Electronic invoicing or simply e-invoicing is actually the exchange of invoice documents electronically which takes place between the customer and the supplier. E-invoicing has gone beyond sending PDF receipt to customers through email. True electronic invoicing solution is integrated solution where the invoice is received and transmitted between the accounts receivable system of the supplier and the account payable system by the customer. As a matter of fact, XML or EDI formats are what used for electronic invoicing documents.
You may be wondering why should you switch from the paper based, manual system to e-invoicing system? One reason to do so is that, the former is very open to errors and also, the process is time consuming. For this reason, it has made paper invoicing to be costly and took longer processing lifecycle too. Even though many have embraced automation for various business processes, the accounts receivable and accounts payable remain manual.
As a matter of fact, there are many advantages of integrating e-invoicing for supplies.
As you decide to switch to electronic invoicing, it will help solving these problems that can result to greater visibility, faster processing, big savings and lower transaction costs. From business perspective, electronic invoicing provides various benefits throughout AP/AR process.
There’s no mail that have to be distributed, opened or sorted for beginners. In addition to that, e-invoicing is ridding of the costs associated with envelopes, postage and paper bills. Aside from that, it requires less amount of time to process 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. Since the payments go to the accounts payable system of the customer, there is no reason for the accounts payable clerk to enter the data by hand. 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.
On the other hand, you can ensure that the invoices are delivered instantly and securely. By eliminating mail, you are freeing yourself from days from receipt to payment. Likewise, e-invoicing are speeding up the processes meaning, there’s no need to wait in long lines at the bank just to have your money deposited. 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.
As for buyers, they can also benefit from e-invoicing like being provided with varieties of payment options similar to ACH, credit and debit etc.