Electronic invoicing, or e-invoicing, such as the name implies, will be the electronic exchange of invoice documents between a supplier and also the customer. Electronic invoicing surpasses merely sending a PDF receipt to a customer via email. An authentic e-invoicing solution is an internal solution where an electronic invoice is transmitted and received seamless relating to the supplier's accounts receivable system and the customer's accounts payable system. E-invoicing documents are normally exchanged in EDI or XML formats. (Source: E-Invoicing Basics)
Why switch from your manual, paper-based system to a electronic invoicing system? Paper-based strategy is notoriously time-consuming and at risk of errors. As such, paper invoicing is likely to have higher costs and longer processing lifecycles.
Regardless of the widespread adoption of automation for a lot of 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 issues, causing faster processing, lower transaction costs, greater visibility, and significant savings. From the business perspective, e-invoicing delivers advantages throughout the AR / AP process.
For starters, there isn't any mail to sort, distribute, or open. In addition to that, e-invoicing eliminates costs associated with paper bills, envelopes, and postage. Plus, it takes a lot less time for you to process generate bill payment. With the new system, you may create and distribute a full batch of invoices with only several clicks. (Source: Pay Simple)
Next, there's no data entry required. Since payment arrives in the buyer's accounts payable system automatically, the accounts payable clerk need not enter the data yourself. E-invoicing eliminates the potential for mistakes and ensures accuracy. Likewise, there's no need to scan paper bills, another manual process that will take time and is at risk of errors like illegible scans.
Meanwhile, all invoices are instantly and securely delivered. By reduction of mail from your equation, you're also eliminating several days from receipt to payment. Similarly, electronic payments speed the procedure and mean you won't need to wait with the bank to deposit your cash.
Electronic invoices are easy to store and reference, without physical file cabinets required. While you phone customers, you can easily incorporate a link or attachment towards the original payment receipt, purchase order, or related documentation.
Advantages of E-Invoicing for Buyers
E-invoices offer benefits on your customers as well. As an example, it is possible to give you a variety of payment options for example debit, credit, and ACH. Paperless system also opens the door to automated reminders filled with integrated "pay now" buttons that connect to into your market. Your customers' accounts payable team will appreciate not having to manually enter data or scan paper bill, too.
Switching to e-invoicing saves time and cash, a win-win both for sides.
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