Electronic invoicing, or e-invoicing, just like the name implies, may be the electronic exchange of invoice documents between a supplier along with the customer. Electronic invoicing goes beyond merely sending a PDF receipt to a customer via email. A genuine e-invoicing solution is an internal solution where an electronic digital invoice is transmitted and received seamless between the supplier's accounts receivable system and the customer's accounts payable system. E-invoicing documents are generally exchanged in EDI or XML formats. (Source: E-Invoicing Basics)
Why switch from your manual, paper-based system to an electronic invoicing system? Paper-based method is notoriously time-consuming and vulnerable to errors. Consequently, paper invoicing will have higher costs and longer processing lifecycles.
Inspite of the widespread adoption of automation for several business processes, accounts payable and a / r processes remain largely manual (Source: Dolphin Corp).
Advantages of E-Invoicing for Suppliers
Switching to e-invoicing solves these complications, resulting in faster processing, lower transaction costs, greater visibility, and significant savings. Coming from a business perspective, e-invoicing delivers many benefits during the entire AR / AP process.
For starters, there is not any mail to sort, distribute, or open. Not just that, e-invoicing eliminates expenses associated with paper bills, envelopes, and postage. Plus, it takes a lot less time to process generate bill payment. Together with the new system, you may create and distribute a whole batch of invoices with a number of clicks. (Source: Pay Simple)
Next, there is not any data entry required. Since the payment arrives in the buyer's accounts payable system automatically, the accounts payable clerk doesn't need to enter the data yourself. E-invoicing eliminates the opportunity for mistakes and ensures accuracy. Likewise, there's no need to scan paper bills, another manual method that needs time and can be vulnerable to errors like illegible scans.
Meanwhile, all invoices are instantly and securely delivered. By reducing mail from your equation, you happen to be also eliminating a couple of days from receipt to payment. Similarly, electronic payments speed the process and mean you don't need to wait in line on the bank to deposit your cash.
Electronic invoices are really simple to store and reference, with no physical file cabinets required. When you contact customers, you can actually incorporate a link or attachment to the original payment receipt, purchase order, or related documentation.
Advantages of E-Invoicing for Buyers
E-invoices offer benefits for your customers too. As an example, it is possible to offer a variety of payment options such as debit, credit, and ACH. Paperless system also paves the way to automated reminders detailed with integrated "pay now" buttons that url to the balance. Your customers' accounts payable team will appreciate devoid of 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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