Invoicing is the first and most important part of preserving financial records. Receiving an invoice after providing goods or services creates a financial responsibility. Most businesses use accounting software to generate invoices, and payments are processed online. Invoice sharing still requires human interaction, even when handled by accounting software.

Paper invoices are still widely used since most businesses issue them and send them out by regular mail. Certain businesses use email for sharing and following up on invoices. E invoices may send and receive invoices electronically between a buyer and a seller. E-Invoicing makes the invoicing process more streamlined by automating and eliminating the need for human involvement.

While certain enterprises on a global scale are using E-Invoicing, many more have yet to realize their full potential.

Sending and approving bills between a buyer and a seller may be done automatically and with little to no human interaction, thanks to electronic invoices (e-invoices). This implies that an electronic invoice is generated, sent, and received. As a result, both purchasers and vendors may streamline their invoicing processes with this newfound capability.

Electronic invoicing (or e-invoices) has revolutionized invoice administration in recent years by automating formerly labour-intensive tasks and reducing human error.

Indeed, studies reveal that by 2027, the worldwide e-invoicing industry will have grown from its 2021 value of $8.74 billion to an anticipated $29.68 billion.

While many people are aware of electronic invoicing, few company owners have more than a surface-level familiarity with the concept, implementation, or various advantages of electronic data interchange.

Here, you’ll learn all you need to know about e-invoicing, from the fundamentals of the evolution of the practice to the obstacles faced by those just getting started in the field.

E invoicing solution is a time-saving and cost-cutting billing system over manual processing that we will also present and explain.

What is e-Invoicing?

Electronic Invoicing, or E-invoicing, is the automated process of suppliers creating and transmitting electronic invoices to customers in a standard format to guarantee system compatibility. E-invoicing offers accounts payable workflow automation connected with ERP or accounting software processing instead of laborious data input of paper invoices.

EDI (electronic data interchange), XML (extensible markup language), and CSV (comma-separated values) are standard export file formats for e-invoicing. To verify that invoice data is accurate before being sent to the customer’s system, e-invoicing systems integrate automated validation against the rules as part of the invoicing process.

However, the digitalization of paper invoices is distinct from electronic billing. This is not e-invoicing if you snap a picture of a paper invoice or use an app to turn it into a PDF invoice. If it was not issued electronically and did not include machine-readable, structured data, it is not an e-invoice.

How Does e-invoicing Work? (Show Process)

Integrating electronic invoicing with existing accounting or ERP systems maximizes business benefits. With this connection, businesses may easily automate the majority of the tasks involved in the billing process.

Let’s pretend a business usually bills clients after orders have been sent out. An invoice may be generated and sent out automatically by the ERP system at that time, based on the information in the client order, without the need for any extra input from the user.

Customers who receive invoices in this format may easily import the documents into various popular accounting software programs.
The customer’s accounting software may automatically process the invoice by comparing it to the original purchase order and the delivered products. If everything checks up, the client will pay the bill.

How electronic invoices are made differs from one piece of software to the next (more on that below). However, the fundamental procedures will be the same:

1. Inform Your Customers that You are Opting for an e-Invoicing Solution

Ensure your consumers can and want to receive an electronic invoice before sending them. You may require their signed permission to go to certain countries. Verify their valid email address if you want to send bills electronically.

2. Set up an e-Invoice

With the help of modern accounting software, firms can easily automate the invoicing process and cater to their client’s specific billing requirements. Ensure your electronic invoice processing system and format contains all the information needed to properly identify the transaction, supplier, client, and other relevant facts, such as payment terms, taxes, and discounts.

3. Create an e-Invoice

Electronic invoices, applicable taxes, and client discounts should be generated mechanically from sales orders inside your accounting software.

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4. Send the e-invoice to the Customer

Send the electronic invoice to clients through email or a protected gateway.

Benefits of e-invoicing

With electronic invoicing, firms may automate and simplify the issuing and payment of bills. E-Invoicing reduces operating expenses associated with human labour.

With E-Invoicing, exchanging and paying for invoices may be carried out more rapidly and effectively since invoice data can be gathered, handled, and maintained with less effort and time. Here are the benefits of electronic invoicing.

Overall ease and enhanced efficiency. Using invoice templates, businesses can send their invoices instantly and securely from anywhere worldwide, saving countless hours of manual labour.

Automated and hands-free billing processing. The automated feature of e-invoicing may save more time for the accounts payable department of small businesses that issue recurring invoices.

Advance payments. Reduce the risk of late payments associated with paper invoices and enhance your cash flow with faster, simplified payments that are updated in real-time.

Fewer bottlenecks. Manually correcting inaccuracies on paper invoices is expensive and time-consuming. With invoicing software, you can eliminate the risk of human mistakes and make changes rapidly, which are reflected promptly in your invoicing portal—your one source of truth.

Challenges with e-invoicing

Despite the many advantages of e invoices, it is vital to be aware of possible implementation challenges. Changing to e-invoicing may need changes to an organization’s internal operations and how it interacts with its customers and vendors.

There are also compliance and legal requirement concerns in certain places. Here are some of the possible obstacles:

1. Regulatory Compliance

When trading with public-sector entities and, in certain situations, even with other enterprises, several nations mandate the usage of particular e-invoicing formats and networks. Other frequent requirements include digital signatures, automatic tax reporting, and the storage of electronic invoices for a certain period.

2. Customer Resistance

Not every client may be able to benefit from e-invoicing fully. Some may be unfamiliar with getting bills by email. Before suppliers may send electronic invoices to clients in several nations, customers must first provide their authorization.

3. Workflow Changes

The AR and AP processes might undergo a radical transformation thanks to electronic invoicing. Although the improvements might simplify workers’ lives, some individuals may resist abandoning traditional, time-tested processes. It is crucial to educate them beforehand.

4. Spam Filters

If electronic bills are delivered through email, they may end up in the spam mailboxes of clients. This may be prevented by delivering bills and notifying clients via a customer portal.


E-invoicing must be the most pervasive and influential of the several global invoicing trends developing now.

This technique results in lower expenses, less administrative labor, and happy consumers and accounting personnel.

Although installing and locating the ideal e-invoicing system might be somewhat hard, the hours of deliberation, internal and external dialogues, and financial commitment are typically well worth it.

No other invoicing best practice, including automated follow-ups, will deliver a comparable return on investment.

Consider Moon Invoice, an online invoice software developed to enable electronic billing and invoicing, if you choose to go on this adventure.

Moon Invoice streamlines the time-consuming and error-prone process of creating and sending paper invoices by replacing them with electronic ones that can be sent out instantly and tracked electronically.

Invoices may be sent by email or a variety of other channels, and the accounting staff can modify standard invoice templates to suit the specifics of each client’s business. Moon Invoice is a tool that may automate the invoicing process for businesses.