Electronic invoicing or simply e-invoicing is actually the exchange of invoice documents electronically which takes place between the customer and the supplier. The e-invoicing has actually gone beyond sending PDF receipt to the customers via email. The real electronic invoicing solution is a system that is incorporated to which the invoice is transmitted and also, received between the accounts receivable system of supplier as well as the accounts payable system of consumers. Electronic invoicing documents are usually exchanged in XML or EDI formats.
You might wonder as well to why you must consider switching from the typical paper based system to e-invoicing. The former is known to be time consuming and also, susceptible to errors. As such, the paper invoicing has a tendency to have longer processing lifecycles and higher costs as well. Despite the fact that there are a lot of businesses that have supported automation for different business processes, accounts payable and receivable have remained manual.
As a matter of fact, there are many advantages of integrating e-invoicing for supplies.
The moment that you have made the decision to switch to electronic invoicing, it will help in solving these challenges that can then result to bigger savings, lower transaction costs and faster processing. From business perspective, electronic invoicing provides various benefits throughout AP/AR process.
For beginners, there is no mail to distribute, open or sort. In manual and paper based processes, it has associated envelopes, postage and paper bills which is eliminated when you use e-invoicing. Not only that, it takes lesser time in processing bill payment. With new system, you will be able to make and distribute a whole batch of invoices in just a few clicks.
The fact that it doesn’t require data entry is already a benefit. Since the payments go to the accounts payable system of the customer, there is no reason for the accounts payable clerk to enter the data by hand. Electronic invoicing is aiming to provide high level of accuracy by means of reducing the possibility of making mistakes. Similarly, there is no reason to scan paper bills which is another time consuming task that has to be dealt with in manual processes.
All invoices meanwhile are securely delivered. By being able to eliminate mail, you can be freed from days from the receipt to payment. With e-invoicing you don’t have to wait for long at bank to have your money deposited which speeds the entire process. As you try to follow up on customers, it is easy to do so because you simply need to include an attachment or link to original document.
For the buyers, they can benefit from using e-invoicing too such as being provided with different payment options such as ACH, credit and debit etc.