Having effective financial processes is critical for any business to succeed. This involves taking all the small details into considerations, including having proper invoicing plans. An invoice is an important financial document that creates a sales agreement between your business and your clients. In fact, creating invoices is the prerequisite to receiving payments from your customers. The conventional invoicing methods are gradually becoming redundant in the modern workspace. Businesses are rapidly moving towards e-invoicing as a convenient way of seeking payments from their clients. The content of an electronic and a paper-based invoice is pretty much the same; the only difference comes in the mode of delivery. With electronic invoicing (e-invoicing), you exchange the invoice document with your clients in an integrated electronic format.
The emergence of e-invoicing has made it easier and less costly to do business today. Many businesses are embracing e-invoicing because of the many benefits that come with it. Here are eight key benefits that e-invoicing can bring to your small business.
1. Reduction in Paper Costs & Carbon Footprint
E-invoicing is one of the many ways modern businesses use to reduce the cost of paper transactions and conserve the environment by reducing carbon footprint. Initially, the cost of printing invoices and sending them by post was eating into the business’ working capital, thereby reducing the profit margin. Today, businesses can save up to 80% on invoice processing costs, making it easier to optimize profits.
Cumulatively, the global amount of paper invoices and bills is estimated to be about $500 billion every year. The idea of going electronic with your invoicing work is always eventually going to have a positive impact on the environment over time. Additionally, electronic invoice software helps you make and receive online payments, which cuts the need for cash and checks in your financial transactions.
2. Automated Dispatch and Time Savings
Before e-invoicing, businesses used to consume a lot of time typing, printing, and sending paper invoices to the clients, not to mention the additional time spent waiting for the client to respond and send in payment. All this changed with the emergence of e-invoicing. You can now generate and send some of the best invoices automatically using a reliable invoice generator of your choice.
Using the best invoice invoicing app, everything runs smoothly right from invoice creation to the moment the buyer archives the invoice after making the payment. The whole payment process is fully automated, making it easier to manage invoices and save time for other important issues.
3. Easy Tracking and Follow-up
One thing about invoices is that you’ll always want them to be processed as fast as possible and the payment to come in almost immediately. However, that has never been possible with the conventional way of invoicing. You had to send the invoice and sit back, waiting for the client to receive and respond to it without a clear picture of what’s going on in between.
E-invoicing helps you track and follow up your invoice and even send reminders electronically to your clients to pay faster. An invoice software will help you know when your invoice has been sent, viewed by your client, and paid. You can also access information about your invoice progress anywhere you go, as most invoice apps are accessible to even the tiniest of gadgets.
4. Reduction in Mailing Costs
While processing an invoice manually, you will incur numerous associated costs, including mailing costs. It is even more costly when the client you are dealing with is situated miles away. With the entrance of e-invoicing, businesses no longer have to worry about mailing costs. With a single click, you can have your ready invoice sent to your client, who is located in any part of the world. They can receive it immediately, work on it within minutes and even process your payment.
The accumulative amount of money you paid for the invoice to pass through various mail posts is drastically reduced.
5. Quick Delivery and No Excuse for Mailing Delays
All parties in an invoicing contract understand the factors that may cause delays in invoice delivery and processing. Anytime you use e-invoicing apps to create and send your invoices, you eliminate the possibility of clients giving you excuses about unanswered and unpaid invoices. The process is also quicker, and you could even get paid within the same day of submitting your invoice to your client, depending on its complexity.
E-invoicing is practically a fast-invoicing option as many unnecessary procedures are cut off from the digital process. With e-invoicing, both you and your customers get to enjoy swift invoicing services for faster and more reliable transactions.
6. Prompt Payment
As a businessperson, receiving your payments on time is one of the critical activities that help your business run smoothly for a long time. Prompt payments enable you to pay your bills on time and maintain a constant cash flow for normal business operations. E-invoicing allows you to send your invoices to your clients in time so they can review and process them early enough.
The processing time is also quick, with the various e-invoicing software making it easier for your clients to process payment much faster. There is also no need to go to the bank to collect checks or wait for days for the checks to mature, since you can access faster payment methods like PayPal using the invoice software. With quicker payments, you save the money spent on overdraft charges or loan interest. Remember, delays in payments have a financial cost and this can be minimized with e-invoicing.
7. Better Automation and Reconciliation
The manual invoicing system makes the invoice creation and delivery process tiresome and full of errors. It is always challenging to create accurate invoices, especially when writing invoices for multiple clients. To avoid the fatigue that comes with writing multiple invoices, many businesses have embraced e-invoicing to generate accurate invoices automatically.
Additionally, the process of invoice reconciliation is too demanding when done manually. You have to match your bank statements with the incoming and outgoing invoices, one after the other, to makes sure your account figures tally. E-invoicing allows for an easier reconciliation process where the heavy comparison is made online in the invoice app faster and more accurately. You spend less time reconciling your accounts and still get much more accurate results than manually running them. Both your invoicing software and your bank statements can be integrated into your bookkeeping software so everything reconciled automatically.
8. Better Recordkeeping
It beats logic that online storage space works better than manual record keeping. Physical offices are gradually becoming smaller, and one of the best ways to save on physical space is to keep files and books out of the shelves and into soft cloud storage. Many invoice apps link with the cloud storage option making it possible to store all your invoicing data in the cloud.
You can always access all the critical information you need from any place using any of the smart gadgets you own. You also don’t have to worry about losing your invoicing data to accidents like fire and theft. Cloud storage is safe, and you can always extract files easily whenever you need them through a simple search.
The first step of optimizing the benefits of e-invoicing is getting hold of one of the best invoice apps available in the market today. Once you have everything set and running, e-invoicing is one of the financial management solutions that bring significant changes to your business. Whether you are just starting a business or are already established, you can never afford to miss out on e-invoicing strategies if you want your business to grow.