Electronic invoicing or e-invoicing is widely getting acceptance across industries because of a number of reasons. From saving cost and time to its eco-friendly features are behind its prevalent use that is growing rapidly. Electronic invoicing automates the complete billing process, bringing in several types of operational benefits for a business. It reduces costs and helps in improving the overall business efficiency. The use of an electronic invoice system is also important from an environmental perspective. A paper-based invoice system may consume significant amount of paper annually in any organization. By implementing an e-invoice system, we can save thousands of trees every year.
How is e-invoicing different from online invoicing?
Electronic invoicing is an automated process in which invoice documents, such as bills, reports and invoices are exchanged between the buyer and the supplier. An e-invoice is generally available in an XML format or in any other web-based structured format. The supplier’s data can be directly fed into the account payable system of the buyer.
On the other hand, online invoices could be scanned paper invoices sent through e-mails. An online invoice is generally available in word or PDF formats and they contain unstructured data.
Recently, the European Commission recommended the implementation of e-invoicing in Europe, which gives a major boost to the electronic invoicing solutions. In Europe, government legislations are playing a catalytic role to encourage businesses to adopt e-invoicing. A global invoicing study in 2012 showed that the e-invoicing trend increased by 14% in comparison to the previous year.
Businesses are feeling a genuine need for cost-effective and efficient solutions to help automate the billing process. Therefore, e-invoicing is going to be a major trend in the near future. More and more businesses will come forward to implement the electronic invoicing solution, particularly when it is beneficial for buyers, suppliers and managers as well.
Let’s see what benefits e-invoicing can bring for diverse stakeholders:
1. Cost-effective and Time Saving
Automated invoicing process eliminates the hassles of manual data entry. Thus, it saves time and labor costs as well. There is less use of paper, which again brings down the cost of invoicing.
2. Efficient and Error-free
Manual data entry and paper based invoice handling are often prone to errors. An automated system eliminates the chances of human errors and makes the system efficient and fast.
3. Improved Payment Cycles
An electronic invoicing solution makes the invoicing process simple by fully automating the data capturing, approval and invoice generation process. This helps in avoiding payment delays and keeps the payment cycles timely and accurate.
4. Avoiding Disputes with Suppliers
An electronic invoicing system helps in account reconciliation and keeps everything visible and transparent for the parties involved in the transactions. This way, it helps address payment related disputes and improves the relationships between the parties.
1. Cost Reduction
Reduced cost is again a primary reason for a supplier to adopt an e-invoicing process. The automated system saves the paper cost, printing costs as well as the mailing costs. There are several types of costs associated with paper-based invoices that could be saved.
2. Faster Payment
Electronic invoicing can simplify the process by eliminating several hassle-prone tasks of entering data, documentation, printing invoices and mailing to the buyers. It makes the process smooth and fast to help receive payments in a timely manner.
3. Enhanced Productivity
Automated invoicing can improve efficiency with accuracy of data entry and reduction in human efforts. This brings down the chances of rejection of invoices and helps improve payment cycles.
4. Superior Customer Satisfaction
An improved invoicing process helps resolve issues and makes the whole process friendly and reliable for all parties involved. It helps improve the level of customer satisfaction.
Besides buyers and suppliers, e-invoicing helps simplify the task of business managers as well. The automated system gives managers a better control on the whole invoicing process and makes their tasks less cumbersome. This helps deliver them a higher level of customer satisfaction and they can help maintain a timely payment process to keep the revenue system of an organization at a healthy level.
There could be a variety of catalysts that can inspire different stakeholders to opt for an automated invoicing system. More importantly, today’s businesses want to present themselves as technology-friendly organizations. And for all such organizations, e-invoicing could be an important parameter to keep pace with the world that believes in adopting new technologies that are profitable too.