What You Need to Know about Electronic Invoicing.
E-invoicing also known as the electronic invoicing is a process where bills are delivered electronically to the clients through the internet. The concern for security by business and acceptance and adoption of e-commerce is increasing. Because of this, the need to shift to electronic invoicing is accelerated. On the other hand, many companies provide electronic invoicing software as well as services.
Cloud-based software are online platforms that help to raise online invoices. Such a software makes it easy to prepare and send the invoice to emails of customers directly online. Although electronic invoices are usually online invoices, online invoicing is not necessarily electronic invoicing.
Basically, e-invoices must contain pertinent information of the sale. This makes the e-invoice identical to the online invoice. Nevertheless, the e-invoices should be sent using XML or the Electronic Data Interchange formats. This is because the formats will allow for the creator signature. Stamping of the sending date as well as sending time is possible. Once the invoice has been sent, it cannot be changed.
Cloud Trade invoicing makes it possible for businesses to use e-invoices. Many businesses are shifting to e-invoicing because of the many inefficiencies arising from paper invoices. Usually, there are various reasons that make shifting to e-invoicing necessary.
1. It becomes easier to capture digital invoices.
Receiving invoices in paper or email formats add unnecessary costs as well as complexities. When the invoices are sent in paper format, the must be sorted first, opened and then keyed in account payable system. For the invoices sent via emails, they need to be saved and sorted first and might also require being printed for keying in if you cannot extract the data automatically. However, e-invoices eliminates such complexities.
2. Validation of invoices is automated.
Usually, account payable organizations must validate the invoices before they can process and approve the payments. Validations is usually done to ensure the vendor is actually existing and standing. Validation is also meant to confirm post office number match the name of the vendor. However, electronic invoicing allows the account payable department to use data capture technologies to validate such invoices automatically. Such validation would otherwise require data entry together with manual validation.
It’s normally expensive to employ staff to do payment inquiries. For instance, once the invoice has been sent, the supplier will need to contact the buyer in order to confirm receipt as well as invoice approval. Usually, responding to the supplier would actually incur some costs and time as well. With the help of an e-invoicing program that has a supplier portal every payment status can be checked and the supplier and the buyer can collaborate online to solve any payment issue.