Processing just one invoice manually can indicate wasted hours along with a lot of annoyance. Most of the companies out there obtain invoices in various ways. While many are delivered by means of snail mail, the others are e-mailed or delivered digitally. Once the bill is obtained by the accounts payable section from the supplier, the invoice has to be entered into the bookkeeping system by hand. This process consumes a long time in addition to labor resources and is vulnerable to error as well. Managing this process manually can result in quite a few entry issues, late payments plus compliance hazards.
Once the details are extracted from the bill, it has to be authorized and this usually takes multiple approvers or departments. Once the bill is approved, the transaction can be handed over to the merchant. Depending on the time of the approval of the bill, finance departments must carry out well-informed decisions regarding when is it best to pay specific invoices for supporting the flow of cash for other obligations.
Employees are investing lots of their time chasing down executives for authorization when it comes to manual invoice approval procedures, and they need to reply vendors’ followup demands, and go through piles of documents for completing one invoice. They also need to fix the same mistakes again and again. In no time, your company has already piled up late payments as well as a lack of up-to-date payout.
Finance divisions are thinking about technology like automating to work better, not harder, plus get rid of repeated chores. The financial frontrunners focus on growing efficiency plus visibility while lowering the invoice costs. This objective begs the challenging question - how finance departments will be able to cut costs without sacrificing crucial procedures and small details? Nearly all finance departments begin their automation quest with invoice process problems and eventually taking the help of e-invoicing solutions.
How e-Invoicing works?
To put it simply, an electronic invoice will enable companies to deal with plus streamline invoices that are emailed, scanned, or faxed to a centralized site so that they can be organized and managed easily. The billing software extracts plus stores all invoice information digtally in one hub that is cloud-based without any kind of manual assistance from the financial section.
One must not confuse genuine e-Invoicing with other digital invoice initiatives. OCR (Optical character recognition) of paper-based bills is scanned and used by some companies too. Others send out PDF invoices by means of email. Even though these procedures might digitize invoice storage, the accounts payable section nevertheless needs to record information from the PDF, either by manually entering information from a PDF image or by means of OCR - still wasting useless time, money and other resources on steps that can be taken care of by e-Invoicing.
E-invoicing furthermore enables your business to create internal guidelines reflecting your existing accounts payable procedures. E-Invoicing removes the burden of fixing coding mistakes, losing printed bills, or replicating bill entries that can result in duplicate payments.
The initial step of the accounts payable automation quest happens to be e-Invoicing. After getting approved, the electronic invoices are ready for a transaction. Combining e-Invoicing along with automated solutions simplifies payable workflow from beginning to end thus saving your finance division money and time. In other words, e-Invoicing helps to make delivering and acquiring electronic invoices in a more effective, precise, and convenient manner.
Below are a few ways in which e-Invoice will help small business owners and freelancers:
Advantages of e-Invoicing:
1. Send out your invoices right away
The quicker your invoices are delivered, the sooner you will likely be paid. Excellent invoicing software can help in the following ways:
- Scheduled invoicing - Organise your accounting application for sending out bills automatically at particular times and dates. It's not necessary to lift a finger.
- Direct invoicing - While sending bills on the web, you need not wait for your bookkeeper or accountant to send it for you. This will help you to lessen your expenses.
- Invoice at any time, at any place - There is no need to wait until you are back in the workplace. If you are operating a small business you may also generate invoices while you are visiting customers or when you are on the go.
Speed is simply one competitive benefit of invoicing using the web; however, there are more benefits to come.
2. Better invoice monitoring
Once your invoice is sent out, what takes place next? Typically you would delay until the deadline and keep looking at your bank account to verify if you have been paid. And subsequently you will begin chasing in the event the cash has not arrived. However, e-invoicing offers automated tracking:
- Check out payment status - Figure out which invoices are already paid, in addition to those that are due or maybe past due. All this information will be shown on only one screen for your convenience.
- Create your personal reminders - Every client is not the same. Notes plus reminders can be added for every single customer and bill from within the invoicing application.
- Reports can be run to get improved information - Ageing reports can be run on your accounts receivable, which will allow you to see which of your customers do not pay on time. Your payment conditions could then be adjusted to match each and every client.
- Develop an improved audit trail - Excellent invoicing and cloud accounting applications will make it simpler for you to keep an in depth audit trail. It is advisable to keep an eye on every single transaction in case your clients, accountant, or the authorities do have any queries.
Invoice monitoring is essential since at times neglected bills are never paid. Being a small company owner you can't afford losing cash in that manner. Online invoicing makes certain that everything is done in an organized manner.
3. Get compensated quicker
Sending a bill and getting payment is one primary objective of invoicing on the web. It makes a huge difference:
- Delivery on the same day - There is no need to worry about whether your bill has arrived or not. Some software may also send you automated updates regarding when your invoice is opened by the client.
- Usage of transaction services - You need not wait for cheques to arrive via the post. Your clients will be able to 'pay now' from within the bill itself. It's quick and simple which implies that you get compensated almost instantaneously.
- Much better protection - E-invoicing application is safe and secure. It makes use of exclusive encryption technology just like that employed by other finance institutions like banks. Your customers will be able to believe in it, and therefore, they're going to respond to your bills more quickly.
4. Save time and money
Whether the invoices are handled by you or a staff member, accountant, or bookkeeper does it for you, you're still investing in the time consumed to perform the job. Sending them digitally will help you to save your precious time in the long run:
- No longer complicated accounts reconciliation plus cashflow administration - You will be able to keep an eye on the cash flow of your company by sending invoices to your customers from your accounting application directly on a monthly, weekly, or quarterly basis.
- Forget about struggling with paperwork - No reason to seek out old invoices, duplicate identical ones or even use an outdated template once again. You simply need to do a few clicks and that's all.
- No need to worry about correctly numbering the invoices - The accounting software will take care of this, either using a sequential numbering method or an exclusive client number.
Your time happens to be money. By spending less time invoicing you will get more time for managing other essential areas of your enterprise.
5. Minimize your paperwork
Even though the paperless workplace has been forecasted for quite some time, the majority of the businesses still generate plenty of paperwork. All these need to be filed, archived, stored, plus indexed which consumes space as well.
Office space is pricey, and therefore, companies usually scan and convert their paper records to PDF and other formats, after which they destroy the originals. But why is it not possible to get rid of the money and time allocated to this as well?
If your invoices are kept online straight away, there is no need to print them out. All the things will be archived, listed plus stored digitally.
Online invoicing will not make your office paperless by itself; however, it's an additional step towards eliminating paper entirely.
6. Enable your customers to pay you
If handled properly, your customers can be motivated to pay you quicker by delivering bills online. Make sure to:
- Send out reminders - Small businesses are often busy, and therefore, it will help to deliver a reminder regarding when the transaction is due.
- Provide various payment alternatives - Think of offering bank transfers, credit card handling, or PayPal since the objective would be to make it simple for your customers to pay you.
- Start using a company template – Decent billing software allows you to customize the invoice layout for every customer, while still being consistent in how your company is represented by you. Faster payment can be done by a professional approach.
- Make use of a payment service - Use a cloud-based application to get compensated faster which will allow your customers to pay you instantly with only a mouse click
7. Create your process for getting the best from invoicing online
You require taking a few essential steps before you're prepared to reap the advantages so as to take full advantage of your invoicing application:
- Organize your system correctly - There must be a unique code for each client and each client's bill must have its personal sequential number.
- Invoices should be sent on the identical day of every month - Trustworthy, regular billing is likely to bring about dependable, regular transaction.
- Include wording regarding a small fee for delayed payment - Clients will be reminded by this to pay promptly, even though it can be a wise decision to cut dedicated customers a certain amount of slack if they usually pay on time.
- Create some basic reports - There are lots of reporting options with accounting software. Review all these and make a decision whether you would like to generate any personalized ones. Subsequently the reports must be run one or more times every month which will allow you to stay abreast of of the cash flow of your company.
Drawbacks: of e-Invoicing
- e-Invoicing spams filters - Everything is done by an electronic invoice system for you to be compensated quicker, as long as your client reaches to see it. The email services givers, at specific points, mark the invoices as junk, which is why they deliver it to a folder where users including even your clients, tend to ignore it. This will put you in a challenging condition, since you will not be having any idea regarding when your bills are placed within a spam folder.
- The clients that are offline - Your prospective clients won't be online or use the email services at certain times from their dwelling, or they might not have any email account to begin with. Many clients do not have any access to online billing, or they might not have any idea of how to run one. This is due to the fact that they have the habit of sending bills by means of paper, while a number of them might belong to the category of senior citizens, who are not acquainted with online invoicing.
- The charges - If you are running any business where the invoicing services of a company are being used to enable you to carry out your online invoicing assignments, it will be necessary to pay a small cut to that company for the services provided by them, and these charges can be included instantly.
e-Invoicing makes proper business sense
However, in spite of all these downsides, the positive aspects of online invoicing definitely outweigh the drawbacks. You will be expected by your clients to offer your services or products quickly, successfully and usually at short notice.
Therefore it is only fair that they also pay you on time. Online invoicing will enable you to get rid of many of the holds off and obstacles to payment. In this way you will get paid quicker, have much better cash flow while having more money and time to prosper your business.