Last editedApr 20233 min read
No matter your business size or industry, it’s always important to find new strategies for saving time and money. Online invoicing makes the billing process more efficient for businesses and customers alike. We’ll cover the benefits of taking online invoice payments in this article to help you decide if this system is right for you.
What is an online invoice payment?
An invoice is a demand for payment sent from the seller to the buyer after a sale has taken place. It provides an outline of the goods or services provided along with their cost and payment due date. Traditionally, invoices were paid with paper checks which is a time-consuming payment process.
An online invoice payment offers a way to pay for goods and services electronically. These types of online payment include bank transfers, direct debit payments, credit and debit card payments, payment links, or even QR codes redirecting to an online payments page. Today, businesses have access to a wide range of accounting, invoicing, and billing software that makes it easy to accept online invoice payments.
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What are the benefits of online invoicing and payments?
Providing customers with the option of online invoicing offers an array of benefits on both sides. Here are just a few to consider.
1. Faster payment settlements.
With online invoicing, you can automatically send invoices to your customers as soon as a project is complete. Customers can then pay online instantly, speeding up the entire accounts payable and receivable process. With online payments, customers can pay at any time of day or night. This improves cash flow while reducing late payments.
2. Reduction in costs.
Manual invoice processing costs money. Not only do your employees need to create, send, and chase up each invoice, but you also must pay for postage and processing fees. With online invoice payments, a good percentage of these costs are eliminated.
3. More efficient cross-border sales.
Businesses can take payments from anywhere in the world through online payment gateways. You can open the doors to a global audience using online payment processing. Cloud-based invoicing platforms adjust languages and preferred currencies as needed. However, be sure to factor shipping costs into your budget.
4. Automatic bank reconciliation.
Automating the invoicing process makes accounting more efficient. One example is account reconciliation, which is the process of matching invoice and purchase order documents to incoming payments. With online invoicing software, the process is automated. This also reduces the chances of human error which can damage client relationships and even lead to tax troubles down the road.
5. Improvement in payment security.
Cash can be lost, and checks go missing in the mail. Online payments are verified instantly by the customer’s bank or card issuer, and payment gateways are held to strict PCI DSS compliance standards. Storing invoices in the cloud means you don’t have to worry about losing client details, with all important data backed up automatically.
What are the challenges of online invoice payments?
It’s clear that there are plentiful benefits of accepting invoice payments online. Yet as with any payment solution there are a few challenges and risks. A good online invoicing system is secure, but what happens when the cloud-based system goes down due to technical issues? While infrequent, any technology is prone to occasional downtime. You can address this with a customer support contact listed on each invoice you send, so that clients can still get in touch when the system isn’t working for payment.
Cybersecurity is also a challenge for online invoice payment processing. As you compare your service providers, be sure to choose one that uses the latest encryption tools and remains on top of regular software updates.
How to get started with online invoice payment processing
If you’re sold on the benefits of allowing online invoice payments, the next step is to choose online invoicing software. There are plenty of options out there, from full-service payment processors to accounting software combined with billing platforms.
GoCardless integrates with over 300 partners, including top accounting and invoicing software including Xero and Chargebee. It allows you to accept recurring invoice payments using the ACH debit system, which takes a matter of minutes to set up. You can also use GoCardless to collect one-off invoice payments, with the business controlling all payment amounts and dates. It’s fast, secure, and easy to set up.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.