In today’s world, digitizing is happening in all aspects of the business.
One way to improve the way you operate online is to make the switch to e-invoicing. The range of benefits includes reducing costs, maximizing profits, minimizing calculation errors and streamlining processes.
Read on to find out how to transform your business using e-invoices!
What is E-Invoicing?
E-invoicing is exactly what it sounds like. It’s an electronic invoice that your business generates and submits to clients for payments. It’s really the only way to go for businesses that operate online.
E-invoicing isn’t a new concept.
People have been doing it since computers became commonplace. An invoice generated using a program like Word or Excel and then emailed to a customer is an e-invoice. These methods are still in use today, along with various accounting or bookkeeping software that generates invoices and tracks financials for you.
Legally and financially speaking, an e-invoice holds exactly the same weight as a paper invoice. As long as the information on the invoice that you create is correct, the customer has an obligation to make payment for goods or services received.
Which Billing Strategies Can E-Invoicing Improve?
When it comes to your billing strategies, e-invoicing can help to streamline many of your processes.
- A Centralized Collection of Invoices
E-invoicing is a good option, as it stores all your financial paperwork in one place. This is true whether you use accounting software or create your invoices in Excel and then store them on the cloud. A centralized collection point means that everyone who needs access to your business can immediately see what’s invoiced for and what’s been paid.
Doing it this way frees you up so that you don’t always have to be available to answer invoicing questions from the accounts department. It also means that if your accounts department is running behind with invoicing, you can easily check-in and see what’s happened with your customers.
Another major benefit of a centralized collection of invoices is that your life is made much easier when it comes to tax season and calculating income and profits for the financial year-end.
Additionally, you can get quick snapshots of where your business is currently sitting in terms of income at any stage of the year.
Your invoices also become easily searchable when created and stored digitally. This allows you to monitor current invoices and payments, as well as track client history with your company. You can see trends and patterns in their behavior, allowing you to forecast what might come next with that client.
- The Personalized Sending Schedule
It’s always good to send your invoices at a time when you know your email will get seen. If you’re invoicing the same customer regularly, you want to ensure that they get their invoice at the same time each month or whatever the agreed interval is for invoicing.
With e-invoicing, it’s far easier to do this. Especially if you connect your invoicing system to a customer relationship management system that allows you to schedule emails.
The best time to send an invoice email is first thing in the morning—before your customer is likely to have sat down at their desk. This way, your email and your invoice will be at the top of their inbox, making it far more likely that the customer will take notice of it and take action.
- Better Management of Your Cash Flow
Cash flow is extremely important for any business. And, if you can manage your invoices properly, you’ll have a consistent flow of cash that keeps the wheels turning. When you use an e-invoicing system, it’s far easier to monitor your invoices and payment expectations.
Remember point 1 about getting a snapshot of company finances thanks to a centralized collection of invoices? It applies here too!
As an example, let’s look at a real estate business. Cash flow can be highly erratic based on sales of properties. It’s vital that you can see what money is owed to you and when it’s coming in so that you can make plans to manage your cash flow.
If you have regular income from commission on ongoing rentals, that can make life a lot easier. But you still need to have oversight of that in order to ensure you have money in the bank to run your business.
- Integration into Your Accounting System
Integrating all aspects of your company’s financials is what e-invoicing and the world of digitalization are all about. It makes invoice processing, payment follow-ups, and balancing the books that much easier.
Whether you do your accounts yourself, have a financial department, or make use of an outside accountant or bookkeeper, you’ll improve the way your business operates by integrating all aspects into a digital system.
The first benefit you’ll see is that you speed up your ability to process and send out invoices. You’ll also be able to see at a glance which invoices were paid, which ones are due, and which ones are now past due. This is important for ensuring you get paid on time, and for tracking which customers pay properly and which are often late.
Futureproof Your Online Business With E-Invoicing
Whether you’re in real estate or any other industry or sector, e-invoicing is not going to go away in a hurry—and this is good news!
This type of invoicing makes businesses run more efficiently and helps even small business owners stay on top of their finances with ease.
E-invoices have become affordable for everyone to use online accounting systems and to run their financial departments entirely digitally.
In fact, it probably won’t be long before the majority of invoicing is done machine-to-machine. This is when your accounting system generates an invoice and sends it directly to the customer’s payment system. Human interaction is taken out of the equation, making for a seamless flow of money in exchange for goods or services and a reduction in human error and delays.
We’re not quite there yet, but you can still make your business run in a more streamlined way thanks to e-invoicing and a digital financial strategy.