10 reasons why e-invoicing is good for your cash flow
We are living in an increasingly digital world. So, it’s perhaps not surprising that many business owners are reducing their reliance on paper and manual processing and implementing automated strategies to improve efficiency.
But did you know that transitioning to a digital invoicing system could improve your cash flow too?
Here are 10 reasons why e-invoicing is good for your cash flow. Could you benefit from making the switch?
1. Save money
Whilst implementing an automated strategy may come with additional service costs, sending invoices by email rather than post will remove printing, postage and filing expenses. It will also reduce the manpower required to complete the task so your team’s time and resources can be better spent, therefore saving further money for the business.
2. Get paid faster
You can significantly improve processing times by creating and distributing invoices electronically. By avoiding the need to print, post and process hard copies, invoices will get to where they need to be quicker and are therefore more likely to be paid faster.
3. Easily review sales ledger
A digital invoicing system will provide a centralised view of incomings and outgoings so that your accounts department can keep a closer eye on your sales ledger and cash flow. This will allow you to spot when a cash flow shortage may be approaching so that you can take the steps to minimise the impact on your business.
4. Make it easier for your customers to pay
E-invoicing has been known to enhance customer relationships as it is often more convenient. This is especially true if the customer is given the ability to pay as part of the same process. By making it easier for your customer to make payment you will significantly reduce the chances of late payment. Customers are also likely to appreciate the convenience of the process and it could even improve customer loyalty.
This blog post has more tips on how to make it easier for your customer to pay.
5. Increase productivity
Manually processing invoices is extremely inefficient. By implementing an automated process you can improve productivity and free up time to focus on other activities. Also, with cloud solutions available you can even submit and approve invoices on the go. All you need is a mobile and internet access.
6. Reduce chances of late payment
By implementing end-to-end automation in your invoicing process, you can simplify and streamline your procedure to reduce the chances of late payment. For example, you can schedule invoices to be sent out on a particular date to remove any delays from the process.
7. Avoid common late payment excuses
Fed up of hearing that your customer didn’t receive their invoice? Implementing an e-invoice system could make this an excuse of the past. Some systems enable you to see when an email has been received and opened so that you no longer have to worry that a letter hasn’t arrived. However, even with this reassurance, you should still put in a courtesy call to confirm receipt and your payment terms. And, in the event this call reveals that an invoice has gone astray, sending a duplicate by email will be much quicker than posting it, which will improve payment times.
8. Reduce chances of disputes
Invoice disputes can significantly prolong the wait for payment but by minimising errors at the outset you can reduce the risk and costs of disputes. Automating your invoicing process and using automatic data extraction can reduce the chances of manual input errors so that you are less likely to receive queries and waste time resolving them.
9. Resolve disputes easier
If you still find yourself with an invoice dispute, keeping a digital record of all invoices, supporting documents and communication through your e-invoicing system will enable you to resolve the matter faster. With large amounts of paper and documents circulating it can often be difficult to find the necessary paperwork to support your argument. But, with easy access to all communications in one place, you will be able to easily see your correspondence and resolve disputes. Plus, if the case reaches court you will have easy access to all the necessary documents to support your case and increase your chances of success.
10. Qualify for prompt payment discounts
Faster processing of invoices and improved payment times could help you to qualify for prompt payment discounts from your own suppliers. Early settlement discounts are a great incentive as they reward prompt payment with a small discount. This can save your company money which can be better spent elsewhere.