Electronic invoicing (or e-invoicing) is the exchange of an invoice document between trading partners, such as a business and its supplier, in an integrated electronic format. Simply put, instead of posting a traditional paper invoice to a customer, an e-invoice can be sent directly from your accounts payable system electronically.
The process called to make an invoice in online. It includes many different technologies and data capture options, and is essentially referred to as a concept to describe any method by which an invoice is electronically transmitted.
At its most basic form, an e-invoice could be a PDF version of an invoice document which is emailed to a client for payment, and the data is then captured by software.
At more complex levels, e-invoicing is part of fully integrated invoicing software and other business systems between businesses and clients without any human intervention in an end-to-end electronic process.
Traditional invoicing, like most paper-intensive processes, it has a number of drawbacks. It is manually intensive, prone to human error, and the source of significant costs due to inefficiencies. Removing the human element of the invoicing process can lead to significant savings.
E-invoicing offers considerable cost savings, mostly due to increased efficiencies due to ridding themselves of costs inherent with manual and time-consuming tasks such as printing, filing forms, filing envelopes, mailing, scanning, data entry and archiving. This is especially true of companies with a high volume of invoices that can be overwhelmed with paper invoices and other forms.
Some research suggests companies will save up to 80 percent in invoicing costs simply from gains in efficiency.
Beyond the cost savings through improved efficiency, the other benefits of e-invoicing include reduced errors, faster dispute resolution, fewer unpaid and lost invoices, improved customer service and better customer retention.
Business can also factor in the cost benefit of time, as employees will be freed up for initiatives other than producing invoices in free online invoice software.
As the digital era rolled in, companies began rapidly moving to e-invoicing. By 2012, 73% of businesses were using electronic invoicing to some extent. Today, nearly the same number use online billing software.
With that benefit alone taken into account, invoice automation software can save companies roughly 80% of the their current invoice management costs.
Other benefits include:
- increased ability to analyze spending
- faster payment cycles
- better ability to analyze contract performance
- enhanced tracking
- ease in dispute mitigation
- opportunity to find more supplier discounts and rebates
- overall better auditability `
- ease of access to data
- green approach in reduction of paper use