What is e-Invoicing, and Why Should Your Business Use It?
Since the early days of business, invoices have been sent by mail. This slow and inefficient process relies heavily on the post office, resulting in high material costs and even lost invoices.
In today's fast-paced business world, these issues can be costly and cause significant payment delays. This is why invoicing has gone digital, and E-invoicing is becoming the new standard.
What is E-invoicing?
E-invoicing is an electronic version of a paper invoice that is sent and received electronically. It allows businesses to send invoices, accept payments, and manage their accounts receivable online.
With the invention of electronic invoicing, or e-invoicing, businesses are now able to streamline their invoicing process, saving time and money in the process.
E-invoicing offers many benefits, including reducing accounts receivable costs, material costs, clerical errors, and more. Through this guide, we will explore the top benefits of E-invoicing, how it works, and how your business can start using it today.
How Does E-Invoicing Work?
E-invoices are generated by the sender and sent electronically, typically through an electronic invoicing system or provider. The resulting invoice is intuitive, with line-by-line details, a custom company header, and sent to the customer with your company's branded messaging.
The recipient then receives the invoice by email or SMS and can proceed to make a secure payment using an embedded link. Once the payment is processed, both the sender and recipient will receive a confirmation of the transaction.
E-invoicing is a paperless process that is much more efficient and eco-friendly than traditional invoicing methods. This simple and intuitive system is quickly becoming the new standard for businesses all over the world.
Why E-Invoicing? The Benefits of Electronic Invoices
E-invoicing comes with a number of benefits that can save your business time and money.
Some of the top benefits of electronic invoices include:
Reduced Accounts Receivable Costs
E-invoicing can help reduce your accounts receivable costs by streamlining the invoicing and payment process. This eliminates the need for a large accounts receivable team to manage invoices, perform data entry tasks, and process payments.
A study by Deloitte Access Economics estimates that businesses can reduce up to 70% of their processing costs by implementing e-invoicing in place of manual or PDF invoices. In their findings, they've also discovered that every electronic invoice a company generates can deliver up to a $20 cost savings over a traditional paper invoice.
Improved Cash Flow
With E-invoicing, your business can send invoices faster and receive payments sooner. The immediate delivery reduces the amount of time that invoices spend in the accounts receivable process and can free up working capital that can be used elsewhere in the business.
In the same Deloitte study mentioned above, researchers found that electronic invoice recipients paid their invoices an average of 7 days faster than those who received paper invoices.
Reduced Clerical Errors
E-invoicing can help reduce clerical errors common in manual data entry tasks, such as transcribing paper invoices into your accounting software or miscalculations and typos in the invoicing process.
E-invoicing systems automate data entry tasks and can help ensure that the correct information is captured the first time. This not only saves your business time but can also help prevent late payments and reduce or even eliminate the need for manual interventions by your staff.
Reduced Material Costs
E-invoicing can help reduce your business's material costs, as you'll no longer need to print and mail paper invoices. This can save your business a significant amount of money on paper, printing costs, envelopes, and postage. In addition, e-invoices don't require any physical storage space, so they're cost-effective to file and much easier to retrieve.
According to the experts at Industry Week, the average costs of a paper invoice can range anywhere from $12 to $30. This includes the direct costs of materials and the postage required to mail the letter. It also consists of the indirect costs of paying your staff to manually input data, send the invoices, follow up with your customers for payment, and reconcile any issues with the invoices.
Greater Security Complete Transparency
E-invoicing can provide your business with greater security and complete transparency throughout the invoicing process. Electronic invoices are delivered and paid through a secure network that encrypts the data to prevent fraud, stolen data, and identity theft.
In addition, E-invoicing systems can provide you with a complete audit trail of all invoices sent, received, and paid. This can help your business resolve any disputes quickly and efficiently.
Simplified Archiving and Record-Keeping
E-invoicing can simplify your business's archiving and record-keeping processes, reducing the need for massive filing cabinets and storage space in your facility. E-invoices are stored electronically, which means they take up very little space on your computer, server, or network.
In addition, E-invoicing systems can help you organize and manage your invoices more effectively. Most E-invoicing systems come with features such as searchable databases and the ability to sort and filter invoices by date, customer, amount, and more. This can help you save time when you're trying to find a specific invoice or track payments.
Improved Customer Satisfaction
E-invoicing can improve your customer satisfaction by providing them with a faster and more convenient way to receive and pay their invoices. In addition, E-invoicing can help reduce your customer's accounts payable costs by simplifying their invoicing and payment processes.
Is E-Invoicing Difficult to Integrate into Your Existing Infrastructure?
One of the biggest concerns businesses have about E-invoicing is that it will be difficult to integrate into their existing accounting and invoicing infrastructure. While this may be true for some electronic invoicing solutions, it's not the case with E-invoicing from Fluid Pay.
Fluid Pay's Electronic Invoicing
E-invoicing from Fluid Pay is designed to be simple and easy to use. Our E-invoicing solution doesn't require any integration or development, so you can start sending electronic invoices within minutes of signing up.
Enjoy all of the above benefits and more with our intuitive, secure, and cost-effective electronic invoicing solution. To learn more about E-invoicing from Fluid Pay, please visit our website or contact our team today.