Electronic invoicing, or e-invoicing, such as the name implies, is the electronic exchange of invoice documents from your supplier and the customer. Electronic invoicing surpasses merely sending a PDF receipt with a customer via email. A real e-invoicing option is an integrated solution where a digital invoice is transmitted and received seamless between the supplier's a / r system as well as the customer's accounts payable system. E-invoicing documents are usually exchanged in EDI or XML formats. (Source: E-Invoicing Basics)
Why switch from the manual, paper-based system to a electronic invoicing system? Paper-based system is notoriously time-consuming and vulnerable to errors. As a result, paper invoicing tends to have higher costs and longer processing lifecycles.
In spite of the widespread adoption of automation for most 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 problems, leading to faster processing, lower transaction costs, greater visibility, and significant savings. Coming from a business perspective, e-invoicing delivers benefits through the entire AR / AP process.
First of all, there isn't any mail to sort, distribute, or open. In addition to that, e-invoicing eliminates expenses associated with paper bills, envelopes, and postage. Plus, it takes much less time for you to process generate bill payment. With the new system, you can create and distribute an entire batch of invoices with just a few clicks. (Source: Pay Simple)
Next, there is not any data entry required. Since payment arrives in the buyer's accounts payable system automatically, the accounts payable clerk does not need to type in the data manually. E-invoicing eliminates the chance of mistakes and ensures accuracy. Likewise, you needn't scan paper bills, another manual procedure that will take time and can be prone to errors such as illegible scans.
Meanwhile, all invoices are instantly and securely delivered. Through the elimination of mail from your equation, you happen to be also eliminating a couple of days from receipt to payment. Similarly, electronic payments speed the method and mean you don't need to wait with the bank to deposit your cash.
Electronic invoices are easy to store and reference, without physical file cabinets required. Because you phone customers, it is simple to add a link or attachment towards the original payment receipt, purchase order, or related documentation.
Advantages of~conveniences of E-Invoicing for Buyers
E-invoices offer benefits to your customers too. For example, you can give a various payment options such as debit, credit, and ACH. Paperless system also opens the door to automated reminders filled with integrated "pay now" buttons that link to the balance. Your customers' accounts payable team will appreciate lacking to manually enter data or scan paper bill, too.
Switching to e-invoicing saves time and expense, a win-win either way sides.
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