E-invoicing Saves Time and Money

All types of businesses are always looking for ways to cut down on expenses and streamline their operations. Paper remains the source of some of the greatest inefficiencies in the modern business world, and replacing legacy processes with updated paper-free alternatives can make a huge impact.

One place where paper currently dominates is invoicing and accounts payable. Bills come into a business and generate even more paper as a business handles them. Invoices need to be matched to goods receipts and purchase orders, and those orders need approval from higher ups. In many cases, this is all done manually via paperwork distributed throughout an office, according to Spend Matters.

“Even in 2016 and even in the United States, roughly 70 percent of invoices are still done by paper, fax and paper checks, even where there is the option to use something simpler and faster,” Markus Ament, chief product officer for Taulia told PYMNTS.

That simpler, faster option is an electronic invoicing system. In this type of system, the work of matching orders to invoices and verifying that goods have been delivered and billed properly can be done automatically by a computer. E-invoicing systems can even approve payments once all the particulars of the transaction check out, Spend Matters noted.

Save time

These automated systems allow a company to save a great deal of time: An electronic approval process is not dependent on people searching through filing cabinets to verify information. An e-invoicing system also doesn’t need to wait for approvals from managers to make payments – the system itself verifies that the transaction is good.

According to Spend Matters, Northgate Information Systems was able to cut its support staff from 15 people down to five after automating invoice procedures. That kind of reduction in staffing can lead to an influx of money that a company can put to more strategic use.

Save money

E-invoicing can also save a business money, if used properly. These types of systems allow a company to make payments faster, as well as cut down on the costs of paper, printer ink and mailing associated with sending a document to the correct offices.

The National Health Service in England implemented an e-invoicing system for its supply chain in 2014, and recorded $22.8 million in savings after making the switch, according to IT Director.

Electronic systems can also help save money by making a company faster and more responsive. Many times, there is quite a lag between when a bill arrives at a business and when it’s paid off. This happens because it takes a while to confirm that the goods or services were rendered properly, then more time is taken to get the various approvals from payment managers, according to Spend Matters.

When paying invoices, there are almost always penalties for late payment, and more often than not there are discounts for early payment built into the contract. And a more streamlined e-invoicing system allows a company to capitalize on this. Faster payments save money and avoid late fees, two things that greatly benefits any business.