eInvoicing in New Zealand: how suppliers get paid by government agencies in five business days

You finish a job for a government department. You email a tidy PDF invoice. Then you wait. Ten business days is two working weeks, and that is the target, not a promise.

There is a quicker lane. Since January 2026, New Zealand government agencies have had to pay 95% of domestic eInvoices within five business days. Same work, same customer, half the target wait — if the invoice travels the right way. Here is how that lane works, how to get into it from Xero or MYOB, and where cash flow still needs a plan.

What changed for government suppliers in 2026?

Two things arrived together under the Government Procurement Rules.

Prompt payment. Rule 36 says agencies must pay 95% of domestic trade eInvoices within 5 business days, and other domestic trade invoices within 10 business days. When the fifth edition of the Rules was published in October 2025 the target was 90%. It rose to 95% from 1 January 2026.

eInvoicing capability. Government agencies were required to be able to send and receive eInvoices by January 2026. By the time the rules took effect, more than 60 agencies were set up, with over 100 agencies covered by the prompt payment rules. Agencies also report their payment times to MBIE every quarter, so the targets are watched.

Next on the calendar. From 1 January 2027, large suppliers — entities, including subsidiaries, with total annual revenue over $33 million — must send eInvoices to government. Most small businesses are nowhere near that line. For them, eInvoicing stays optional. The faster payment target is the reason to switch anyway.

What is an eInvoice, on screen?

An eInvoice is not a PDF. It is structured invoice data that moves straight from your accounting software into your customer’s accounting software, over a secure network called Peppol.

Here is what that looks like in practice:

1. You raise the invoice in Xero or MYOB as normal.
2. Your software sees the customer is registered for eInvoicing and sends it as an eInvoice.
3. It lands directly in the agency’s accounts payable system. Nobody retypes it. Nobody hunts for it in a shared inbox.
4. The agency approves and pays.

Your customer’s NZBN works like the delivery address. Your NZBN is your return address. No email attachment is involved.

That last point matters for safety, too. Fake invoices and altered bank details usually travel by email. An eInvoice skips the inbox, which removes one of the easiest routes for tampering. It does not replace basic checks — see our guide to payment redirection fraud — but it narrows the gap.

How do you switch on eInvoicing in Xero or MYOB?

Allow about ten minutes. The government eInvoicing site says that for most businesses it is “easy and cost free”, and Xero and MYOB users can send and receive eInvoices free of charge.

Before you start, have ready:

• your NZBN (find it on the NZBN register if you are not sure);
• your legal business name and address, exactly as registered;
• the name of the person who will be the business contact.

In Xero:

1. Go to Settings, then Organisation Details, and check your NZBN is entered.
2. Open the Bills to Pay area.
3. Choose the option to set up eInvoicing.
4. Confirm your NZBN and details, add a business representative.
5. Agree to the terms and finish.

In MYOB:

1. Go to Settings, then Sales Settings, then the invoicing or eInvoicing tab.
2. Click to get started.
3. Enter your business details and agree to the terms.
4. Register for eInvoicing.

Menu names shift as software updates, so if a label looks different, search your software’s help centre for “eInvoicing”. More than 60 accounting products in New Zealand are eInvoicing-capable if you use something else.

Then check your customers. Search them on the NZBN website, look them up on the registered-business list on einvoicing.govt.nz, or ask their accounts team. Make sure the customer contact in your software carries their correct NZBN. A wrong NZBN is the eInvoicing version of a wrong email address.

Already using Xero or MYOB well? The same tidy file helps when you apply for finance. Our guide to linking Xero or MYOB to a loan application explains what a lender sees.

When does the five-day clock actually start?

This is the detail most suppliers miss.

Rule 36 measures payment time from when an invoice is entered into the agency’s accounts payable system. That can differ from the date printed on your invoice. An eInvoice tends to be entered almost immediately, because it arrives as data. A PDF waits for someone to open it, key it in or scan it.

The target also does not apply when:

• the goods or services are unsatisfactory or incomplete;
• the invoiced amount is in dispute;
• the invoice is incomplete or incorrectly rendered.

So the five-day lane only works if the invoice is right first time. In practice:

• Quote the purchase order number exactly as the agency issued it.
• Match the agency’s legal name and NZBN, not a division nickname.
• Invoice for what was delivered, not what was planned. Part deliveries get part invoices.
• Include GST correctly at 15% and show your GST number.
• Send it when the work is signed off, not before.

Need cash sooner than any invoice can deliver? See if your business qualifies — the enquiry takes about a minute.

What about subcontractors?

Rule 36 also says agencies must require their suppliers to pay subcontractors on government contracts on terms no less favourable than the ones they receive.

If you are a head contractor getting paid in five business days, expect your contract to push similar terms down the chain. If you are the subcontractor, that is good news. Either way, check the payment clause in your contract rather than assuming.

Does faster payment fix cash flow?

It shortens one gap. It does not close all of them.

Think of a government job as three stages on a progress bar:

Stage	What happens	Who is funding it
1. Win and start	You buy materials, book staff, pay wages	You
2. Deliver and invoice	Work is signed off and the invoice is issued	You
3. Wait for payment	The agency processes and pays	You — now for a shorter time

eInvoicing speeds up stage three. Stages one and two can run for weeks, sometimes months on a larger contract, with wages and PAYE due on the usual dates. That is where a lot of growing suppliers come unstuck: the customer is excellent, the margin is fine, and the bank balance still dips.

The online tools that fit each stage are different:

• Before you can invoice: a business line of credit gives you a limit to draw on for materials and wages, and you repay as payments land.
• After you invoice, if the customer is slower: online invoice finance advances against unpaid invoices. With a fast-paying government customer you may not need it — but private customers on 20th-of-the-month terms are a different story.
• For a bigger step up: a working capital or unsecured loan can fund new equipment or staff to take on a contract you would otherwise have to turn down.

A worked example

Worked example (illustrative only): a commercial cleaning business in Hamilton picks up a contract for a government department’s regional offices. It invoices monthly in arrears.

Under the old habit — PDF by email — an invoice issued on the last day of the month is entered when someone in accounts payable gets to it, then paid within ten business days of that. Realistically, the owner sees the money in the third week of the next month. Wages for the extra staff went out weekly the whole time.

After registering for eInvoicing in Xero and adding the department’s NZBN to the contact, the same invoice lands in the agency’s system the day it is sent. The five-day target now applies. Payment arrives roughly two weeks earlier each month.

That fixes the wait. It does not fix the first month, when the owner paid four weeks of new wages before invoicing at all. For that, the owner sets up a modest line of credit: draw for the first month’s wages, repay when the first government payment lands, and keep the limit open for the next contract.

Does eInvoicing make a loan application easier?

It helps in quiet ways.

• Steadier bank data. Predictable payment dates make your cash flow easier to read when you share bank statements or connect through open banking.
• Cleaner receivables. An aged receivables report with few overdue government invoices tells a lender your customers pay.
• Clear invoice trails. Invoice finance providers want proof an invoice was issued and received. An eInvoice provides a cleaner record than a forwarded PDF.

If you want to see how your setup looks overall, the online-ready score takes a couple of minutes, and our one-hour preparation plan covers the rest.

Your eInvoicing checklist

• NZBN details correct and current
• eInvoicing registered in Xero, MYOB or your software
• Every government customer’s NZBN saved on their contact
• Purchase order numbers captured on every invoice
• Invoices issued as soon as work is signed off
• A plan for the weeks before you can invoice

Faster invoices, and cash for the gap before them

Getting onto eInvoicing is one of the cheapest cash flow wins available to a New Zealand supplier right now. It costs most Xero and MYOB users nothing and can cut the target wait in half. What it cannot do is pay for the materials, wages and fuel that come before the invoice exists. That gap is exactly what we help suppliers plan for.

Our online enquiry takes about 60 seconds, and there is no credit check when you first enquire. Your details stay with our one team — we do not fire them off to a pile of lenders, so your phone will not start ringing with strangers. A real person reads what you send, looks at your contracts and cash flow as they actually are, and calls you to talk through options such as a line of credit or invoice finance. Please fill in the form accurately — your real turnover, the amount you need and any IRD arrangement — so we can match the right option the first time.

See if you qualify →