Electronic invoicing, or e-invoicing, just like the name implies, will be the electronic exchange of invoice documents between a supplier along with the customer. Electronic invoicing surpasses merely sending a PDF receipt to some customer via email. An authentic e-invoicing solution is a solution where an electronic digital invoice is transmitted and received seamless involving the supplier's accounts receivable system as well as the customer's accounts payable system. E-invoicing documents are generally exchanged in EDI or XML formats. (Source: E-Invoicing Basics)
Why switch coming from a manual, paper-based system with an electronic invoicing system? Paper-based system is notoriously time-consuming and vulnerable to errors. Therefore, paper invoicing tends to have higher costs and longer processing lifecycles.
Despite the widespread adoption of automation for most 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 delivers advantages through the entire AR / AP process.
First off, there is no mail to sort, distribute, or open. Not only this, e-invoicing eliminates costs associated with paper bills, envelopes, and postage. Plus, it requires significantly less time for you to process generate bill payment. With all the new system, you may create and distribute an entire batch of invoices with a few clicks. (Source: Pay Simple)
Next, there's no data entry required. Considering that the payment arrives in the buyer's accounts payable system automatically, the accounts payable clerk does not need to enter in the data by hand. E-invoicing eliminates the opportunity for mistakes and ensures accuracy. Likewise, there's no need to scan paper bills, another manual procedure that takes time and could be at risk of errors such as illegible scans.
Meanwhile, all invoices are instantly and securely delivered. By reduction of mail through the equation, you are also eliminating a couple of days from receipt to payment. Similarly, electronic payments speed the task and mean you don't need to wait at the bank to deposit your dollars.
Electronic invoices are really easy to store and reference, without having physical file cabinets required. While you telephone customers, you can easily will include a link or attachment for the original payment receipt, purchase order, or related documentation.
Advantages of E-Invoicing for Buyers
E-invoices offer benefits on your customers also. For instance, you can give a selection of payment options like debit, credit, and ACH. Paperless system also opens the door to automated reminders detailed with integrated "pay now" buttons that hyperlink to the bill. 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 expense, a win-win for both sides.
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