Electronic invoicing or e-invoicing, as the 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 genuine e-invoicing solution is an integrated solution where an electronic invoice is transferred and received seamlessly between the supplier’s accounts receivable system and the customer’s payment system. E-invoicing documents are typically exchanged in EDI or XML formats. (Source: E-Billing Basics)
Why switch from a manual, paper-based system to an electronic billing system? Paper-based system is notoriously time-consuming and prone to failure. As such, paper billing tends to have higher costs and longer processing cycles.
Despite the widespread adoption of automation for many business processes, payable and customer-driven processes remain largely manual (Source: Dolphin Corp).
Benefits of e-invoicing for suppliers
Switching to e-invoicing addresses these issues, resulting in faster processing, lower transaction costs, greater visibility and significant savings. From a business perspective, e-invoicing delivers many benefits through the AR / AP process.
First, there are no emails to sort, distribute or open. Not only that, e-invoicing eliminates costs associated with paper bills, envelopes and postage. Additionally, it takes much less time to process bill payment generation. With the new system, you can create and distribute an entire batch of invoices in just a few clicks. (Source: Pay Simple)
Next, no data entry is required. Since the payment arrives at the buyer’s customer’s payment system automatically, the payment manager does not have to enter the data manually. E-invoicing eliminates the potential for errors and ensures accuracy. Also, there is no need to scan paper bills, another manual process that takes time and may be prone to errors such as unreadable scans.
In the meantime, all invoices are delivered promptly and securely. Removing mail from the equation also removes several days from receipt to payment. Similarly, electronic payments speed up the process and mean that you do not have to wait in line at the bank to deposit your money.
Electronic invoices are easy to store and refer to without physical filing cabinets. When you follow up with customers, you can easily include a link or attachment to the original payment receipt, purchase order or related documentation.
The benefits of e-invoicing for buyers
E-invoices also offer benefits to your customers. For example, you can offer a variety of payment options, such as debit, credit and ACH. Paperless system also opens the door to automatic reminders complete with integrated “pay now” buttons linking to the bill. Your customers’ affordable team will appreciate that they don’t have to manually enter data or scan paper bills, either.
Switching to e-invoicing saves time and money, a win-win for both sides.
1. Pay Simple, “Benefits of Electronic Billing and Billing,” – http://paysimple.com/blog/2011/07/13/advantages-of-electronic-invoicing-and-billing/
2. Dolphin Corp., “E-invoicing for paid accounts” – http://www.dolphin-corp.com/business-process-management/e-invoicing-for-accounts-payable/
3. Basics of e-invoicing, “What is e-invoicing” – http://www.einvoicingbasics.co.uk/what-is-e-invoicing/