Last editedAug 20222 min read
As a contractor, handling invoicing is likely familiar territory. But did you know that automating the process can save you bags of time and help make your invoicing streamlined?
In this post, we’ll take you through the benefits of automated invoicing as well as tips on how you can go about automating your invoicing (hint: it involves software).
What is automated invoicing?
Automated invoicing is a technology that can automatically create and complete outgoing invoices, in addition to checking, sorting and storing incoming invoices. Invoice automation can also match invoice and payments automatically.
In short, automated invoicing involves all the steps of manual invoicing, but is much quicker, more efficient and convenient for businesses.
How to automate invoicing
You can automate invoicing by using accounting and invoicing software, like Xero.
Invoice automation software comes with a variety of different features for handling invoices. Note, however, that not all invoicing software comes with exactly the same range of tools and solutions, so it’s advisable that you find one that offers everything you require personally for your business.
Some examples of invoice automation features include:
Automatic reconciliation - Reconciliation involves matching incoming and outgoing payments with invoice and expenses. It’s an essential aspect of accounting that ensures your records are all in check. With automatic reconciliation, you can save a lot of time manually matching these up, and you can likely do so more accurately too when you take human error out of the equation.
Optical character recognition (OCR) - OCR technology extracts data from images and files and converts it into code for processing. This is especially useful for scanning invoices across different formats, e.g. paper copies, pdfs and image files. It can also be used to scan photographs of receipts for expense tracking.
Recurring invoices - Automation software may also offer features for recurring invoices with frequent clients. This can help you save time creating new invoices on each occasion that you set up a contract with a recurring client.
Machine Learning (ML) - With machine learning, software can use algorithms to learn and adapt. For example, automated invoicing can learn to automatically generate your invoice numbers correctly in the sequence, ensuring there are no repetitions or gaps.
Automatic reminders - Some automated invoicing software offer automated dunning features to chase up on overdue invoices. You can also set up automatic reminders to prevent late payments occurring in the first place. This can be invaluable in helping you get paid on time and recover funds from late payments.
Automatic payments - Automation software can also help you speed up payment collection by providing payment links or the option to set up direct debit payments. Invoicing software Xero can be integrated with GoCardless to facilitate invoice payment collection directly from client bank accounts. As this payment method is pull-based, it puts business owners in greater control of incoming payments and can drastically reduce late payment rates.
The benefits of invoice automation
There are a myriad of benefits to invoice automation when compared to its alternative: manual invoicing. The main benefits you can enjoy include the following:
Save time - invoice automation helps to generate invoices quickly with automatic compliance checking. There are also fewer errors with automation, meaning less time is spent checking and amending mistakes
Get paid quicker - Naturally, the quicker you can generate and send out an invoice, the quicker you’ll get paid. Plus, depending on the software you opt for, you may be able to automatically collect payments — as is the case when using Xero’s integration with GoCardless.
Enhanced productivity - As less of your time will be occupied manually handling invoices, you can spend more time on other tasks. This can have a dramatic impact on productivity.
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.