Are you wondering what electronic invoicing (e-invoicing) is and how it can help your business?
Keep reading, you’re in the right place.
Electronic invoicing is one of the latest digital processes taking the procurement industry by storm. It’s an excellent way for sellers to invoice buyers without the additional hassles involved in manual invoicing.
E-invoicing streamlines operations cutting down on the work involved in the creation of invoices, and also on time.
Electronic invoicing permits sellers to easily convert purchase orders into invoices making this digital process very useful.
Sellers who use e-invoicing have a competitive advantage over those that don’t. But before we take a look at the benefits of e-invoices and how they work, let’s go back to some basics.
What is Electronic Invoicing?
Electronic invoicing, often shortened to e-invoicing, is a process whereby invoice documentation is sent by the seller to the buyer via a digital platform.
Invoices are digitally issued, sent, received, processed, and finally stored in electronic format.
In practice, electronic invoices are sent by vendors to buyers within a dedicated procurement solution suite.
However, we must put a disclaimer: not every digital invoice is an electronic invoice.
So how can you tell what’s an e-invoice and what’s not?
What Documents Don’t Qualify as E-Invoices?
Electronic invoices come in all sorts of digital formats. However, not every digital invoice constitutes an e-invoice. To give an example of invoices that don’t quite make it under the category of ‘e-invoices’ we have:
Paper invoices
Paper invoices, as the name suggests, are invoices that are physically printed out and sometimes even handwritten. They are not considered e-invoices because their origin is not electronic.
PDF invoices
PDF invoices also do not make the cut even though they are technically sent electronically. PDFs are disqualified by their very nature because they cannot be automatically processed.
Now, let’s take a look at some of the manifold benefits of e-invoicing.
The Benefits of E-Invoicing
Making the switch from traditional invoicing to digital invoicing will promote cost savings, encourage higher ROI, and reduce human error. Here are other benefits you can look forward to:
Secure Document Storage
Gone are the days of lost and intercepted invoices. Today, you can take advantage of file encryption to securely issue, transmit, and store your electronic invoices.
Real-Time Processing
Invoices don’t get held up in the mail any longer. Deliveries are instantaneous and processing by the buyer’s accounts payable department can begin as soon as the invoice has been received.
Learn more about What is accounts payable? What is the process and what is included?
Improved Cash Flow
Cash flow is imperative in business and delayed invoice processing can put a strain on your affairs. Research shows us that sending invoices manually and having this invoice clear can take up to 3 full weeks. No one wants this. Automate the process and have your invoices clearing in as little as 3 days!
Legally Compliant
We’re all familiar with the stress that accompanies tax season. Thankfully, with digital invoices, retrieval is easy. E-invoicing will help both the buyer and vendor teams remain compliant.
Error-Free Invoices
Because electronic invoices can be generated from purchase orders, there is a decreased chance of error. This results in lower discrepancies and shorter invoice cycle times.
Eco-Friendly Process
Paper invoices bring with them the stigma associated with tree-cutting. That’s now a thing of the past thanks to digital invoicing. By simply choosing to issue electronic invoices enterprises can significantly cut back on their CO2 emissions thereby helping to position them as an environmentally friendly brand.
Remote Work Accessible
In a world that’s fast seeing more and more people work remotely, it’s key for employees to have access to work documents from wherever they may be working from. E-invoicing gives teams the flexibility to attend to invoice processing regardless of where they may be.
Easily Track Invoices
Tracking documents can be laborious and cumbersome especially when you have a large number of vendors that you interact with regularly. E-invoicing ensures all invoices are kept in one single repository which is easily accessible by authorized parties.
Conclusion
Digital transformation is rapidly changing the world of procurement as we know it. E-invoicing alongside these four key areas for digital transformation in procurement is set to significantly improve the accounts payable process for both buyers and sellers.
And fortunately, Chief Procurement Officers, their procurement teams, and suppliers don’t have to look for when searching for reliable and efficient procurement solutions.
ProcurePort prides itself on being one of the leading providers of the best procurement software on the market and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
If you would like to discuss procurement software with a consultant or to schedule a demo of our solutions contact us today.