Posted by Link4 Team on 22/12/2020
The difference between eInvoicing 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, and 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 eInvoicing 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 eInvoicing.
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.
eInvoicing 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.
eInvoicing is much more efficient and helps with cash flow. As mentioned by the Australia Small Business and Family Enterprise Ombudsman (ASBFEO) “eInvoicing 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).
eInvoicing uses communication formats that are readable by different Accounting systems, making the process fully automatic, and 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 eInvoice; a significant saving.”
When finding a new Accounting system or invoicing method, it is important to recognise whether eInvoicing 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 eInvoicing is $28 billion over 10 years,” Ms Carnell said. It is these benefits that eInvoicing brings which can have a positive impact on any business as well as the Australian economy. That is why it has captured the attention and is finding traction around the country. eInvoicing is the new and safest way to send and receive invoices, and will soon be commonly used by businesses at large.