What is e-invoicing?
E-invoicing is a quick and convenient way to take your invoices (that is, demands for payment) online. It essentially automates the entire process so there’s no need for human intervention along the way. The invoice is generated on the supplier’s side, formatted appropriately and then delivered straight to the buyer’s servers. From here, the buyer’s system can adapt the invoice as needed for the business to progress to approval and payment.
The benefits of online invoices
E-invoicing goes beyond just a classic digital invoice in that it’s an automated process as well as a computer-generated invoice. Of course, both methods eliminate the need for paper waste and make it much easier for teams who are working remotely. Keeping track of a ring-binder full of supplier invoices is hard enough when everyone’s in the office, let alone working from home. It also means that there’s an easily available copy online when an invoice needs to be accessed, making information sharing easier, quicker, and more efficient.
While online invoices also eliminate the need for a physical address for invoices to be sent to, e-invoicing goes one step further by avoiding the need for an email chain. Not only can this be a quicker way of working, but it also makes it easier to keep track of all your invoices.
E-invoicing can cut company costs by eliminating the need for extra admin hours. It also helps eliminate human errors when it comes to formatting and processing. Because the process is consistent and efficient, it can also cut down on time spent chasing payments or dealing with disputes around missed payments.
How to send an electronic invoice
E-invoicing is typically run through specialist accounting platforms. These can often be built to your business’s specifications, so it’s worth consulting with an agency to work out what best suits your needs. Once your system has been set up, you will typically be able to arrange logins for each of your vendors so that they’re able to send you invoices via the platform. Many agencies can also supply instruction manuals that you can pass along to vendors in order to help them navigate your system.
Once the vendor sends an invoice via the online platform, it will be automatically processed by your system. Ordinarily, the vendor will also get a record of the invoice, which makes it easy for everyone to keep track of payments and transactions.
Recordkeeping with online invoices
The nature of e-invoicing platforms makes recordkeeping easier than ever. You can keep a central log of all the invoices you’ve received as well as when they’re paid and what’s still outstanding. This gives you a reliable record of your expenses and debts without needing to spend time or admin hours on putting it together.
Not only does this make your records more accurate and reduce the risk of human error, but it can also provide in-built security as invoices don’t have to pass through potentially insecure email servers. Plus, because copies are automatically sent to vendors, you can be sure that everyone is on the same page when it comes to costs and payments.
Using free invoice software or finding a free invoice generator
While some payment systems will allow for a free trial period or offer a reduced service for those who want to try it out, most will require a subscription or payment. While this may mean increased costs upfront, it can still save you money in the long-term by eliminating admin costs as well as reducing the number of costly errors involved in your invoicing process.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.