s called EDI. Traditionally Electronic data interchange EDI has developed many standards such as;

Some major sets of EDI standards:

  • The UN-recommended UN/EDIFACT is the only international standard and is predominant outside of North America.
  • The US standard ANSI ASC X12 (X12) is predominant in North America.
  • GS1 EDI set of standards developed the GS1 predominant in global supply chain
  • The TRADACOMS standard developed by the ANA (Article Number Association now known as GS1 UK) is predominant in the UK retail industry.
  • The ODETTE standard used within the European automotive industry
  • The VDA standard used within the European automotive industry mainly in Germany
  • HL7, a semantic interoperability standard used for healthcare data.
  • HIPAA, The Health Insurance Portability and Accountability ACT (HIPAA), requires millions of healthcare entities who electronically transmit data to use EDI in a standard HIPAA format.
  • IATA Cargo-IMP, IATA Cargo-IMP stands for International Air Transport Association Cargo Interchange Message Procedures. It’s an EDI standard based on EDIFACT created to automate and standardize data exchange between airlines and other parties.
  • NCPDP Script, SCRIPT is a standard developed and maintained by the National Council for Prescription Drug Programs (NCPDP). The standard defines documents for electronic transmission of medical prescriptions in the United States.
  • Edig@s (EDIGAS) is a standard dealing with commerce, transport (via pipeline or container) and storage of gas

EDI can be transmitted using any methodology agreed to by the sender and recipient, but as more trading partners began using the Internet for transmission, standardized protocols have emerged.

This includes a variety of technologies, including:

Modem (asynchronous and synchronous)







OFTP (and OFTP2)

Mobile EDI

The challenge for suppliers and customers is all of the above! Which standard do I use?

How do I connect to the customer or suppliers system if I don’t have the standard that they have?

PEPPOL will become a global standard for the exchange of documents with the initial standards focused heavily on e-invoicing.


Tradeshift− a PEPPOL access point provider claim there are immediate cost savings when using the PEPPOL e-invoicing capability “The benefits from this kind of shift include process cost reductions of up to 75%, up to 40% reduction in support calls and up to 18% more invoices paid on time.”

Along with this is increased process efficiency, compliance and robustness with a reduction of errors. Once you are connected you an promulgate this out to all your suppliers/customers in an efficient and effective end to end solution.

Standards and standardisation is not new however when you have the backing of 2 Trans-Tasman governments with the New Zealand government publicly stating the need for prompt payments to support the economy even pre-COVID-19, adoption will be the key to rapid deployment and reduction in payment times.

Companies such as Xero have already deployed PEPPOL in their solution stack for e-invoicing.


PEPPOL uptake and the backing by both governments in ANZ should see the adoption rates of this standard increase exponentially over time. Getting back to the title and question it asks, many sectors in New Zealand have been hampered by long to no payment cycles from customers. PEPPOL  will enable faster & more accurate payment and could stimulate post COVI19 recovery for businesses by increasing cash flow and reducing debt days.

However it is not the silver bullet and will require us all as purchasers to think about how we spend our hard earned dollar supporting our local businesses enabling them to climb out of what potentially could be a deep recession. If intent is good and organisations contract to have more prompt payment of invoices the cash circulating through our businesses will flatten the effect of COVID19.

Payment delays may still occur though if organisations do not have processes in place to approve invoices promptly. Receipting is always an issue. One common occurrence is the lack of escalation processes when delegated authorities are away on holiday, off sick or just too busy.

Accounts Payable teams insist on robust processes and easy access to systems that enable prompt approvals and electronic 3 way matching.

This is by no means was an exhaustive look at the emerging PEPPOL standard and I hope you enjoyed the little insight and slant of this blog. As always comments and feedback are greatly appreciated


From <https://www.bbc.com/news/business-35408064>

From <https://www.theguardian.com/business/2019/dec/05/coles-to-pay-milk-supplier-525m-after-allegedly-failing-to-pass-on-full-price-increase>

From <https://www.rnz.co.nz/news/business/410369/government-considering-legislation-to-make-sure-small-businesses-are-paid-on-time>

From <https://www.storecove.com/blog/en/what-is-peppol/>


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