Invoicing is a constant struggle, particularly for small businesses – and your company is likely no exception. Just how much time do you spend chasing payments or generating documents for clients? Sure, you do all of this to get paid, but these are tasks that can easily shift toward greater automation. By switching to e-invoicing, your business can improve your payment process in these 4 ways, enhancing efficiency and helping you get back to the work you’re passionate about.
No More Late Payments
One of the biggest challenges that small businesses face when using conventional invoicing practices is late payment. Invoices get lost in the shuffle or aren’t convenient to pay; clients may even claim never to have received them. Despite this, 70% of global invoices are still paper-based.
By encouraging your accounts payable department to shift to invoicing, you make it more likely that clients will pay on time, helping to stabilize your business’ cash flow and helping you stay current on your financial obligations. Big corporations may have big pockets that allow them to wait for payments, but small businesses simply don’t have access to those reserves.
Data At The Ready
Another advantage of switching to electronic invoicing is that the process is made for the age of big data. E-invoices can automatically record receipts and, depending on the program, even populate other systems with those values – just be sure to emphasize cross-compatibility.
Electronic invoicing isn’t just for organizing your financial data; it’s also designed to handle more advanced analytics. Why should accounts payable spend all their time doing basic numerical manipulations when e-invoicing lets them evaluate the resulting data, identifying problems in the payment funnels, areas where your business could increase profit margins, and more?
Increased Payment Options
In addition to the fact that clients have a tendency to misplace or forget about paper invoices, one reason that paper invoices are often paid late is that they can only be paid in a limited number of ways. At a time when no one wants to write a check, or even track down a credit card to write down the number and return the information, e-invoicing makes the process more efficient by increasing the ways that customers can pay their bill. That might mean offering various payment portals, simplified automation for repeating invoices, and in a few cases, the ability to pay using cryptocurrency.
Be Proactive, Not Reactive
Ultimately, when you rely on paper invoices, most of your actions are reactive – you note that you haven’t been paid and you spend valuable time calling those clients and trying to get them to pay the bill, or generating new invoices and sending them again. It’s not a good use of your time and it’s a waste of money.
When you shift to e-invoicing, though, you take a proactive stance towards payment. Your payment system can determine when an invoice went out, whether it’s been paid, and generate and send new invoices if they haven’t, or send out receipts as payments arrive. It’s just better time and money management.
Paper invoicing may still dominate invoicing practices, but it seems likely that it will be phased out over the next several years. Like fax machines, paper documents will be reserved for only particularly sensitive forms of communication, while standard exchanges will be born digital. Businesses that fail to make the shift now will simply have to do so in a few years if they manage to hobble along until then on their uneven cashflow.
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