Last editedFeb 20232 min read
Businesses have been using invoicing to collect payments for years and years. It’s a simple concept: just keep a record of the products or services that you have provided, and submit a written request for payment for these when it is required. However, as with all other domains of the business world, this process is evolving into the more technologically advanced e-invoicing. So what is an e-invoice, exactly?
In short, e-invoicing just means that the billing is presented to the buyer electronically rather than through paper. This might be issued through an Electronic Data Interchange (EDI) or XML format, or perhaps through standard web forms.
Many businesses are making the switch to e-invoices to save both time and money. What’s more, the integration capabilities can streamline other areas of your business. Keep reading to find out more about e-invoicing and how to generate e-invoices.
How does e-invoicing work?
As previously mentioned, e-invoicing is the process of billing customers digitally rather than in-person or through mail. It must be issued electronically. and include structured data that can be read by a machine - it’s not enough to simply create a PDF or take a picture of a paper invoice.
E-invoicing is not a new concept, in fact it has been around for several decades in both XML formats and electronic data interchange. Nowadays, most people wondering how to make an e-invoice turn to e-invoicing software to make this process easier. These solutions allow businesses and customers to submit and access invoice data through e-mail or an online portal. Often, these portals also allow customers to make payments.
The growth of e-invoicing
As with many different business processes, invoicing has been made much easier and more convenient with the growth of technology. More and more businesses are opting for e-invoicing solutions rather than sticking to manual invoicing. This can cut down on costs and leave employees free to focus on other areas, improving growth and productivity.
GoCardless can offer unique benefits to businesses, with simple-to-use e-invoicing solutions that put you in charge of your payments. After a quick, one-time setup, you will be able to automatically collect payments from customers on the due date. Since this is a pull-based system, you don’t have to rely on customers remembering to make the payment in time.
GoCardless reduces the risk of late payments and leaves you free to focus on other areas of your business, rather than spending time chasing up late invoices.
Benefits of e-invoicing
After asking “how does e-invoicing work?”, most businesses then want to know why they should move to this system. There are a number of different benefits:
Remove manual processes
E-invoicing removes labor costs and saves both you and your employees time, leaving you free to focus on other tasks.
With e-invoicing software, the entire process is streamlined and the margin for error is much smaller. A job that might have taken several hours can be accomplished in mere seconds with e-invoicing.
Integration with other systems
You can integrate your e-invoicing solutions with other systems such as your accounting software, meaning all your data is automatically synced up.
E-invoices arrive to your customers much faster than traditional paper ones, and payments can be made much quicker online, meaning you’re more likely to be paid on time.
How can GoCardless help with e-invoicing solutions?
The benefits of e-invoicing are all offered by GoCardless online invoicing software. You can also achieve seamless integration with other software, such as accounting partners Xero, making your business processes more efficient.
GoCardless automates the invoicing process through ACH debit, which speeds up your payments. What’s more, Success+ payment intelligence automatically re-attempts payment collection when it fails, greatly reducing the number of missed payments.
Customers will also save time and unnecessary stress, since they won’t have to manually make payments. After a simple, one-time set-up, payments will automatically be collected on their due date.