According to the 2018 State of Accounts Payable Report, 26% of surveyed organisations claimed they processed too many paper documents. 25% complained their organisation was facing too much manual data entry. But with electronic invoicing, these numbers can be improved.
There’s a long list of e-invoicing benefits that affect every part of your purchase-to-pay (P2P) process. And although the e-invoice itself has existed for quite a while now in the P2P landscape, sometimes its array of benefits can be overlooked. The graph below shows just a few of the additional improvements users in a study realised after implementing electronic invoicing.
Let’s take a deeper look some of these (and other) significant benefits.
1. Increased Cost Savings with e-Invoice Receiving
CFO magasine looked at 1,485 different organisations to see what their real cost per paper invoice was. The results were pretty astounding. The bottom 25% were spending more than $10 per paper invoice. Read that again if you need to and let it sink in: $10 per paper invoice. Though the average price per paper invoice came in around $5.83, why wouldn’t you want to aim for even lower?
e-Invoicing can drastically reduce the cost of processing an invoice as the invoice itself doesn’t have to pass through so many hands and accumulate postage fees. Going electronic with your invoices means you’ll also save on time, so your staff can put their time and energy towards more strategic tasks. How does an invoice processing cost of less than $1 sound? Because it’s achievable when you adopt e-invoicing. You’ll decrease administrative costs, processing times, and printing and postage costs.
2. Better Cash Flow Management with e-Invoice Sending
When you’re not wasting time printing, posting, and processing paper invoices, you’re more likely to get paid faster. Why? Plain and simple—electronic invoices are received faster and go directly into your customers’ AP solution, which means faster processing and an increased likelihood that you’ll get paid earlier. You’ll start to realise better relationships with your customers, too, as they’ll find processing e-invoices easy compared to handling paper, making them more likely to pay on time.
Shortening the order-to-cash lifecycle helps both buyers and suppliers take advantage of discounts. Buyers get the discounted price and suppliers are paid quicker, reducing their days sales outstanding (DSO) and getting cash back in their business quicker. Faster processing of invoices and improved payment times can lead to early payment discounts.
You’ll also decrease the likelihood of time-consuming invoice disputes since automated invoice processing uses automatic data extraction to ultimately reduce the chances of manual entry errors. If a dispute does arise, all your e-invoicing information is stored in a central location, making it easier to retrieve supporting documents and communication needed to resolve the issue.
3. Reduced Reliance on Paper & Greener Workplace
When your organisation adopts e-invoicing, you’ll contribute to a decreased carbon footprint and make our planet a better place.
Surely, you’ve seen other electronic initiatives around your office, considering that it’s estimated an average office worker can consume between 10,000 and 20,000 sheets of paper a year. And for those working in Finance or Accounting, these numbers can creep even higher. All this paper usage means one thing—less trees. And long story short, with less trees and higher amounts of paper waste, companies are leaving behind detrimental amounts of waste, emitting excess carbon in our atmosphere.
Through e-invoicing, the paper that would normally be handled manually is transferred through the system electronically, cutting back drastically (and in some cases totally eliminating) paper from the invoice process.
4. Improved Productivity
Processing invoices manually is extremely inefficient. But with electronic invoicing, as soon as an e-invoice is received the system alerts and informs relevant managers. This lets them know that an invoice is ready to be reviewed and approved, without going through additional, time-consuming steps. Better yet, the e-invoices already contain the correct documentation needed for quick approval.
How many times have you witnessed (or contributed to) data entry errors? These time-consuming mistakes are commonplace when it comes to manual invoice processing. But, with e-invoicing, these potentially detrimental mistakes are nearly erased thanks to automation. And when it comes to exception handling, manual intervention is decreased through machine learning technologies that help perform the exception handling for you.
e-Invoicing also prepares your organisation for potential growth and equips you with the proper bandwidth needed to process your growing business transactions. As you start to receive more and more invoices, your AP department can easily handle the increase in invoice volume with the help of e-invoice automation. Payments are delivered in a timely manner and keep your cash flow stable.
5. Global Tax Compliance
If you’ve been keeping up with buzzwords and hashtags recently, you may have noticed that there is quite a lot going on in the tax compliance world. Tax administrations around the world are changing the game of indirect taxes such as VAT, GST, and customs and excise duties. And if you’re a global company doing business in multiple countries, the varying regulations pile up quickly. It’s important to understand relevant tax obligations and ensure your accounting system is prepared to handle them in the most compliant way.
Adopting an e-invoicing solution that is equipped to handle complex, global compliance needs will prep your organisation with a streamlined and centralised accounting process. Plus, every invoice processed electronically is automatically stored, ready to be retrieved during audit season.
6. Digital Archiving
If you were to have an audit request pop up tomorrow, would you quickly be able to locate and pull all relevant documents? With an electronic archive, you definitely could. When all your invoices are processed electronically through an automated solution, the data automatically gets stored in your electronic archive for the appropriate time required by various regions.
With a cloud-based e-archive in place, your company can:
Save money and storage space
Be less vulnerable to fraud or a surprise audit
Consolidate all your invoice information into one location
Remain safe and secure, as each document is digitally signed and timestamped
Quickly search and retrieve archived documents, making you ever-ready for audits.
Ready to learn more?
If you’re ready to either implement an e-invoicing solution or see how we can simplify your current process, we’re here to answer your questions and assist in any transitions. Contact us to plan your next steps.