E-invoicing, as it is commonly defined, is the electronic exchange of an invoice document between a supplier and buyer. Continue reading for more information about e-invoicing.
What is e-invoicing?
E-invoicing, also known as electronic invoicing is a type of billing presented electronically to the buyer via predefined structured information exchange.
Two main options are available to enable electronic exchange. First, a point to point connection between buyer and seller is possible. This is often used when using EDI billing. Another option is to create a network that connects multiple sellers and buyers. Because of its efficiency and scalability, the network model is the most popular today.
What is an electronic invoice?
An electronic invoice is an invoice that is delivered electronically in a predetermined format. E-invoices are like electronic versions of the original invoice. Since they are electronic, they are faster and often more organized compared to the traditional paper versions of invoices. E-invoices can be sent via email and must adhere to standards such as XML and XBRL in order for them to be processed properly by accounting software like Intuit’s QuickBooks. There is no delay when uploading e-invoices since they don’t have to go through snail mail any longer thus saving you time with processing it all.
To use e-invoices, you need to know two things:
- The correct structure is required for the e-invoice to be created.
- The seller’s system must transfer the e-invoice to the buyer’s.
E invoices are not:
- Unstructured invoice data in Word or pdf formats.
- Images of invoices like jpg and tiff
- Unstructured HTML invoices found on a website or in an email.
- OCR (Original paper invoices)
- Fax machines that can send images of paper invoices as well as paper bills.
The rise of e-invoicing
E-invoicing isn’t a new concept. Electronic invoices are a technology that has been in use for over 30 years. They can be used electronically using electronic data interchange (EDI) and XML formats. The government has been the driving force behind e-invoicing adoption in recent years.
Benefits of electronic invoicing
You can save significant time and money by eliminating paper and manual processing in your invoices. The real benefits of electronic invoicing are the integration that you can achieve between your trading partners and between your invoice software and other business systems. Integrating electronic invoices into the AP automation software for accounts payable further speeds up invoice processing.This frees up time and resources to perform more strategic and value-added tasks.
Sending and receiving e-invoices is a significant first step in your digital transformation journey. It can also be a crucial step to ensuring your business operations are efficient to support future growth.
What are the advantages of electronic invoicing?
E-Invoicing is a cost-saving tool that companies can use to save significant amounts of money.
A company’s accounts payable system can automatically import and process e-invoices, which makes it much easier to determine payment amounts because all data is verified. In order to save time and paperwork, reports are presented visually through graphs and charts so that employees don’t have to work with a lot of tedious paperwork.
This method provides greater transparency to all parties involved (buyers and sellers) and are usually PDFs or images that represent the invoice data.
E-Invoicing: All the benefits in one glance
- Lower prices & faster ROI: Conversion to E-Invoicing can reduce your invoice processing costs by 60 to 80%
- More efficient processes and higher compliance: You can ensure that your invoices are processed more efficiently and transparently, and you will be in compliance with all legal requirements.
- More security with Securely exchange all invoices via encrypted transmission
- Improved cash flow: The time it takes to pay invoices is reduced, increasing cash flow and giving rise to trade discounts.
Full transparency and fast booking: Automated processing for incoming invoices using workflow-based approval processes ensures total transparency and quicker booking.
