According to recent studies, using e-invoicing software is approximately 60-80% more efficient than traditional paper-based and PDF invoicing. That can mean big savings for companies, governments, or even the self-employed doing things the traditional way. Even those who use their own tax or Enterprise Resource Planning (ERP) systems can benefit from e-invoicing software and today’s top solutions make integration with a variety of systems and platforms easy.
E-invoicing is primarily used to streamline business-to-business (B2B) processes between the buyer and supplier. Like a traditional invoice, it’s a document used to record a transaction sent to a buyer for the cost of purchasing goods or services. It’s often forwarded to the accounts receivable department to be processed when using traditional invoicing methods, or automatically processed if using electronic invoicing software.
Past invoicing processes are quickly being replaced by more effective, efficient, and accurate methods like e-invoicing because they offer a host of advantages over paper invoicing.
Error reduction
One of the foremost benefits of e-invoice software is that it virtually eliminates errors, especially for those still using paper invoicing processes (or digital PDFs) and performing manual data entry, both of which are prone to human error. Electronic invoice software can also help stop duplicate payments of the same invoice that may have been missed, avoid late payments, and reduce manual labour.
Usability
Electronic invoicing software is designed to be user-friendly. Many implementations can be easily integrated into most of today’s leading ERP and financial software systems, as well as requiring very little IT and staff training. The best software packages enable collaboration with the organisation’s accounting department and supply chain to ensure a smooth transaction process and streamlined procedures. By completely automating the payment process, the human element is nearly entirely cut out and the e-invoice system takes care of everything, freeing up valuable human resources on both the buyer and seller’s end. Additionally, repeat customers don’t need to fill out information more than once and it provides easier payment methods for clients.
Last but certainly not least, e-invoice software also makes all accounts receivable (AR) information easily retrievable under one umbrella at the simple click of a button. Anyone in an accounting organisation can access the important data they need from anywhere at any time.
Efficiency
Perhaps the amount of time saved by e-invoice software is arguably its most important component. As mentioned above, buyers/sellers can make their payment processing accounting procedures up to 80% more efficient when switching to e-invoicing, which is monumental in terms of time savings. Automated technology not only processes invoices immediately when they’re received but also makes it easy to recall transaction data when required for financial reviews, audits, and data collection by tax authorities.
Preventing fraud
Unfortunately, businesses and governments still need to keep a close eye to catch fraudulent invoices, but automating the process with the right electronic invoice software makes things much easier. It enhances security and prevents fraud by enabling buyers/sellers to maintain a running list of clients they work with and employ background checks before issuing payments. Also, there’s less chance of fraud because all the data is sent electronically directly from the buyer/seller’s system to the other party, making it impossible to intercept.
Enhanced timelines
Late payments are something B2B businesses frequently struggle with, but e-invoicing solutions help improve timelines and minimise late payments. They do so by providing enhanced visibility into the payment process including all relevant due dates, sending out notifications automatically for upcoming payments when necessary, and streamlining the payment approval process. This helps build trust and transparency among stakeholders and with clients.
Environmentally friendly
To help the environment, one of the very first things that can be done is to eliminate paper processing procedures, whether it be for accounts receivable or any other department. E-invoice software helps completely cut paper invoices out of the picture, offering a holistic technological solution that is secure, fast, and reliable, and significantly reduces carbon footprint.
Improved compliance
E-invoicing makes staying in compliance much easier. With efforts to modernise and standardise invoice processing developing rapidly both in the UK and abroad, remaining in compliance can be a costly and complicated exercise. However, e-invoices make it cheaper and easier because software systems come with all the necessary data and features built-in to ensure the enterprise is adhering to the compliance rules governing the entity/government they are doing business with. It enables organisations to keep invoice records for the legally required amount of time in their locale, as well as authenticate documents with e-signatures, and securely manage any other business-crucial accounting info.
Tax compliance
Another hurdle for B2B companies to navigate is the tax requirements of various governments and businesses throughout Europe and abroad. However, today’s leading e-invoice solutions cater for that by providing detailed information about tax processes worldwide, as well as tools to calculate taxes, remain in compliance, and avoid audits down the road.
Not only is e-invoice software designed to handle foreign currency payments and process payments from around the globe, but most of today’s major business languages and tax adjustments are accounted for as well.
Custom invoicing
Just like businesses and governments can be drastically different, so too can their invoice design, which is why today’s top e-invoice software provides templates for creating custom invoices. Not only can they create and save their own unique templates, but also develop personalised reports, create branded invoices with their logo and company colours, and design forms for various uses. Each custom invoice of course will enable them to add in everything from pricing to invoice number, discounts, and more.
Key data insight
Creating historic invoicing reports or taking an overall view of an invoicing procedure is easy with electronic invoicing solutions. Since nearly all e-invoice software comes equipped to offer both the electronic data necessary for an invoicing system, as well as an attached PDF invoice, they can easily monitor financial transactions. This can provide important reporting information such as determining average payment cycles, outlining what clients pay on time, etc.
There are several types of popular e-invoice solutions out there. The best one for any enterprise accounting department or government will depend upon their needs and expectations. But the most popular include cloud-based solutions, desktop software, pre-packaged integration solutions, and mobile applications.
Automated invoice management and processing
As mentioned above, all e-invoicing software will offer various levels of automation for payment processing, saving time and money.
Customisable templates and forms for professional invoices
All e-invoices can be easily customised to suit a business user's needs or those of the B2B companies they work with.
Credit card payments and direct debit options
Electronic invoicing of course makes credit card processing and direct debit payments easy, so repeat customers can simply set up their recurring payments once and let the automated features take over.
Automatic payment reminders and unpaid invoice tracking
E-invoice software regularly issues reminders for clients that have recurring payments to ensure they’re aware of them, as well as those that repeatedly pay late to minimise late payments, fees, fines, etc.
Cloud storage for digital invoices and records
Since e-invoicing is also an effort at reducing paper, many software systems will provide cloud data storage for invoices and important accounting records to reduce hefty paper storage fees, as well as the risk of important payment data being lost or damaged by acts of God.
It’s easy to see why there’s been such a push over the years to move to electronic invoicing methods. Not only does it help buyers and suppliers save money and remain in compliance but can improve their business relationships and open global doors for business. It’s also the most secure, fastest, eco-friendly, and reliable invoicing method to date for accounting leaders.