With more and more companies relying less on location and more on working remotely, E-invoicing adoption is booming. By adopting an E-invoicing policy, you can make your business run more efficiently and be more reliable and flexible for your customers.
If you are wondering why adopting E-invoicing is crucial in 2021, the answer is simple. Online invoicing can streamline your processes and cut down costs by up to 80%. With digital invoicing solutions, you don’t have to waste money on printing machines, ink, or paper anymore. Continue reading to find out how E-invoicing can benefit your business in 2021 and beyond.
What does E-invoicing mean for businesses?
Electronic invoices, or E-invoices, are not a new concept, as they have been around for approximately three decades. They are invoices issued, received, processed, and stored electronically and without the need of a hard copy. In order for an invoice to be an electronic one, it needs to be digital throughout the entire lifecycle of the document, from issuance to archiving.
It’s essential to keep in mind that not all digital invoices are e-invoices. For example, PDF invoices, which are typically sent by email, are not classified as E-invoices because they can’t be processed automatically. The same goes for paper invoices that are converted to a digital format.
The digitalization of invoices is gaining traction every year, and the biggest driver of E-invoicing is the government in many countries, especially those in the European Union. By 2020, 24 of the countries had implemented a business to government E-invoicing solution. They offer E-invoices to suppliers and often require E-invoicing solutions from them at the same time.
There are many benefits for businesses that adopt E-invoicing, with the main advantage being in the cost savings potential that the switch can bring to companies. The use of E-invoices shortens the time from issuance to payment, which increases the liquidity of the supplier while also improving the customer’s chances to meet the requirements for a trade discount that was previously agreed upon.
Below you will find the most important reasons to adopt E-invoices for businesses of all sizes.
Top reasons to adopt E-invoicing for your business
1. Cut down on administrative costs
Administrative costs and processing time for electronic documents are far lower than for traditional paper documents. Many companies have found that the rise of digital frontiers and globalization led to an increased need to make customer relationships more efficient and leverage technology to smoothen compliance.
Printing hard copies of invoices cost a lot of money and is actually one of the biggest monthly administrative expenses for many small businesses. To print invoices, you need to buy expensive printing machines and consumables such as paper and ink.
By using an affordable online platform for E-invoicing, you can stop wasting money and reduce costs. If you use hard copies of invoices, you also need to think about storage, which can cost quite a lot if you need to keep lots of invoices on-site. Instead of spending all that money on administrative costs and invoicing consumables, you can use them to expand your business instead.
2. Reduce admin time
Besides the costs associated with hardcopy invoices, you also need to think about the time you or your employees spend on processing those-invoices. This is often a manual process that takes time for both you and your customers.
By adopting E-invoicing, you and your team can spend less time on admin tasks and focus on revenue-generating activities instead to bring more value to the business and your customers.
3. Facilitate cross-border business
More and more countries around the world have started accepting E-invoicing as a best practice standard, which makes global accessibility another benefit of adopting E-invoices. This practice has the potential to create a secure and fast way to do business with customers around the world.
For example, all public sector entities in EU countries adopted E-invoices processes and accept them from all their suppliers as of April 2019. In the United States, large and small corporations have also started to adopt E-invoicing, and there are approximately 250 e-invoice service providers currently operated on the American market.
4. Reduce mistakes
Businesses that minimize manual input and adopt processes that increase automation can easily reduce the number of mistakes and titles. You also don’t have to worry about things like your invoice getting lost in the mail.
Many online platforms for E-invoicing automatically feel in certain fields on the invoice, so you don’t have to do it every time. For example, you can load all your customer information into the system, and then the platform will automatically pull personal information on each invoice, thus eliminating the chance of errors.
5. Keep track of invoices with ease
When you use E-invoicing solutions, you know when an invoice has been sent, reviewed, and paid. Depending on the service provider you use, you may also be able to see when the customer has viewed your invoice.
Because e-invoices can reach your customer quickly, you will get paid faster. It’s also worth keeping in mind that producing an electronic invoice demands less effort and time, so customers are likely to pay them quickly for that reason.
Digital invoicing platforms also offer businesses access to data analytics, so you can easily monitor your account and see what invoices still need to be paid at a glance. Most platforms allow you to sort invoices by status, which is an easy way to see which of your clients have outstanding accounts.
6. Use templates to customize your invoices
Whether you want to add your logo to your invoices for clients to immediately recognize your branding or want a quick way to make invoice templates, so you don’t have to do the same work over and over again, E-invoicing platforms typically offer highly customizable invoice templates so you can change everything from the branding to the colors and headers.
Invoice templates with different layouts are an excellent solution if you want to streamline your documents in order to make them easier to read and understand. It’s also easy to create multiple types of templates for different products and services or different categories of clients.
7. Keep track of your finances for tax time
By adopting E-invoicing, you can easily keep track of all the money coming into the business, which comes in handy at tax time. Besides, you can also see whether you are making a profit or running at a loss, so you can use the data to make future financial decisions.
8. Feel more secure with controlled visibility and data encryption
Adopting E-invoicing allows you to implement an encrypted and instant exchange between targeted parties. This means that you will be able to reduce many of the process risks that are associated with human error and manual input.
Moreover, secure data encryption means that you can expect enhanced processing control and transparency. You will know at all times who has access to your business-critical transactional data.
9. Improve business relationships
Many small businesses decide to adopt E-invoicing after getting the request from a supplier or customer to send or receive electronic paperwork. With more and more organizations, including governmental ones, seeking ways to establish digital connections with their business partners, you don’t want to miss out.
By adopting E-invoicing and connecting digitally with your customers and suppliers, you gain more visibility and control over the process, which results in reliable long-term business relationships.