What is e-invoicing? 4 minute read
Invoicing is an essential part of any business’ financial processes.
The faster the invoice is issued, the quicker you can expect to be paid, which is paramount when it comes to staying on top of your cash flow. Traditionally, all invoices were issued in paper form however, over the years, and thanks to significant advances in technology, e-invoicing is changing the way we invoice, for the better.
So, what is e-invoicing?
E-invoicing is the exchange of an invoice document between a supplier and a buyer in an electronic format.
An e-invoice delivered electronically in a specified standardised format that meets the needs of your business. Within the invoice, the recipient will be able to view a structured form that has all of your company’s payment details and payment terms.
E-invoicing is just one way to automate your business – find out more about automating your ecommerce business here.
What are the benefits of e-invoicing?
Over the years, e-invoicing has continued to increase in popularity, with more businesses than ever before recognising the many benefits that come hand in hand with using a digitalised invoicing system.
Significant cost and time savings
One main benefit of e-invoicing is that significant savings can be achieved by removing paper and manual processing from your invoicing processes. For example, you don’t need to worry about tedious sorting, printing or postage. When everything is in one place online, invoices can also be accessed and referred back to more quickly and easily.
In the world of business, cash flow is incredibly important and it’s vital that your invoices are paid in full and on time. Another benefit of e-invoicing is that you will be able to enjoy faster payments due to faster processing. This is because, with traditional invoices, the payment terms run from when the recipient receives the invoice. When using an electronic system, as soon as the invoice is sent out, it is available to view.
Reduced material costs
Many businesses quickly notice that they spend far less on materials when they switch to an e-invoicing system. This is because there is no need for printers, envelopes or paper when you use an electronic invoice system.
And, because you aren’t printing or using paper, this method of sending out invoices is incredibly environmentally friendly!
Errors on invoices can cause a whole host of different issues and can be incredibly costly if they go unnoticed. The good news is that with integrated e-invoicing systems, you are less likely to make errors as input errors are kept to a minimum.
Did you know that all companies, regardless of their size, are legally required to store invoices for future audits by the tax authorities? And with companies required to keep invoices from anywhere between 5 to 10 years, this can result in an awful lot of paper invoices building up. This can not only prove to be a logistical nightmare when it comes to locating invoices, but it can also cause storage issues.
With e-invoicing, the data you need is stored and available in electronic form. Therefore, it can be easily integrated into an electronic archiving system, with appropriate backups and data mirroring. All data is also secure.
Get in touch!
Here at Unicorn Accounting, our team of specialist e-commerce accountants is happy to chat about all of your eCommerce accounting needs. So, what are you waiting for? Let’s talk and maximise the growth of your e-commerce store.