These days, many companies are looking for ways to streamline their business processes and eliminate any inefficiency. One such way is the drive towards a paperless office, especially in procurement and accounts payable departments.
One such way is to introduce automated processes that can take care of those time and labor-intensive tasks, such as data entry. If you run a company that generates paper invoices to your customers and then has to send them out in the post, you will probably benefit the most from electronic invoicing.
What Is Electronic Invoicing?
In a nutshell, electronic invoicing is the process of a supplier electronically sending an invoice to a buyer using a predetermined data format. It is great money and time-saving way to submit and receive invoices for the business of any size, and if you’re not entirely convinced that you should be embracing e-invoicing for your business, here are 6 reasons why you should!
1. Automated Invoice Capture
Instead of having to manually scan invoices into your accounts system or upload PDF invoices and then use something like OCR (optical character recognition) to extract the important elements of the invoice, an electronic invoicing system enables companies to quickly and easily receive invoices from suppliers in the format they require.
2. Automated Invoice Validation
Buyers or those in accounts payable departments would normally have to spend time manually validating line items in an invoice to check for any mistakes from the supplier (such as incorrect pricing or line details).
Invoices received using an electronic invoicing system are automatically validated, and if they do not meet the agreed terms they can be rejected by the buyer.
3. Automated Invoice Assignment
Instead of having to manually assign an invoice to a specific project or cost code, an electronic invoicing system can automatically assign an invoice received to the correct area.
4. It Makes Forecasting Easier
Often, departments in large companies cannot easily forecast budgets as it will not have knowledge of any invoices until they are about to be paid. But with electronic invoicing systems, they will be able to determine the cost of any departmental expenses as soon as the invoice has been received from the supplier.
5. It Makes Accounts Reconciliation Easier
For suppliers, if a payment is received from a customer and it is a bulk payment for several invoices, an electronic invoicing system will be able to handle electronic remittance advice information so that the money received can be allocated quickly and correctly, reducing the need for contacting a customer’s accounts payable department.
Let’s face it; we are all trying to aim for a paperless office for two reasons – one, because it’s more environmentally friendly, and two because it means we have to spend less money on buying the paper to print stuff out on.
Because invoices are transmitted electronically using an electronic invoicing system, there is no need to print anything out as it can be archived in the system and easily accessed via a computer for audit purposes.