Accounting Flow Of Purchasing And The Accounts It Hits Benefits of Electronic Invoicing for Businesses

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Benefits of Electronic Invoicing for Businesses

Electronic invoicing, or e-invoicing, as the name suggests, is the electronic exchange of invoice documents between suppliers and customers. Electronic invoicing goes beyond just sending a PDF receipt to a customer via email. A true e-invoicing solution is an integrated solution where electronic invoices are transmitted and received between the supplier’s accounts receivable system and the customer’s accounts payable system. E-invoicing documents are typically exchanged in EDI or XML format. (Source: E-Invoicing Basics)

Why switch from a manual, paper-based system to an electronic invoicing system? Paper-based systems are notoriously time-consuming and prone to errors. Therefore, paper invoicing has high costs and a long processing lifecycle.

Despite the widespread adoption of automation for many business processes, accounts payable and accounts receivable processes remain largely manual (Source: Dolphin Corp).

Benefits of e-invoicing for suppliers

Switching to e-invoicing solves these problems, resulting in faster processing, lower transaction costs, greater visibility and significant savings. From a business perspective, e-invoicing offers several benefits throughout the AR/AP process.

For starters, there’s no mail to sort, deliver or open. Not only this, e-invoicing eliminates the costs associated with paper bills, envelopes and postage. Moreover, it takes very less processing time to generate bill payments. With the new system, you can create and distribute an entire batch of invoices with just a few clicks. (Source: Pay Simple)

Further, no data entry is required. Since payments are automatically entered into the buyer’s accounts payable system, the accounts payable clerk does not need to manually enter data. E-invoicing eliminates the possibility of mistakes and ensures accuracy. Similarly, there is no need to scan paper bills, another manual process that is time-consuming and prone to errors such as improper scans.

Meanwhile, all invoices are delivered instantly and securely. By removing mail from the equation, you’re also removing many days from receipt to payment. Likewise, electronic payments speed up the process and mean that you don’t have to queue up at the bank to deposit your money.

Electronic invoices are easy to store and reference, requiring no physical file cabinets. When you follow up with customers, you can easily include a link or attachment to the original payment receipt, purchase order, or related documents.

Benefits of e-invoicing for buyers

E-invoices also offer benefits for your customers. For example, you can offer different payment options like debit, credit and ACH. A paperless system also opens the door to fully automated reminders with integrated “pay now” buttons linked to the bill. Your customer’s payables team will also appreciate not having to enter data or scan paper bills.

Switching to e-invoicing saves time and money, a win-win for both sides.

Works Cited:

1. Pay Simple, “Advantages of Electronic Invoicing and Billing,” – http://paysimple.com/blog/2011/07/13/advantages-of-electronic-invoicing-and-billing/

2. Dolphin Corp, “E-Invoicing for Accounts Payable,” – http://www.dolphin-corp.com/business-process-management/e-invoicing-for-accounts-payable/

3. E-Invoicing Basics, “What is e-invoicing,” – http://www.einvoicingbasics.co.uk/what-is-e-invoicing/

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