With tons of companies building an online presence and brand, especially over the last couple of years, it is not surprising that they find the need to sort out their invoicing so that they can send invoices and get paid online without hassle.
There are primarily two ways to send your clients an invoice:
- As an attachment
- Using an Online Billing Software
If you plan on sending an invoice as an attachment, you will have to manually draft each invoice and edit the particulars every time you draft one. Furthermore, as you scale up your business and deal with different kinds of clients with different payment timeframes, you will find manual invoicing to be a tedious process. Opt to create an online invoice for free or enter E-Invoices.
What Is An E-Invoice?
An E-Invoice, often used interchangeably with the term ‘digital invoice’ is a digital file with the data in a fixed location. It is created in the supplier’s system or online bank. The most common formats of an E-Invoice are Electronic Data Interchange (EDI) and Universal Business Language (UBL).
In a nutshell, E-Invoices are:
- Structured invoice data issued via Internet-based web forms.
- Structured invoice data issued in EDI or XML formats
What Is A Digital Invoice?
A digital invoice refers to an invoice that you can view and process digitally. You should have no problem archiving it and connecting it to online billing software. In a nutshell, a digital invoice is not an E-Invoice, but:
- Unstructured invoice data in Word or PDF formats
- Scanned, manually generated paper invoices
The Benefits Of E-Invoicing
Chances are you are a business or a freelancer and are on the fence about adopting E-Invoicing to take care of your invoicing and payment needs. What if you could create an invoice online for free? Or streamline and optimize your business? Here are some critical benefits of E-Invoicing that you ought to consider:
Suppliers can enjoy a wide buffet of benefits by adopting the software for estimates and invoices. Here are a few:
As you may have expected, opting for E-Invoicing or online billing software will help you reduce your expenses substantially. These expenses include processing, storing, printing, and delivering paper invoices.
More Accuracy, Fewer Disputes
Disputes in the invoices can cause a massive rift between the supplier and buyer, leading to botched sales and a potentially adverse effect on your future sales. However, with E-Invoicing, the data is transmitted from the supplier’s Accounts Receivable (AR) system to the customer’s Accounts Payable (AP) system, minimizing the margin for error.
In other words, it is more accurate to send invoices and get paid online.
Quick Payment And A Higher Cash Flow
With traditional invoicing, the buyer has to sort out, re-key, and submit the invoices for approval that they get from the supplier, which takes a lot of time. Another issue is that the invoices could be misplaced. However, with online billing software, the invoices are easily accessible, making it easier for buyers to route and get them approved. This also translates to timely payments and an improved cash flow.
Improved Customer Satisfaction
This ties into the point about fewer disputes. Since E-Invoicing is faster and more accurate than traditional invoicing, suppliers can send invoices and get paid faster while retaining their customers.
Here are some benefits that buyers can get out of the software for estimates and invoices or E-Invoicing:
Enhanced Automation And Productivity
As you know, storing and documenting paper and PDF invoices can be a tedious process. Such a process is particularly prone to error. However, online billing software eliminates the need to enter data manually, which means the accounting staff can save heaps of time.
Additionally, E-Invoicing helps the AP departments automate the invoice validations before routing. Since these validations are automated, calculations like the Value Added Tax (VAT), Goods and Services Tax (GST) are correct. The matching of invoices with procurement documents is done quickly.
In a nutshell, the buyer’s staff will rarely have to call the supplier to make inquiries about invoices thanks to the automation of data entry.
Early Payment Discounts
Suppliers generally offer discounts for earlier payees. The software for estimates and invoices enables quick processing, resulting in shorter payment cycles. In other words, if you are a buyer and use E-Invoicing, you can avail a variety of discounts.
Improved Supplier Relationship
E-Invoicing enables fast and efficient payments, which means that buyers can have a healthy relationship with the suppliers, resulting in improved customer experience and satisfaction.
Just like suppliers, buyers can also reduce costs thanks to the reduction of manual data entry, routing, and validation. When you send invoices and get paid online, it can substantially reduce your costs by up to 80%.
Overall Benefits For Suppliers And Buyers
These are the primary benefits of online billing software overall:
- Easy automation
- Reduced costs
- Prevention of errors, losses, and frauds
- Shorter payment cycles
- Minimizing the carbon footprint
- Improved account reconciliation
- Enhanced relationship between supplier and buyer
Challenges Of E-Invoicing
While E-invoicing offers you software for estimatest and invoices, it has its cons. Here are the main ones:
No Standardized Format
Different countries have different domestic E-Invoice formats. However, cross-border invoicing can cause issues. The sender and receiver must use compatible formats to create invoices online for free.
If you are using software for estimates and invoices, chances are you’ve scaled up your business, which means that you have to automate large volumes of invoices. Software providers generally charge a monthly usage fee.
Some Users Prefer Traditional Invoicing Processes
While E-Invoicing is immensely popular today, some users still prefer to go with traditional invoicing, which is why many businesses incorporate both.
In conclusion, the merits of E-Invoicing far outweigh the demerits, which is why you as a business or freelancer must invest in an online billing software like Moon Invoice to handle your invoicing with ease, get paid on time, and improve customer satisfaction.