In today’s world, it is essential to be efficient and effective with our time. Paperwork is a hassle, and fortunately, there are ways to get it done without losing days, wearing down our patience and productivity. One solution for this would be implementing a digital invoicing system, which allows a quick transfer of funds between computers automatically or upon request.
Digital invoicing or electronic invoicing (e-invoicing) allows companies to electronically transfer bills between one another without having a physical paper trail slowing the process. Speed and efficiency are paramount, which is why more and more companies are looking to ditch traditional paper invoicing in favor of digital options. Here are eight advantages of making the switch.
Lower Expenses
Implementing a digital invoicing initiative will allow businesses to save money by cutting out the printing, paper, and postage costs.
If you are worried about losing the personal touch that comes with sending paper invoices, never fear; you can always include a handwritten message or add your company logo to your digital invoices to provide a professional and polished look.
Speed
The most obvious advantage of digital invoicing is that it is much faster than its paper counterpart. Once you have created your invoice and input the necessary information into the software, the system will take care of the rest, generating and sending invoices in a matter of seconds.
This process can be a huge time-saver, especially for businesses that regularly send out large volumes of accounts payables. Imagine having to print off an invoice, stuff it in an envelope, go to the post office to mail it to a client, all to find out you made an error and now have to restart the process from the beginning. Time to move away from this outdated and extremely slow system.
Audit Trail
For businesses, invoices are an essential part of day-to-day operations. These documents not only track payments and purchases but they are used to provide proof of delivery or service. However, without an audit trail, it can be difficult to spot errors or view the history of an invoice.
An audit trail records all the steps to create an invoice, from origination to completion, with time stamps documenting each stage. Having an audit trail, you will easily be able to identify potential mistakes, view the invoice’s history, or even track down a lost document.
Reduce Fraud
Digital invoices are very difficult to forge or alter. That is because digital invoices employ encryption software with multiple built-in security features, making it difficult for anyone to tamper. These features help reduce fraud and ensure that businesses are paid for their products and services.
One such security feature is a digital signature. A unique code is assigned to each invoice, and the authorized recipient can only decode it. This signature acts as a “seal of approval” and helps to ensure that the invoice has not been altered in any way.
Save Space
Another advantage of digital invoices is that they take up less storage space. With paper documents, you need to find a place to store them where they won’t get damaged or lost. The more documents you have, the more challenging this feat will be.
With digital files, you can store them on your computer or in the cloud, making them much easier to store and categorize when you need to revisit them. In addition, cloud-based storage makes sharing with clients and colleagues easy and fast, so making the switch is a great way to save space and increase productivity in your business.
Improve Cash Flow Management
Due to the advent of digital invoicing, payments are received much sooner. This is a significant benefit when managing cash flow, as businesses can access the funds they need more quickly.
As discussed in previous articles, managing cash flow is essential to keeping operations running smoothly. Therefore, receiving payments on open invoices as swiftly as possible is critical to guarantee you have enough liquid cash flow to pay employees and vendors 6-10 months down the road.
A healthy cash flow helps to avoid penalties and late fees and illustrates to creditors that you are a responsible and reliable borrower. Not to forget, timely payment of invoices helps to build and maintain good relationships with suppliers and other business partners.
While managing cash flow can be challenging, it is essential to the success of any business. And ensuring timely payment of invoices can help keep your operation running effectively and avoid many potential problems down the road.
Lower Your Carbon Footprint
An overlooked reason is that electronic invoicing is more environmentally friendly than traditional methods. By eliminating the need for printing, paper, and postage, businesses can reduce their carbon footprint and do their part to protect the planet. And with more and more consumers becoming concerned about sustainability, switching to digital invoicing can also be a great way to boost your company’s green credentials.
Easily Trackable
The competition in all industries is fierce, and in order to compete, businesses need to find ways to improve the level of service they provide to their customers. By moving to a digital system, companies can direct their customers to an online portal where they can track their invoices and receive support from customer service.
Going the extra mile can be valuable for customers who frequently have questions about their invoices or need help tracking their payments. As a result, switching to digital invoicing can be a win-win for both businesses and their customers.
As detailed, switching to digital invoicing offers plenty of advantages. Not only is it more efficient and convenient for both businesses and customers, but it also helps to reduce paper waste and save money in the long run. The digital age is upon us, so why not give yourself every opportunity to succeed?
FINSYNC’s accounting platform offers digital invoicing that simplifies your cash flow management and automates your payments and invoices to save you time and money.