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Doing Business Online with Government

2. How to trade electronically with the Commonwealth Government

2.1 Finding out about business opportunities

Accessing information about business opportunities

Commonwealth procurement policy ^₇, as expressed through the Commonwealth Procurement Guidelines, does not require Commonwealth buyers to use a particular procurement method (for example, a public tender process) in all circumstances. Instead, it gives Commonwealth buyers the flexibility to select the most appropriate method for a particular procurement, taking into account the requirements and existing market conditions of the procurement. Where a buyer decides to procure goods or services through a public tendering process, the Commonwealth Procurement Guidelines require that the business opportunity be advertised in an adequate and timely fashion in the Purchasing and Disposals Gazette at www.ads.gov.au. The business opportunity may also be advertised in newspapers and other media.

It is intended that the Commonwealth Electronic Tender System will absorb the functions of the Commonwealth business opportunities site www.ads.gov.au and that a tender notification facility be established to alert suppliers of tenders in nominated areas of interest. For further details on tendering electronically with Government, see section 2.2.

To access information about public Commonwealth business opportunities, go to the Government Advertising site at www.ads.gov.au, click on 'business opportunities', and browse or search for opportunities of interest.

Some typical screen shots from the site demonstrating how to navigate through the pages appear below.

  

Links to other State and Territory government tender sites

If you are interested in Commonwealth Government business opportunities, you may also be interested in other government tenders. Public tenders released by State and Territory governments are available on their websites at:

• Australian Capital Territory www.basis.act.gov.au
• New South Wales https://tenders.nsw.gov.au/dpws
• Northern Territory http://notes.nt.gov.au/Tender.nsf
• Queensland www.qgm.qld.gov.au/bus_opps_cur_tenders.html
• South Australia www.tenders.sa.gov.au
• Tasmania http://db.purchasing.tas.gov.au/tenders
• Victoria www.tenders.vic.gov.au/public/default.asp
• Western Australia http://agate.gem.wa.gov.au/prod/wa/bb/home.do

Tender Discoverability

NOIE is the lead agency for a pilot project to make tender information issued by the Commonwealth, State and/or Territory governments, available through multiple discovery points. NOIE will work collaboratively with participating jurisdictions for the duration of the pilot, which is planned for the second half of 2002. More information is available on the NOIE website.

Finding out what Commonwealth agencies are buying

One of the objectives of Commonwealth procurement policy is to ensure transparency and accountability in Commonwealth purchasing. To promote this objective, agencies are required by the Commonwealth Procurement Guidelines to report purchases (including contracts, standing offers and agreements between agencies) with an estimated liability of $2,000 or more, including GST where applicable, in the Purchasing and Disposals Gazette within six weeks of entering into the agreement. This information is publicly available through the Gazette Publishing System (GaPS) at www.contracts.gov.au.

Work is currently underway to enhance GaPS in order to achieve a more functional and easy to use system that meets the increased accountability, purchasing and information needs of Parliament, Government and industry.

If you are interested in finding out what goods and services particular agencies are buying, and which agencies may be potential customers, go to the GaPS site. You can search the GaPS database, according to your area of interest, and download data to analyse. Further instructions on searches and importing data into a spreadsheet or database application are available in the Gazettal Reporting Requirements Handbook.

The screen shots on the below, show the results of a search of the GaPS database.

Case study: A supplier in the IT industry interested in selling to Commonwealth Government agencies searched the GaPS database for contracts for the kind of services provided by the supplier. This information has allowed the supplier to identify which agencies to approach to advise its interest in upcoming tenders.

  

The Solutions Exchange (SOLX)

The Government Online Solutions Exchange (SOLX) is an online listing of commercial products and services able to help Commonwealth Government agencies meet their electronic service delivery and other online needs. SOLX complements the Commonwealth's Endorsed Supplier Arrangements (see Appendix 1) and aims to better link agencies and businesses providing online solutions.

If you are a supplier of online goods and services you should consider registering with SOLX. More information about SOLX is available.

Below are screen shots from the SOLX site, showing the front page and the online application form.

 

2.2 Tendering electronically

Commonwealth Electronic Tender System

The Commonwealth Electronic Tender System (CETS) at www.tenders.gov.au enables suppliers to access selected Commonwealth Government bidding opportunities, download associated documentation, and submit electronic tenders in response.

Using CETS saves agencies costs in distributing tender documentation to interested suppliers. One of the most important savings for suppliers is in time. Where you may have had to wait days for a tender package to arrive in the mail previously, it can now be downloaded almost immediately. Also, if you are interstate, you do not need to send a tender by mail or courier overnight, you can now send it electronically closer to the closing time.

A successful pilot of CETS has been completed and NOIE has committed to the redevelopment of CETS software to provide enhanced functionality, capacity and robustness. This will bring the system up to full production standard in preparation for implementation across Commonwealth agencies from the second quarter of 2003, with more tenders appearing progressively on the site.

To download tender documentation or to submit a tender electronically, go to the CETS site at www.tenders.gov.au. You will need to register as a user. As a user you must nominate a username and password. Registering as a user means you will not be required to fill out your details every time you download documentation or submit a tender.

When a tender is lodged with CETS it is encrypted using public key technology. Only the agency officer responsible for electronic tenders and the CETS system administrator can decrypt the tender.

CETS can also be used for restricted tender processes. If an agency invites you to bid in a restricted tender process, you will be provided with a special tender code and password to enable you to access the restricted tender documentation on the CETS site. You will then be able to submit an electronic tender response in the normal way.

The diagram below illustrates how CETS works:

• An agency advertises a business opportunity, such as a Request for Tender, on the Commonwealth Government Advertising site at www.ads.gov.au or in a newspaper. (Note - it is intended that the redeveloped version of CETS will absorb the advertising function from www.ads.gov.au.)
• The agency then uploads the associated tender documentation to the CETS site.
• Having identified an opportunity of interest on www.ads.gov.au or in a newspaper, a supplier can then log in to the CETS site at www.tenders.gov.au, register their contact details and download the relevant tender documentation.
• A supplier wishing to respond prepares the tender offline and then uploads it electronically into the 'Electronic Tender Box' on CETS.
• The tender transmission to the CETS site is encrypted; the tender itself is then encrypted when it is put into the tender box.
• When the tender has closed, the agency 'opens' the 'Electronic Tender Box', downloads any tenders, and decrypts them.

Contract negotiations

Once you have submitted a tender electronically, you may negotiate the contract using electronic communications such as email. You should be mindful of the need to protect the confidentiality of sensitive information you send electronically. You can do this by using secure email (see section 3 for more information about security issues). Some of the legal issues involved in forming contracts electronically are also discussed in section 3.

2.3 Selling through an online catalogue

An online catalogue can be viewed as an electronic version of a business's paper catalogue, but technology allows additional functionality. A basic online catalogue may only present 'static' information about the goods and services provided by the supplier. A more sophisticated catalogue may present different 'views' to buyers, depending on their profile, access rights, and the terms and conditions agreed between buyer and seller. It may also allow buyers to place orders electronically.

An online catalogue may contain:

• product descriptions and available quantities
• prices for different buyers and per order
• parts or article numbers associated with the products
• images and video links
• ordering facilities.

The screen shots below are from the Online Government Bookshop catalogue (at www.bookshop.gov.au/), including one showing an online order form.

 

Catalogue models

There are three main catalogue models, the:

• supplier-hosted catalogue model (where the supplier maintains a stand-alone catalogue)
• buyer-hosted catalogue model (where the buyer hosts within its own systems, catalogue data provided by the supplier)
• third-party-hosted catalogue model (where a service provider such as an e-marketplace hosts the catalogue).

Each of these models has advantages and disadvantages from the perspective of buyers and suppliers. The buyer-hosted model, for instance, may remove the need for a supplier to establish an online catalogue. It may be cost-effective for the supplier to provide catalogue data to the buyer electronically and the buyer to upload the data into its internal systems. But a supplier with many customers may find it onerous to provide each customer with updated pricing information and to ensure that the customers are using current pricing information.

For these reasons, it is generally considered best practice for a supplier to maintain a single online catalogue, which the buyer browses, and transacts with, electronically. The catalogue can be hosted by the supplier or by an e-marketplace, depending on the supplier's capabilities. The supplier then needs to ensure that this catalogue only is up-to-date. While this is considered best practice, it may be appropriate for the buyer and supplier to agree to other arrangements, particularly if the supplier is in the early stages of implementing e-commerce.

Do you need an online catalogue?

You will need to decide whether you need an online catalogue. This will depend on the kind of goods and services you sell, whether your existing customers are online, and whether you wish to target new online customers. Suppliers with online catalogues are accessible not only to existing customers, but also other buyers. While e-commerce still accounts for a relatively small proportion of business, it is growing, and suppliers who choose not to implement an online catalogue may risk missing out on business opportunities from buyers who have decided to move their purchasing online.

The cost of developing an online catalogue will vary, depending on your requirements. The costs can be minimal, if all you wish to do is publish the catalogue electronically, to substantial, if you wish customers to be able to transact business with you through the catalogue.

Options for developing online catalogues

There are a number of options available to suppliers seeking to establish an online catalogue presence, depending on the functionality you want to include in your catalogue.

Option	Advantages
Publishing basic catalogue data about products and services possibly already in the form of a table or spreadsheet	This option is a relatively easy way for suppliers to produce a basic online catalogue of their goods and services. This can be published on their website, or uploaded to a buyer's system or an e-marketplace.
Implementing and hosting an online catalogue	Suppliers that choose this option can decide how buyers use their catalogue and as a result, have more control over how they do business online. Suppliers would generally use off-the-shelf software to develop their catalogues, but can also design and build their own catalogues.
Using a third party content manager to build and host an online catalogue	This option involves the supplier handing over responsibility for the development and maintenance of their online catalogue to a content manager such as an e-marketplace provider. Suppliers can expect to have their goods and services promoted to existing and new buyers and have access to help desk facilities, monitoring services and market information.

Case study: In early 2001, the Department of Agriculture Fisheries and Forestry Australia (AFFA) began implementing the Qvalent procurement system. As part of the proof-of-concept implementation phase, designed to test its business requirements, AFFA included an SME supplier with no previous online trading experience.

As part of the overall solution, Qvalent provide a low cost mechanism to facilitate trading between suppliers and AFFA, without the need for a pre-existing online catalogue or integration of accounting systems. Qvalent provide access to their hosting environment, accessible via a website, where suppliers can create their own catalogue and electronic shop front online. The registration and catalogue process is guided by a wizard, and is both simple to use and feature rich. Qvalent can assist with the development of the supplier's catalogue and integration needs if required.

All suppliers are asked to sign a deed of standing arrangement specifically developed for the online trading environment, which defines both AFFA's and the supplier's responsibilities in relation to e-procurement. This document also specifies the terms of the agreement, price list, or pricing mechanism, and key performance indicators.

The e-procurement system allows AFFA to fill an online shopping cart, 'check out' via an electronic authorised purchase order, which is transmitted to the supplier, and receive an electronic invoice from the supplier. The invoice is then automatically reconciled and uploaded into AFFA's QSP financial system for payment.

 

The importance of open standards and interoperability

To trade electronically with Commonwealth agencies, a supplier's online catalogue should comply with the Government's open standards framework. Standards set down a consistent way of doing something. It is not necessary for non-specialists to know a lot of technical detail about e-commerce standards, but it is essential to understand why they are important. Standards allow trading partners to do business in a reliable and consistent way. Standards are especially relevant to catalogues because they contain large amounts of data, which must be structured to allow easy access by users. Standards are required to identify and classify products in the catalogue and to manage the electronic exchange of this data securely.

Standards help to promote interoperability, or the ability of different systems to 'talk' to each other. One useful definition is - the transfer and use of information across multiple organisations and IT systems.

Interoperability is vital to promoting wider use of e-commerce because it makes it easier and less costly for suppliers and customers to do business electronically. Where your trading partners use different standards, you may need to trade using all of them or risk losing business, and this imposes extra costs.

Governments and industry have recognised the importance of interoperability. Australian Federal, State and Territory governments are promoting a consistent approach to e-procurement through the APCC. The APCC Government Framework for National Cooperation on Electronic Procurement ⁸ recommends the use of open standards to facilitate Internet trading ⁹,these standards are outlined in the text box on the following page.

Other new standards which the APCC is monitoring include electronic business Extensible Markup Language (ebXML, at www.ebxml.org) and the Universal Description, Discovery and Integration (UDDI) initiative (at www.uddi.org). The Universal Business Language (UBL) initiative, which will develop a standard library of XML business documents (purchase orders, invoices, etc.), is another significant standards initiative (at www.uddi.org). The Universal Business Language (UBL) initiative, which will develop a standard library of XML business documents (purchase orders, invoices, etc.), is another significant standards initiative (at http://oasis-open.org/committees/ubl/).

When implementing e-procurement initiatives, the APCC recommends that trading partners should promote equitable access for all sectors of the community.

If you are considering establishing an online catalogue, whether you develop it yourself, buy it off-the-shelf, employ a catalogue developer, use the services of an e-marketplace or participate in an e-marketplace, you should make sure that your catalogue is able to support open standards. It is also important to recognise that standards are evolving and to ensure that enough flexibility is built into your systems to accommodate changing standards. 

Standard	Description
Extensible Markup Language (XML)	For creating standard data formats (see www.xml.org/).
Australian Business Number (ABN)	Issued by the Australian Taxation Office and used as a unique Australian business identifier (see www.abr.business.gov.au/).
Open Buying on the Internet (OBI)	Protocol for electronic trading (see www.openbuy.org/).
Data Universal Numbering System (DUNS)	Dun and Bradstreet's unique international business identifier (see www.dnb.com/duns_update/).
Universal Standard Products and Services Code (UNSPSC)	An international classification system for goods and services. (Copyright in this code is currently (June 2002) the subject of legal determination in the USA. The APCC is keeping this issue under review. As at June 2002, the APCC supports Version 5.01 of the code).
EAN/UCC barcode number	For article identification (see www.ean.com.au/).

2.4 Selling through an e-marketplace

 

An e-marketplace is an online facility, which allows buyers and suppliers to carry out transactions. E-marketplaces typically contain online catalogues from a number of suppliers, as well as ordering facilities, while some also provide the capability to seek quotes from suppliers in the marketplace. There are several benefits to a supplier in being a member of an e-marketplace. You are provided with assistance in developing an online catalogue for your goods and services, which is then hosted by the e-marketplace. E-marketplaces therefore provide suppliers with a ready-made e-commerce capability. You also benefit from the numbers of buyers that are attracted to the marketplace. E-marketplaces can therefore be a good way of accessing new customers.

Types of e-marketplaces

Most marketplaces are either vertical or horizontal. Vertical marketplaces focus on one particular industry, such as steel, electricity or chemicals, and are usually sponsored by one or several leading companies in that area. Horizontal marketplaces cut across industry boundaries and focus on broad categories of goods.

These are sometimes called 'indirect' because they do not enter directly into the production process. These categories, which include office supplies, furniture and travel services, are purchased by large numbers of businesses across different industries.

Three primary ownership models have emerged among e-marketplaces:

• third party
• private/proprietary
• consortium-led.

Third party exchanges are owned and operated by a third party that is not considered to be a trading partner. Private/proprietary exchanges are owned and operated by a single large firm, typically a supplier, which sells its products through the marketplace. The ownership of consortium-led exchanges is typically shared between industry leaders, possibly including a technology partner to develop the marketplace.

Interoperability and e-marketplaces

One of the key issues for buyers and suppliers is interoperability of e-marketplaces. In practical terms, this refers to the ability of a buyer in one marketplace to purchase from a seller in a second marketplace. Ideally, a buyer and supplier should not have to join the same marketplace to trade with each other (if they are not already members). There should be connectivity between marketplaces so that a buyer in one marketplace can access, and transact with, a seller in another.

But while it is generally agreed that interoperable, open marketplaces would benefit buyers and suppliers and accelerate uptake of e-commerce, achieving interoperability is a challenge still facing marketplace providers and participants. Australian governments, through the APCC Government Framework for National Cooperation on Electronic Procurement, have expressed support for interoperability between marketplaces.

Interoperability will need to be based on open standards underpinning the e-trading systems of buyers, sellers and the marketplace. Open standards will also help to ensure that all participants in a marketplace are subject to the same requirements and that no business is favoured over another. This means that, where participants hold equity in a marketplace, they are not able to take advantage of their market power to prevent the entry of a competitor.

The diagram below shows what an open trading environment would look like - buyers and sellers trading with each other through a variety of arrangements, some transacting directly with each other, others trading through an e-marketplace.

Issues to consider before joining an e-marketplace

The Australian Competition and Consumer Commission (ACCC) has raised some possible issues smaller businesses should consider before joining an e-marketplace. These issues are outlined on the following page ¹⁰.

You should also be aware that some State and Territory governments have established or intend to establish e-marketplaces. If you are a supplier to a government that is doing so, you should consider joining its marketplace. By doing so, you may be able to trade electronically not only with that government, but potentially other governments and customers too.

If you are considering participating in an e-marketplace, you should make sure that it supports open standards like those mentioned in the APCC Framework, and is committed to accommodating changing standards.

Issue	Considerations
Upfront joining fees and transaction costs	Fees may be initially set at a low level to encourage participation. However, once the e-marketplace is well established, it could increase prices beyond the level feasible for small business.
Investment in technology	To fully utilise the benefits of e-marketplaces, small businesses may need to make an investment in technology. Sellers, for example, may need to establish an online catalogue. In some cases, e-marketplaces may offer an Application Service Provider (ASP) solution, so that a small business does not need to undertake an infrastructure investment. However, the fees for such services may still be significant.

2.5 Electronic invoicing and invoiceless trading

Different approaches can be used to improve arrangements for the invoicing phase of the trading cycle. One way is to send invoices electronically to your customers. Another is not to send invoices at all - to move to invoiceless trading. Both approaches have advantages. Whether it makes sense for you to adopt one (or both) of these approaches depends on your own business processes and e-commerce capabilities, as well as those of your trading partners.

Sending invoices electronically

You can apply e-commerce in the invoicing process by sending invoices electronically to your customers. Some suppliers send invoices to their customers in the form of an email; sometimes the process is highly automated, with the supplier's systems generating the invoices and sending them to customers' email addresses automatically.

Where an agency is conducting a large number of transactions with you, it may be more appropriate for you to provide the invoice/transaction data in the form of a file in an agreed format. This would allow the agency to upload the data directly into its financial systems for processing, thus avoiding the need to re-key the data into its systems.

If the invoice or transaction data is confidential, you will need to ensure appropriate security arrangements are in place to protect it ¹¹. In all cases, the arrangements for invoicing must be agreed between both trading partners.

Invoiceless trading

Several Commonwealth Government agencies are using 'invoiceless trading' in their dealings with some suppliers. Invoiceless trading is also called Evaluated Receipt Settlement. Where the buyer and supplier have agreed to trade in this way, the buyer pays the supplier once goods and/or services have been provided satisfactorily (or at an agreed period after receipt), without waiting to receive an invoice. Invoiceless trading thus streamlines procurement by eliminating a redundant business process. Arrangements for invoiceless trading would usually be agreed in the contract between the trading partners.

Under the Goods and Service Tax (GST) arrangements, suppliers are generally obliged to provide a tax invoice to the buyer. If this requirement is applied in all cases, it would make it impossible to conduct invoiceless trading. However, the Australian Taxation Office (ATO) has issued a number of rulings relating to Recipient Created Tax Invoices (RCTIs) which address this issue. These rulings allow the buyer (the recipient) to create a tax invoice in specified circumstances. The buyer can then use the RCTI to claim a GST credit from the ATO. The buyer must also provide a copy of the RCTI to the supplier.

The rulings allow government bodies to use RCTIs, and several Commonwealth agencies are using them in their dealings with some suppliers. The following diagram is a high-level illustration of this process.

Case study: The Department of Immigration, Multicultural and Indigenous Affairs' (DIMIA) translating and interpreting service has been granted approval by the ATO to generate Recipient Created Tax Invoices (RCTIs) under Tax Ruling GSTR 2000/10. This was done for some of the 2000 GST-registered contract interpreters and translators (TIS contractors) engaged to provide telephone/on-site (face-to-face) interpreting and document translation services to DIMIA or its clients.

The GST legislation requires the supplier (the TIS contractor in this case) to issue a tax invoice in respect of a taxable supply that is subject to GST. However, in some circumstances the supplier may not know the value of the supply as this is determined by the recipient of the supply (TIS in this case). In this situation, the legislation allows the recipient to issue a RCTI.

Where an RCTI is used, the supplier and the recipient of the supply must enter into an agreement covering the issues as required by Tax Ruling GSTR2000/10.

Both parties must agree that the:

a) recipient can issue tax invoices in respect of the supplies on behalf of the supplier

b) supplier will not issue tax invoices in respect of those supplies

c) supplier acknowledges that it is registered for GST when it enters into the agreement and that it will notify the recipient if it ceases to be registered

d) recipient acknowledges that it is registered for GST when it enters into the agreement and that it will notify the supplier if it ceases to be registered or if it ceases to satisfy any of the requirements of the Tax Commissioner's determination covering RCTIs.

A RCTI is currently printed from TIS's Financial Management Information System (OGF), and this is mailed to the contractor along with their payslip. Developments are under way to amalgamate the payslip with the OGF RCTI, which will provide all job details to the contractor for that fortnight.

Relevant tax rulings (available at http://law.ato.gov.au/atolaw/) are:

• Goods and Services Tax Ruling (GSTR) 2000/10, Goods and services tax: recipient created tax invoices
• A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No.34) 2000

If you wish to provide invoices electronically to your agency customers, or to trade invoicelessly with them, you should discuss whether or not they are able to do so, and what their plans are in this area.

2.6 Being paid electronically

It is Commonwealth policy to pay all suppliers electronically. The Prime Minister's Investing for Growth statement of December 1997 included a commitment to pay all suppliers electronically by 2000. This was reiterated in the Commonwealth Electronic Procurement - Implementation Strategy (April 2000), which required agencies to pay all suppliers electronically by the end of 2000.

Electronic payment (e-payment) is generally payment by direct credit to a supplier's bank account or electronic transfer of credit card details. Most e-payments by Commonwealth Government agencies are made by direct credit, sometimes also referred to as electronic funds transfer (EFT).

E-payment benefits both agencies and suppliers. Agencies benefit because it is much cheaper to make a payment by direct credit than by cheque (typically by a multiple of 15 or more). Suppliers benefit because the payment is deposited into their account directly, so that there is no need to go to a bank branch and manually bank the cheque. E-payment also avoids delays due to cheque clearance, with suppliers usually able to access the funds a day after an agency instructs its bank to make payment.

The need to provide bank account details to agencies

To make e-payment to a supplier by direct credit, an agency must know the supplier's bank account details, such as the bank number, account number and account name. An agency must therefore obtain this information from a supplier, and provide it to its bank when instructing the bank to make payment. A contract with a supplier should usually specify the supplier's bank account details, or alternatively, a means for providing the correct details. A common requirement is that the account number should be specified on invoices provided by the supplier.

Suppliers should be aware of the need to have reliable procedures for providing this information to an agency. Where incorrect account details have been provided, and an agency has made payment to an incorrect account, the supplier may not be able to recover any further funds from the agency concerned.

Generally, an agency will only need to confirm the supplier's account details provided where confirmation is required under the terms of the contract to which the payment relates; or where the payment is made in circumstances in which non-confirmation would constitute negligence. The types of situations where non-confirmation might be negligent are those situations where agencies should naturally exercise caution, for example:

• where the supplier is a medium to large business, but the account name indicates that the payment is to be made into a personal account; or
• where the supplier is local, but the payer agency is asked to make a payment into an offshore account.

In these circumstances, the payer agency should confirm the account details with suitably authorised employees of the supplier, other than the employee who initially provided the details. Given the need to report any potential fraud as a matter of urgency, it may be appropriate for the confirmation to be made by way of a telephone call rather than by written correspondence.

Obtaining remittance advice from the paying agency

One of the characteristics of the direct credit system is that it allows only a small amount of information to accompany a payment (typically, only 18 characters of text). This information, which appears on your bank statement, is generally enough to identify the payment. For example, where the direct credit is in full payment for an invoice, if the agency provides the invoice number with the payment that will allow you to identify what the payment is for. But where the direct credit is in part payment for an invoice, or in payment for multiple invoices, you may need more information.

Where the information accompanying a payment is not sufficient to identify it, you should request the agency to provide remittance advice separately in your preferred medium (for example, email, fax). The following examples demonstrate how some agencies are providing remittance advice to suppliers.

Case study: The Department of Finance and Administration (Finance) adjusted its financial system to produce remittance advice at least three working days before a payment was made to a supplier. This way Finance was able to assure suppliers that they would receive their remittance advice on the same day as the direct credit payment, if not before. Currently, 95 per cent of Finance's suppliers are paid through direct credit. This new approach took nine months to implement. Finance also has the ability to email remittance advices automatically.

Case study: In July 2000, AusAid implemented an electronic remittance advice system which notifies suppliers of direct credit information by either email or fax from AusAid's payment records. The advice informs the payee that a payment will be credited to their nominated account, with sufficient detail to identify the payment. The supplier usually receives this advice before the direct credit payment appears in their bank account.

Other agencies have implemented arrangements, which allow them to send remittance advice on an exception basis, that is, only when the accompanying information does not sufficiently identify the payment. The diagram below, illustrates two of the most important ways in which agencies can provide remittance advice to suppliers - directly, or through their bank.

Information about how you can get more out of online banking is available in the NOIE publication, Internet banking for business.

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Footnotes

⁷ For further information about Commonwealth procurement policy, see Appendix 1.

⁸ At http://www.apcc.gov.au/apcc/docs/APCCFRAMEWORK2002.pdf

⁹ An 'open' standard has usually been developed in a consultative process with stakeholders. A 'proprietary' standard, on the other hand, is developed and owned by a particular vendor and not publicly available.

¹⁰ See ACCC, Ecommerce and Competition Issues under the Trade Practices Act 1974 - Discussion Paper, 2001

¹¹ See section 3 for more information about security issues.