The difference between e-Invoicing and Digital Invoicing
The invoice process has continued to change because of the ever evolving technology environment. Keeping on top of these changes can help improve business productivity and efficiency, while reducing costs, security threats and maximising revenues.
There are currently multiple ways invoices can be sent. The traditional paper invoice is quickly becoming a thing of the past. This is due to the development of cloud based solutions and the improvement of information and file sharing – which e-invoicing has adopted, a method that is more favourable and ideal for any business.
Most people in general will think invoicing is done as a paper document, and when hearing about digital invoicing, many different ideas could come to mind. This is where it is important to recognise the difference between digital and e-invoicing.
A Digital Invoice consists of documents being sent as either a PDF, Word or Scanned Image. These are then sent through email, and will require the document to be processed into the accounting system. This method may be more convenient than paper, but it isn’t too efficient and is open to many security issues, including email interception.
E-Invoicing takes a further step and is the leading method businesses are adopting for their invoicing process. The invoice information is delivered directly from the supplier’s accounting system to the correct fields within the customer’s accounting system. It all happens seamlessly and in real time.
e-Invoicing is much more efficient and helps with cash flow. As mentioned by the Australia Small Business and Family Enterprise Ombudsman (ASBFEO) “E-invoicing helps to eliminate processing errors.”
“Research reports around 20% of invoices today are sent to the wrong person and 30% contain incorrect information – delaying payment.” – notes Kate Carnell (ASBFEO).
E-Invoicing uses communication formats which are readable by different accounting systems, making the process fully automatic, saving time and money for businesses.
“Research shows it costs $30.87 to process a paper invoice, $27.97 per PDF invoice and only $9.18 per e-invoice; a significant saving.”
When finding a new accounting system or invoicing method, it is important to recognise whether e-invoicing is part of the services included.
“Around 1.2 billion invoices are exchanged in Australia every year; the potential benefit to the Australian economy in switching to e-invoicing is $28 billion over 10 years,” Ms Carnell said.It is these benefits that e-Invoicing brings which can have a positive impact on any business as well as the Australian economy. That is why it has captured attention and is finding traction around the country. E-Invoicing is the new and safest way to send and receive invoices, and will soon be commonly used by businesses at large.