Benefits of electronic invoicing for companies
Electronic invoicing, or electronic invoicing, as its name implies, is the electronic exchange of invoice documents between a supplier and the customer. Electronic invoicing goes beyond simply sending a PDF receipt to a customer via email. A true electronic invoicing solution is an integrated solution in which an electronic invoice is seamlessly transmitted and received between the supplier’s accounts receivable system and the customer’s accounts payable system. Electronic invoicing documents are normally exchanged in EDI or XML formats. (Source: Basic concepts of electronic invoicing)
Why switch from a manual paper system to an electronic invoicing system? The paper-based system is time consuming and error prone. As such, paper billing tends to have higher costs and longer processing life cycles.
Despite the widespread adoption of automation for many business processes, accounts payable and accounts receivable processes remain largely manual (Source: Dolphin Corp).
Benefits of electronic invoicing for suppliers
The move to electronic invoicing solves these problems, resulting in faster processing, lower transaction costs, greater visibility, and significant savings. From a business perspective, electronic invoicing offers many benefits throughout the AR / AP process.
For starters, there is no mail to sort, distribute, or open. Not only that, electronic invoicing eliminates the costs associated with paper invoices, envelopes, and postage. Plus, it takes much less time to process your bill payment. With the new system, you can create and distribute an entire batch of invoices in just a few clicks. (Source: Pay Simple)
Then you do not need to enter data. Since the payment automatically arrives at the buyer’s accounts payable system, the accounts payable clerk does not need to enter the data by hand. Electronic invoicing eliminates the possibility of errors and ensures accuracy. Similarly, there is no need to scan paper invoices, another manual process that takes time and can be prone to errors such as unreadable scans.
Meanwhile, all invoices are delivered instantly and securely. By removing mail from the equation, you are also removing multiple days from receipt to payment. Similarly, electronic payments speed up the process and mean you don’t have to queue at the bank to deposit your money.
Electronic invoices are easy to store and view, without the need for physical filing cabinets. As you follow up with customers, you can easily include a link or an attachment to the original payment receipt, purchase order, or related documentation.
Benefits of electronic invoicing for buyers
Electronic invoices also offer benefits for your customers. For example, you can offer a variety of payment options such as debit, credit, and ACH. The paperless system also opens the door to automated reminders with integrated “pay now” buttons that link to the invoice. Your customers’ accounts payable team will appreciate not having to manually enter data or scan the paper invoice as well.
Switching to electronic invoicing saves time and money, a mutual benefit for both parties.
1. Simple payment, “Advantages of electronic invoicing”, http://paysimple.com/blog/2011/07/13/advantages-of-electronic-invoicing-and-billing/
2. Dolphin Corp, “Electronic Invoicing for Accounts Payable”, http://www.dolphin-corp.com/business-process-management/e-invoicing-for-accounts-payable/
3. Electronic Invoicing Basics, “What is Electronic Invoicing?”, Http://www.einvoicingbasics.co.uk/what-is-e-invoicing/