Find out what is invoice, how to create one, and what to include in it. Know the diffrence between terminologies, best practices, and more.
Why E-invoicing? 12 Benefits of E-invoicing for Your Business
Why e-invoicing? We have listed 12 advantages and benefits that e-invoicing has for your business over sending PDF's and paper invoices (recommended).
E-invoicing is the present and the future of invoicing. There are multiple reasons why e-invoicing is better compared to emailing PDFs or the traditional paper invoices. While e-invoicing may have some limitations, the pros outnumber the cons any day. We have listed the 12 most compelling reasons why you should be switching to e-invoicing right now. But first, here is a quick read on what distinguishes an e-invoice from other invoices.
“The digital transformation will have an impact on businesses that do not choose to adopt the up and coming technology. In fact, these businesses may suffer the consequences and be left behind.” Daniel Newman, Forbes
What is an e-invoice?
An electronic invoice, or an e-invoice, is often confused with a digital invoice. Both can be electronically processed from creation to payment, however, there is a big difference between these two. An e-invoice is created in the seller’s invoicing system, online bank or alternatively in a web-based form. From there, the e-invoice file can be either downloaded or sent directly to the buyer’s software.
The e-invoice is delivered through an e-invoicing operator. The operator can be compared to the postal system when sending paper invoices. However, if you are using invoicing software, you do not need to open the operator's software separately. Each e-invoice recipient also has its own e-invoicing address.
By e-invoicing, unnecessary steps like manual data entry, accuracy check, and swapping software are eliminated. In order for that to be possible, the invoice has to be in a format the buyer’s system can process. The e-invoice files come as structured data. Some commonly used formats are XML and EDI.
An e-invoice is:
- Structured invoice data in formats like XML or EDI, created in invoicing software.
- Structured invoice data issued using web-based forms.
An e-invoice is NOT:
- Unstructured invoice data in formats like PDF, Excel or Word.
- Scanned paper invoices.
- Documents processed with optical character recognition.
You can read about what an invoice is in general and what information to include in it, in our blog What is an invoice?.
If you haven’t started e-invoicing yet, here are 12 reasons why you should now!
- Save time
With e-invoicing, many unnecessary steps are cut out of the invoicing process. Both you and your customer can save time using online e-invoicing software.
- Reduce costs
With paperless invoicing, you do not have to pay for paper or for postal fees. Further, by saving time with e-invoicing instead of using templates and emailing PDFs, you save working time. Concentrate on other value-adding tasks instead. We all know time is money!
- Reduce mistakes
By minimizing manual input and increasing automation, mistakes and typos are reduced. You don’t have to worry about your invoice getting lost in the mail.
- Offer better customer service
It is more convenient for your customer to get an e-invoice to their desired platform. According to Basware, receiving an e-invoice instead of a paper invoice saves up to 90% on processing costs. Also, when the delivery time is shorter, your customer will have increased possibilities to take advantage of early payment discounts.
- Get paid faster
The e-invoice can be at the customer pronto. Also, it demands less effort and time effort to pay an electronic invoice. Because of that, the customer will most likely pay faster.
- Reduce paper consumption
Why waste resources like paper when it is it possible to send documents electronically? Right?
- Easier to keep track of invoices
Know when an invoice has been sent, viewed, and paid when using e-invoicing software. You will know for sure that the invoice is sent and received. Depending on the service provider, you can also see when the invoice has been viewed by the customer.
- A higher degree of control and insight into the invoicing process
If you use online invoicing software, everything is saved on one platform which is accessible from anywhere on any device. Get an overview of your invoicing through automated reports and analytics. For example, the Taimer invoicing software for small businesses and freelancers gives you real-time insights on your finances and cash flow.
- It is promoted by many states
From April 2019, all public sector entities in EU-countries have to be able to receive e-invoices from their suppliers. The e-invoices then must comply with the new European Standard EN (European Norm). Mexico and Brazil among other states have legislation that requires sales transactions to be documented in an e-invoice format. Even The U. S. Department of Treasury demands its bureaus to use electronic invoicing.
- Easy to customize
Make professional looking invoices without having to spend time editing spreadsheet modules. If you still prefer to use spreadsheet invoice templates, you can download our free invoice template.
- Increased data integrity
From a buyer’s perspective, e-invoices reduce the risk of fraudulent bills. The authenticity of e-invoices is automatically validated.
- Everyone else is doing it
E-invoicing is already becoming the norm, especially in the B2B-world. You might as well start e-invoicing now since eventually, you will have to, as your customers will demand it. In fact, some companies already refuse to get invoices in any other format.
- Save time
We have written an e-guide on how to boost business productivity by combining 8 core business functions from customer relationship to invoicing. You can download it free and boost productivity.
Challenges of e-invoicing
Although there are many ways to benefit from online e-invoicing, there are also some limitations to it. These are explored below.
- No uniform format
There are several different e-invoice formats. When sending e-invoices, the sender and receiver must use compatible file formats. Countries often have a domestically standardized format. However, especially cross-border invoicing processes can be complicated by compatibility issues.
- Varying legislation
Another headache for cross-border transactions is the varying legislation in different countries. But, this issue is to some extent fading out as the countries are considering joint efforts in standardizing, like the EU-wide standardization.
While e-invoicing frees a lot of time to do other productive things, it might not be as completely free as sending a PDF through email. If your invoicing volumes are a bit larger, software solutions often charge per invoice sent or have a monthly usage fee. Paper invoicing is by far costlier though.
- Some customers still prefer traditional invoices
It might not be possible to get all your stakeholders to use e-invoices. But, eventually, all businesses would consider accepting both traditional and e-invoices.
Electronic invoicing is increasingly utilized across the globe every day. Services and standards are constantly developed and improved. Many of the problems are therefore likely to be resolved. Anyhow, the benefits clearly outnumber the disadvantages. Electronic, online invoicing saves time throughout the invoicing process. Keep reading to find out how.
A walk-through of the e-invoicing process & benefits
Now that we have reviewed 12 common benefits and few challenges, let's explore the e-invoicing process. The process can be divided into a couple of main phases namely the creation phase, the delivery and receiving phase.
Benefits of e-invoicing: Invoice creation
When you use a spreadsheet or MS Word document template, it takes time to fill template and customize modules for the perfect layout. You will have to copy all details from somewhere, save it as a PDF, then open your email, find the right contact and send it. Or even worse, you print it out, put the document in envelopes and take it to the mail. Does this sound productive?
If you e-invoice from your software straight to the recipient's software, many clicks and all the jumping from one site to another will be eliminated. The e-invoice software will allow you to invoice under the particular project or client, and content like contact information will be filled out automatically. User-friendly tools help you customize the document according to your needs and liking. No need to open up Excel, email, or contact information pages.
Benefits of e-invoicing: Delivering and receiving an invoice
If you send your customer a PDF, they will have to open it, review it, import it to their accounts payable in their software, make the transaction by copying payment information from your document. Alternatively, you can send an e-invoice and it will appear directly in their accounts payable, where they can easily review, accept, pay and archive within the software.
Not to mention the clear advantage of the quick delivery. In case you use traditional mail, it will take days for the invoice to even arrive at the recipient's office. Thereafter, a long manual handling process is required. The data has to be entered manually before the invoice can be registered and paid.
So, do you want to create and send invoices smoothly? There are many different apps you can try out. We have an easy-to-use, yet comprehensive solution for you. You can learn more about Taimer invoicing feature.
“Taimer is a great tool for a new company that wants to grow.”
Juha Sulkakoski, CEO, Founder, Upseller
How to start e-invoicing?
Are you ready to start e-invoicing? Taimer is a free cloud-based, CRM, project and collaboration management, and invoicing software. It can be accessed from a browser as well as through the Taimer app on your mobile devices. You can create your invoice in Taimer directly from a project, based on for example worked hours or expenses. With just a few clicks, you can choose to send it as an e-invoice through an integrated e-invoice operator. Taimer offers integrations with for example Fivaldi, Basware, Ropo Capital, and Maventa. In addition to accounting software providers, banks also offer e-invoicing options to their customers. You also have the option to download e-invoices to your device and send it through the operator of your choice.
With Taimer, you have all your business related data on one platform. No need to switch between programs when checking for customer contact details and worked hours while creating and sending the invoices. And this is not it, you will get features such as automatic payment tracking and automatically generated analytics of your invoicing. If you need a more comprehensive toolkit for your company, you can try the Sales CRM or Project Management version for free for 14 days and see how it works for your business.
Useful related links to explore:
- Taimer's customer stories
- Expense management made easy
- How billing can be made hassle-free
- Taimer integrations with accounting software & banks
- What is CRM software? How to use it? A simple guide for beginners | Infographic"
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