Whether you’ve tried e-Invoicing before or you’re completely new to the concept, there are many benefits to e-Invoicing that are important to know about.
Here are our Top Five e-Invoicing Benefits:
1. Save Time
When you receive a traditional invoice, the first thing you usually do is enter the information from the invoice into your accounting system. This is often time consuming and can lead to errors, as the data is extracted electronically or manually entered. While third party applications can make data extraction easier, there is still the added time involved while documents are processed. Similarly, if you enter the data manually, it is a very time consuming process and errors can occur here as well.
e-Invoicing eliminates the need for these processes – saving you time and also reducing errors which can be costly further down the line. By utilising cloud accounting systems and taking away the need for data extraction and manual entry, the time it takes for an invoice to be processed is cut down significantly.
2. Reduce Costs
Do you know how much it currently costs to send or receive a traditional invoice?
It costs an average of $40 to send an invoice and anywhere between $20-35 to receive one. These estimates include everything that is involved in the process of sending or receiving an invoice. However, a hidden catch is that if an invoice needs to be rectified, it can cost an additional $50!
e-Invoicing can reduce the cost of receiving an invoice by up to 90 per cent. Furthermore, the cost of sending an invoice can be reduced by 44 per cent. In fact, e-Invoicing could save Australia’s economy approximately $10 billion a year with government agencies said to be able to save up to $3 million alone.
3. Help the Environment
It’s estimated that the paper consumption for one office worker can range between 10,000 and 20,000 sheets per year. This number is likely to be even higher for those working in the accounting and finance sector given the extra paper they use for invoicing and the paperwork that supplements it. For the environmentally conscience, this is a lot of paper that could be easily saved.
e-Invoicing cuts down, and in some cases can eliminate, paper from the invoicing process because it’s transferred electronically. The Australian Tax Office requires copies of invoices to be kept for at least five years, but there is no need to have boxes of physical papers stored. The ATO accepts electronic copies of invoices! This means e-Invoicing reduces the amount of paper consumed considerably. Not only this, it can save business 1-2 per cent of their turnover as they’re saving money on paper, printers and ink.
4. Get Paid Faster
For suppliers in particular, e-Invoicing helps to ensure they are receiving payments from their customers as quickly as possible. Australians are notoriously know for making late payments. Invoices are paid an average of 26.5 days late to be exact. The Australian Government is aiming to get this number down to 14 days – from the time the invoice is created, to when the payments is made – which can only be achieved through e-Invoicing. With money coming in faster and businesses being paid on time more often, this then causes an increased cash flow for business.
5. Maintain Positive Business Relationships
Chasing people to get an invoice paid on time can be stressful on business relationships. The longer this process goes on for, the less patience people may have when it comes to asking again.
With e-Invoices transferred seamlessly by Link4, the communication is done for you. You’ll simply receive an email notification when your invoices are sent and then your buyer will receive a notification when they receive the invoice in their system. As this initial communication is all done for you and it’s available in your cloud accounting system 24/7, it allows your business relationships to stay as positive as possible. Especially when it comes to making sure your business is paid on time.
This wraps up our top five benefits. Let us know what you thought or if you’ve experienced any of these for yourself while using Link4.
Don’t forget you can trial e-Invoicing with Link4 for free! Find out more about how it all works here.
Information has been sourced from: