Five years ago, the government of Italy started requiring businesses with government contracts to invoice electronically. Now virtually all B2B e-invoices in that nation must be electronic, and other EU countries are taking similar steps. Several government agencies in the United States have their own e-invoicing initiatives underway.
There are many compelling reasons for this B2B transition away from paper invoicing. E-invoicing saves time, money, and effort. It also ensures shorter revenue cycles, more reliable collections, and a smaller carbon footprint.
Paper invoicing by snail mail can add weeks to the revenue cycle. Along the way it invites the potential for problematic interactions between businesses and their clients and vendors. E-invoicing, coupled with electronic payment processing, solves all those annoying issues such as “the check’s in the mail,” or “the invoice was never received.” It saves time and aggravation. More importantly, it may preserve healthy working partnerships and valuable business relationships.
But even sending invoices by email as a PDF file is inefficient. The other party still has to download it to print it. If they question the invoice or need to amend it, that’s a challenge. Just locating a non-electronic invoice can be a monumental task. E-invoicing, however, is a truly touchless system that reduces friction throughout the revenue collection and accounting procedure chain. E-invoices speed the cycle forward with fewer headaches and errors.
E-invoicing captures all the data in digital format, making calculations, validations, and reconciliations simple and less vulnerable to mistakes. Search for any invoice instantly, even years later, and automatically route invoices to authorized third parties. Or crunch the data right there where it lives, and generate customized reports. It’s no longer necessary to store space-wasting and bulky paper invoice documents that eat up precious office space. Photocopying to share with accountants and others – which adds time, labor, and cost – is also eliminated.
Businesses that adopt an e-invoicing system can offer it through a secure and centralized payment processing portal. That has advantages not just for the business, but for its clients, customers, and vendors. A vendor portal can be set-up, for example, so that vendors can check the status of an invoice, confirm receipt and payment of invoices, and view past billing statements. They can do all of that, 24/7, without tying up the front office staff of a business. This kind of technological solution also provides capabilities such as recurring billing and convenient installment payment plans.
Paper invoices and other related payment documents are easy to misplace, forge, or accidentally damage or destroy. But they are simultaneously difficult to share, search, and safely archive. A well-designed e-invoicing and digital payment processing platform makes storage, management, and retrieval a breeze. It can also upgrade business security in ways that prevent payment fraud and bolster regulatory compliance.
Plus, switching to e-invoices versus paper ones can have a profoundly powerful impact by shrinking the carbon footprint of a business. That represents responsible stewardship of the environment, which increases workplace morale and generates goodwill within the community. Touting a paper-free approach can help with branding and marketing, and going paper-free is a sustainable, scalable solution that keeps paying for itself in multiple ways.