Electronic invoicing or e-invoicing as what the name suggests is basically the exchange of invoice documents electronically between the customer and supplier. Basically, e-invoicing isn’t just about sending PDF receipt to clients using email, there is more to it. True electronic invoicing solution is an integrated solution wherein the invoice is transmitted and received between the account payable system by the client and the account receivable system by the supplier. Electronic invoicing documents typically are exchanged in XML or EDI formats.
You might wonder as well to why you must consider switching from the typical paper based system to e-invoicing. Well actually, the former is vulnerable to errors and also known to be time consuming. As such, the paper invoicing has a tendency to have longer processing lifecycles and higher costs as well. While it is true that a number of different businesses have started jumping to the bandwagon still, both the accounts payable and receivable stayed manual.
Believe it or not, opting to use e-invoicing for supplies can provide you with many benefits.
The moment that you have made the decision to switch to electronic invoicing, it will help in solving these challenges that can then result to bigger savings, lower transaction costs and faster processing. From business perspective, electronic invoicing provides various benefits throughout AP/AR process.
For beginners, there is no mail to distribute, open or sort. In manual and paper based processes, it has associated envelopes, postage and paper bills which is eliminated when you use e-invoicing. Not only that, it takes lesser time in processing bill payment. With new system, you will be able to make and distribute a whole batch of invoices in just a few clicks.
Yet another benefit is the fact that it doesn’t need data entry. There is basically no need for the accounts payable clerk to manually enter the data because the payments go straight automatically to the accounts payable system of the buyer. Electronic invoicing is eliminating the possibility for committing mistakes and at the same time, provides high level of accuracy. Similarly, there is no reason to scan paper bills which is another time consuming task that has to be dealt with in manual processes.
All invoices meanwhile are securely delivered. You will be able to free several days from receipt to payment by abolishing mails. With e-invoicing you don’t have to wait for long at bank to have your money deposited which speeds the entire process. As you try to follow up on customers, it is easy to do so because you simply need to include an attachment or link to original document.
For the buyers, they can benefit from using e-invoicing too such as being provided with different payment options such as ACH, credit and debit etc.