To understand the details of e-invoicing, it is important to understand the fundamental invoice processes. An invoice is a document sent to buyers for the cost of purchasing a product or service. This document helps to track accounts and establishes an obligation of the buyer to pay the balance. While an invoice might seem like a bill, the difference lies in the information they contain.
While bills are usually generic and don’t include much information on the transaction or the customer, invoices are much more specific. Since invoices are legal documents used for tax and accounting purposes, they provide detailed information on both involved parties.
With enhanced technology and businesses digitizing their processes, companies have been embracing electronic invoicing. Electronic invoicing (e-invoicing) moves the traditional use of invoices from paper to a digital format. As the world becomes more connected, using e-invoicing helps companies to stay on top of their cash flow and collaborate with their buyers regardless of location.
Paper invoices are time-intensive. Research has found that the cycle time for the processing of paper invoices can take up to 22 days. Businesses using paper invoices will discover that a large amount of time is spent handling and entering data. Depending on the organization’s size, there can be thousands of invoices being sent around at any given time. This workload can quickly stack up with every invoice needing to be validated and cross-referenced with purchase orders.
The chance of error is significantly increased when using paper invoices. Since paper invoices need to be shipped or mailed, there is the possibility of invoices being lost or delivered to the wrong location. In addition to the challenges mail poses, there is the possibility for human error when entering and filing previous invoices. Without a consolidated system, confusion can occur through your communication lines. Organizations who use paper invoice systems have seen mistakes such as:
Let’s face it; paper is easy to lose. Rather than spending their time monitoring invoices and tracking down payments, your accounts payable team will spend their time and effort searching for misplaced invoices. When customers call to inquire about the status of their invoice, it can be challenging for accounts payable staff to track down the specific invoice. Without digital assistance, your AP department will find it difficult to reassure executives and customers on the status of payments.
As organizations highlight the weak spots in their invoicing process, the need for adopting technology into your supply chain becomes apparent. E-invoicing provides the support and tools necessary to transform the efficiency of your system.
Using technology to record and track invoices saves your AP department a great deal of time. Without having to manually enter data and file invoices by hand, a digital platform and the use of e-invoicing make storing previous payment records easier and allows for historical data that is accessible at any point in time.
Since invoices can be sent instantly and directly to the customer when using e-invoices, the possibility of misplacing or losing invoices is greatly reduced. The built-in digital paper trail makes tracking each invoice’s progress efficient and allows for stronger communication between all involved parties. Additionally, the automated system handles the collection and analysis of the data, leading to a much more reliable process.
A robust e-invoicing system collaborates with the other tools and technology your organization uses to support your AP and supply chain processes. This allows for total automation, meaning that returning customers do not have to go through manually creating invoices repeatedly. Organizations can more easily sort and keep track of their records, and often, organizations will find that they can receive payments much faster. Offering customers the ability to pay invoices instantly and online may encourage customers to pay you faster.
E-invoices solve the issue of using multiple channels of communication for payments and collaboration with customers. A consolidated system leads to higher confidence in your supply chains and transactions and increased transparency in your operations.Check out our guide to start e-invoicing in your organization
Look for adaptive supplier onboarding solutions so sellers immediately see value in the transaction. Choose a solution that provides yours suppliers with information on their buyers so that personalized communication and invoice tracking can occur instantly. Look for built-in programs that simplify the onboarding process, automating account notes, and payment processing.
Choose a solution that allows users to gain insight into targeted and actionable data. Look to gain access to real-time trends and data, increasing your ability to make informed decisions and navigate through times of disruption. This increased visibility into your data can help you remain resilient when future disruption occurs.
When businesses operate in a global market, it can be challenging to ensure compliance across countries. This means that organizations using e-invoicing need to ensure that they are complying with dozens of regulations
Organization needs the comfort and support of strong technology to navigate disruption. Through the use of our customizable software, we are equipped to provide you with the specific support your team needs. In addition to assisting with e-invoicing, our digital network of business professionals enables you to strengthen your relationship with customers, leading to heightened transparency in communication and payment processes.
As the leading supplier of supply chain B2B payments and marketplaces, Tradeshift’s robust software processes millions of payments every day. Our expansive portfolio of clients showcases our commitment to creating an award-winning and user-friendly program.
As a leading supplier of B2B marketplace and network solutions, Tradeshift enables suppliers and buyers to connect more quickly and process payments in record time. For more information regarding our e-invoicing options and how they can transform your traditional processes, reach out to one of our experts. If you’re ready to shift your organization to a digital format, sign up now for your free demo.