In an effort to make the exchange of invoice documents become easier between customers and suppliers, they are taking advantage of e-invoicing or electronic invoicing. The e-invoicing has actually gone beyond sending PDF receipt to the customers via email. True electronic invoicing solution is an integrated solution wherein the invoice is transmitted and received between the account payable system by the client and the account receivable system by the supplier. Electronic invoicing documents are usually exchanged in XML or EDI formats.
You may be wondering why should you switch from the paper based, manual system to e-invoicing system? One reason to do so is that, the former is very open to errors and also, the process is time consuming. As such, the paper invoicing has a tendency to have longer processing lifecycles and higher costs as well. Even though many have embraced automation for various business processes, the accounts receivable and accounts payable remain manual.
The truth is, there are numerous benefits of incorporating e-invoicing for supplies.
By switching to electronic invoicing, it solves these issues which lead to faster processing, greater visibility, lower transaction costs and big savings. From a business standpoint, electronic invoicing is can provide numerous benefits via 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. Moreover, it makes it feasible to process bill payment a lot faster. With new system, you will be able to make and distribute a whole batch of invoices in just a few clicks.
Another benefit is that, it isn’t required to do data entry. There is basically no need for the accounts payable clerk to manually enter the data because the payments go straight automatically to the accounts payable system of the buyer. 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.
On the other hand, you can ensure that the invoices are delivered instantly and securely. By eliminating mail, you are freeing yourself from days from receipt to payment. Also, e-invoicing speeds up the processes so there is no reason to wait in long lines at bank to have your money deposited. When trying to follow up to customers, you can simply include attachment or link to original purchase order, payment receipt or other documents related to it.
As for buyers, they can also benefit from e-invoicing like being provided with varieties of payment options similar to ACH, credit and debit etc.