Electronic invoicing or e-invoicing as what the name suggests is basically the exchange of invoice documents electronically between the customer and 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. Electronic invoicing documents are usually 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. 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. Despite the fact that there are a lot of businesses that have supported automation for different business processes, accounts payable and receivable have remained manual.
The truth is, there are numerous benefits of incorporating 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. Through the AP/AR process, a business can surely benefit big time from using electronic invoicing.
There’s no mail that have to be distributed, opened or sorted for beginners. Aside from that, e-invoicing gets rid of the associated costs with envelopes, postage and paper bills. Not only that, it takes lesser time in processing bill payment. In just clicks in the new system, you can get to create and at the same time, distribute a entire batch of invoices.
The fact that it doesn’t require data entry is already a benefit. 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 eradicates the odds of making mistakes while providing high level of accuracy at the same time. Similarly, there’s no need to scan paper bills which is known to be a time consuming task that should 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. When trying to follow up to customers, you can simply include attachment or link to original purchase order, payment receipt or other documents related to it.
On the buyer’s part, they can take advantage of e-invoicing by being presented with different payment methods like ACH, credit and debit etc.