It seems obvious perhaps, but it is still worth repeating for absolute clarity – creating, sending, processing and paying digital invoices can be done more quickly, more accurately and at less cost than with paper documentation.
1. Lower error rates
Carrying out your invoicing in a digital environment means that fewer steps need to be negotiated. That reduces the chance that manual activities see human errors creep in. Think about, for example, incorrect address details being entered, paperwork going missing in the office or arriving late at the next desk in the chain, or incorrect manual entry of invoice data into the financial administration. When this is exchanged and processed digitally, these much less change for things to go awry.
2. Greater security
When sending the invoice no longer occurs in a physical sense, there’s much more control over what happens to the information between it being sent, and it arriving. There’s no longer uncertainty over how long post might take to get there, or whether it could fail to be delivered altogether. And to ensure privacy and confidentiality are protected, there is encrypting technology available. This ensures details are sent in a way that only the intended recipient can gain access to.
3. Faster and cheaper sending
With the right technology in place, digital invoices no longer need to be printed to be sent, or to be archived. In addition to saving costs on managing physical storage, the business no longer has to run printers or pay for paper and ink supplies. And when invoices are no longer sent by mail or courier, those transportation costs can also be stripped from the P&L report. Deploying them via business software systems that allow them to be entered and booked into the recipient’s financial administration automatically offers huge wins in efficiency.
4. Faster and cheaper archiving
E-invoices don’t need to be stored in a folder on a shelf – a significant win for businesses that have to process huge volumes of paperwork. And with ERP systems making it possible to ensure the documents are stored in the correct location automatically, much less man power is required to ensure all relevant information is where it should be, and is easily accessible when needed.
5. Faster and cheaper processing
Digital invoices don’t end up on piles waiting for someone to deal with them. When paper invoices arrive, they need to be checked and entered into the administration by hand. Setting up an optimized digital process for the receipt of these documents enables businesses to register the information, pass it along a chain of relevant budget holders and/or approvers, pay the bill and complete the bookkeeping with speed and minimal employee involvement.
Digital invoicing in the European Union
The EU countries have agreed that digital invoicing should be supported in all member states. However, each EU country can determine for themself the conditions that their e-invoicing system must meet. In many cases, there are additional requirements regarding the security around the information transfer.
You can read more on the specific details by visiting the e-invoicing pages on the European Commission website www.ec.europa.eu. In addition, there are initiatives like Simpler Invoicing underway (www.simplerinvoicing.nl) that are seeking to create one, transparent, homogenized environment in which any kind of business can transfer their invoices simply and easily. In this example, the government backed initiative is bringing together consumers, service providers and software vendors to create a standardized, best practice environment from which all parties can benefit.
It’s clear that moving to an e-invoicing system offers a range of benefits for any business. Depending on the wishes of the company and available IT infrastructure, it is now possible to effectively digitize the whole process from receiving an invoice, passing it through budget control, to booking it, checking it and archiving it.
This offers greater transparency and superior cost effectiveness, reducing manual activities to speed processes and reduce errors. This in turn has the potential to significantly improve cash flow, and support the redeployment of both human and monetary resources in areas of the business where they can deliver significantly more value.
More Business articles from Business 2 Community: