E-Invoicing: A Solution to Reduce Payment Times and Optimize Cash Flow

Late payments weigh on companies' cash flow and impact their working capital requirements. In France, they are responsible for a quarter of all business failures.

Electronic invoicing makes it possible to accelerate invoice processing, reduce invoicing time, and consequently shorten payment delays. It also responds to the need to optimize the financial management of businesses, especially of customer and supplier items, in order to better forecast and anticipate cash flows.

How to reduce invoicing time

To reduce invoicing time, automation is key. By digitizing and streamlining invoice processes, companies can eliminate delays caused by manual entry, lost documents, and slow approvals. Electronic invoicing, powered by AI and machine learning, enables faster data capture, automated validation, and quicker reconciliation.

This reduces processing times from weeks to just days, or even hours, ensuring smoother cash flow, fewer errors, and better supplier and customer relationships.

Respect of your suppliers' payment deadlines

Since their creation, AP Automation solutions have been helping to eliminate payment delays due to data entry errors, lost documents, lack of fluidity in the validation process, delays in invoice approval (and therefore payment), etc.

Thanks to artificial intelligence and machine learning technologies, they can now :

• Capture 100% of invoice data (regardless of their format);
• Achieve an automatic reconciliation rate of up to 87% (with or without purchase orders);
• Automate exception handling;
• Implement intelligent validation circuits based on invoice data for those invoices that require manual processing;
• Reduce the time it takes to process and approve invoices from weeks to days, or even less than 48 hours in some companies.

Automating the processing of incoming electronic invoices therefore eliminates the risk of late payments (and associated penalties) and makes it easier for your suppliers to meet their deadlines.

Optimized accounts receivable management: shorter payment terms

Electronic invoicing is also key to ensuring that your customers respect the payment terms you agreed with them. Your outgoing invoices are received and processed more quickly, which speeds up collections. The ability to automate reminders for unpaid invoices limits late payments and even anticipates potential litigation (collection of unpaid invoices), which is costly for the company.

If handled more efficiently, customer receivables management can limit the amount of outstanding receivables, thus helping to reduce your company's working capital. In addition, your company benefits from a "solid financial management" image with the banks, which is a condition for obtaining more advantageous financing conditions.

Real-time cash and working capital management

In addition to optimized accounts payable and receivable management, electronic invoice management systems provide finance departments with complete visibility into invoices issued and received, along with their associated payments. All financial data is centralized, which strengthens analysis capabilities (particularly around risk), simplifies monitoring of accounts receivable and payable, and enables better anticipation of cash flows as well as potential surpluses or shortages.

The quality of financial information resulting from the full digitization of the invoicing process is a significant advantage for making informed cash management decisions—such as forecasting working capital requirements and their seasonality, managing cash surpluses, and making occasional short-term investments.

Finally, the faster processing of customer and supplier invoices opens new opportunities in cash management, particularly the ability to negotiate discounts for early payment.

Learn more

• E-invoicing will be mandatory in France from 2024
• Receiving and processing electronic invoices
• Sending electronic invoices

If you’d like to discuss your needs with our experts and how Basware to prepare your company for e-invoicing mandates,contact us!