10 reasons to start e-invoicing
In a world of uncertainty and turmoil, one thing that can be predicted with absolute confidence is that in 2016, businesses of all types will continue to pursue digitisation strategies to reduce their reliance on paper and manual processing.
One of the most popular processes for digitisation is e-invoicing. Accounts payable and accounts receivable follow clearly defined workflows; there are wide choice of on-premise and hosted e-invoicing solutions to choose from, including Netsend from Neopost; and an all-digital process formalises what is already happening in an unplanned fashion – according to the latest Industry Watch report1 from AIIM, 40% of organisations already receive more than half of their invoices digitally.
Above all, e-invoicing can dramatically improve business efficiency and cashflow, while delivering a rapid return on investment.
Here are 10 reasons why you should replace manual, paper-based processes with an all-digital invoicing system.
1. To get paid faster. Creating and distributing invoices electronically helps you get paid more quickly. Simply avoiding the need to print and post invoices or wait for your customer to process hard copies can cut as many as five days from the invoicing process. With cloud solutions like Neopost Netsend, you don't even need to be in the office to submit or approve an invoice. All you need is internet access and a mobile device.
2. To enable prompt payment. Electronic workflows also reduce the time your accounts payable department takes to process invoices – and clear up disputes (see below). As well as helping to avoid late payment fines, faster processing could help you quality for prompt payment discounts.
3. For peace of mind. Once a paper bill leaves your company postroom, you have no way of knowing whether it has been received or not. This element of uncertainty can be exploited by unscrupulous customers to delay payment. Even if a posted bill really has gone astray, it may be weeks before you become aware of the fact and send a duplicate. E-billing systems that show when an email has been received and opened provide certainty and reassurance.
4. To save money. E-invoicing cuts costs at every stage of the invoicing process. In particular, it removes printing, postage and filing costs and reduces manpower requirements through the automation of labour-intensive processes (see below). By utilising e-billing for the order-to-cash process, Neopost has been able to reduce tangible operating expenses by more than £150,000 per annum.
5. To Increase Productivity. Manual, paper-based processes are inherently inefficient. In a 2014 study by Opinionway for Neopost, 47% of businesses said they wasted time on repetitive tasks; and 37% complained that they wasted time re-entering data several times throughout a process. By removing the need for manual data entry, e-invoicing significantly improves productivity and frees up time that can be devoted to other tasks. According to Lexmark2, automation increases the number of invoices one person can process daily from 80-120 to 300-500.
6. To Improve Data Accuracy. Automation eliminates the errors associated with manual data entry, reducing the risk – and cost – of disputes. Almost half (45%) of businesses surveyed by Neopost/Opinionway said their existing invoice processes were prone to human error, and, according to some estimates, up to 40% of all business invoices are queried. The time spent resolving each one delays payment and adds an extra £10 to processing costs – even more if a credit note is required to offset an element of the debt. E-invoicing systems and automatic data extraction minimise errors at the outset, helping to reduce the number of queries and the time taken to resolve them.
7. For Customer Satisfaction. Paying bills faster and avoiding disputes caused by manual input errors strengthens supplier relationships and is good PR. It can also enhance customer relationships. For example, many consumers like the convenience of e-billing, especially if they can pay as part of the same process.
8. To Improve Cashflow. Without the delays associated with manual invoice and payment processing, E-invoicing systems enable your accounts department to keep a closer tab on cashflow and the balance sheet. An up-to-date, centralised view of in-comings and out-goings, accessible remotely 24/7, is particularly beneficial for organisations with multiple branches and regional offices.
9. For End-to-End Automation. E-invoicing lets you simplify and streamline processes for you and your customers, for example by scheduling bills to be sent out on a particular date. In a 2014 survey by the Institute of Directors (IoD), 47% of members said the main reasons for late payment were excessively bureaucratic payment systems or overly complex terms and conditions.
10. To Keep Digital Records. E-invoicing systems like Neopost Netsend keep a digital record of all invoices and supporting documents. Easy access 24/7 has big benefits for dispute resolution and compliance. In the latest AIIM Industry Watch report1, Improved searchability and shareability of business documents was cited as the main driver for scanning and data capture, ahead of productivity, reduced storage requirements and faster response to customers. More than one third of businesses surveyed by Neopost/Opinionway said they currently had difficulty finding and retrieving communications with customers. Electronic filing also reduces the amount of paper circulating around a business and can help an organisation reduce its carbon footprint.
1 Paper-Free Progress: Measuring Outcomes, AIIM, 2015 www.aiim.org/research
2 The Art of Numbers, Lexmark 2015