Invoicing is the activity of charging the customer for the goods and services they acquired. It plays a critical part in the business as it creates evidence of the sale and demonstrates the customer’s obligation to pay.
The enterprise issues the invoice upon completing the customer’s order, typically after the delivery. Invoices are traditionally created through a word processor and then emailed or printed for posting. Upon receipt, the customer company then manually enters the data into their bookkeeping system before making payment.
But with the movement of businesses online, the invoicing process is also completed now through a paperless and electronic method. An electronic invoicing is a form of billing that streamlines invoice management through paperless and system-to-system invoice delivery.
E-invoicing is a way for businesses to exchange invoices directly from one business accounting software to another. Since it is system-to-system, it removes manual data entry and expedites the billing process. Moreover, it uses an integrated electronic solution that allows not just the processing of invoices but also of credit and debit notes in the digital format between the buyer and seller companies. Businesses using e-invoicing programs typically also have the ability to pay their bills online.
Implementing an e-invoicing system helps the business speed up its billing and payment transactions. Here are some of the advantages of using e-invoicing.
Changing from traditional to e-invoicing removes human intervention and therefore decreases the likelihood of human error. Less manual input reduces chances of omissions, transpositions, duplication, and commission in the company books. Additionally, implementing e-invoicing minimizes the possibility of the invoices getting lost in transit.
Business owners understand the importance of keeping their books accurate. E-invoicing’s standard format and fields ensure that the data exchanged from the seller’s system to the buyer’s system is correct and error-free. This translates into having more visibility in the sales and inflows of the company, as the records fairly represent what transpired during the period.
Electronic invoicing speeds up payment as it reduces the processing steps. It arrives as a pre-populated bill and just needs the approval to execute the payment. From the seller’s point of view, this means that the conversion from accounts receivable to cash is much faster. Meanwhile, from the buyer’s side, the program makes keeping track of bills and scheduling of payments is easier.
Cash Flow Monitoring
Since it automates the billing function, administrators can better focus on cash flows monitoring, analyzing, and strategizing. It eliminates repetitive non-critical tasks and allows the company to focus on financial activities that matter more.
Reduced Administrative Costs
In e-invoicing, the computer is the one that receives and records the invoice in the books. Therefore, the company can reduce staffing while improving the quality of records and operations.
KIPPIN Invoicing for Small Businesses
KIPPIN is a cloud-based accounting, bookkeeping, and invoicing service tailored to simplify the everyday tasks of businesses. We align our clients to top financial experts on our platform to take care of all your accounting and invoicing needs. We also provide cloud accounting and invoice maker software-only solutions to automate business processes for small and medium businesses.