E-invoicing is gradually becoming the norm in companies, but also a legal requirement in many countries. What are the benefits of electronic invoicing, both for sending and receiving? Let's take a look.
Reduction of invoice processing costs
This is its major advantage: electronic invoicing allows significant savings, especially for companies that issue or receive a large number of invoices.
This cost reduction is due to two factors:
- The elimination of paper processes (paper, envelopes, enveloping, stamping, receiving, etc.).
- The reduction, or even total elimination, of manual invoice processing (double entry, sending of invoices, reminders for unpaid invoices, reconciliation with or without purchase orders, error and exception management, etc.). This allows accounting teams to save time and focus on more strategic tasks.
Increased efficiency for accounting teams
In addition to saving time and drastically reducing time-consuming and fastidious tasks, electronic invoicing allows accounting departments to become more efficient and productive:
- On the sending side, electronic invoices are generated and sent in a few seconds, without human intervention.
- On the receiving end, the processing time for an electronic invoice is reduced from a few weeks to a few days, or even to less than 48 hours in some companies, thanks to artificial intelligence and machine learning technologies. These technologies allow, for example, to automate the capture of 100% of the invoice data, the reconciliation of invoices with or without purchase orders, and the management of errors and exceptions.
Faster processing and payments
With paper invoicing, it can take days or even weeks for an invoice to reach the person approving it, with no guarantee that it will be paid when due. By switching to electronic invoicing, customer invoices are received and processed faster, resulting in faster collections.
In addition, artificial intelligence technologies now enable to reach an automatic reconciliation rate of up to 83% of supplier invoices, without any human intervention (rate observed by some of our customers). Accelerated invoice processing helps you pay your suppliers faster.
Increased accuracy and real-time visibility
Electronic invoicing eliminates the need for manual data entry, reducing the risk of associated errors:
- On issue, it avoids the costs associated with correcting errors and reissuing invoices.
- On receipt, electronic invoices can be automatically verified and reconciled (with or without a purchase order), reducing the risk of payment errors and disputes.
In addition, electronic invoicing contributes to the reliability of financial data, which is centralised and accessible in real time. For accounting teams, this guarantees total visibility on receipts, the progress of each invoice and on expenses incurred or to be incurred.
Reduce the risk of lost invoices
In paper format, invoices can be misplaced within an organisation, leading to payment delays and potential disputes. With e-invoicing, invoices are sent directly to the right place (generic email address, portal, direct integration with the recipient's information system via EDI), eliminating the risk of lost invoices.
Better cash flow and working capital management
With electronic invoicing, invoice data is centralised, both in terms of sending and receiving, which provides finance departments with an accurate, exhaustive and real-time view of invoices issued and expenses incurred. In addition to precise management of annual budgets, this information is particularly useful for efficient cash management and optimal predictability of working capital requirements.
The addition of multi-currency functionality at the front desk is also a definite advantage for the timely initiation of payment orders in foreign currencies at favorable exchange rates. The accelerated processing of supplier invoices opens up new possibilities for cash management, including the negotiation of early payment discounts.
Increased security and reduced risk of fraud
Electronic invoicing offers an increased level of security. Invoices are encrypted and sent through secure channels, such as Peppol, which reduces the risk of fraud and unauthorised access to sensitive information.
In addition, when all invoices are dematerialised and processed electronically, they are automatically stored in one place, making them easy to search and retrieve quickly, especially for internal or external audits.
At the same time, electronic archiving of invoices reduces the risk of fraud, guarantees data security and integrity (each document is digitally signed and time-stamped), and ensures that invoices are kept for the required period in each country where your company is located.
Regulations for receiving, sending and archiving invoices, as well as tax compliance rules, vary widely from country to country and are constantly changing. Automated e-invoice sending and receiving systems, such as those offered by Basware, reduce this complexity and help companies achieve compliance in the different countries in which they operate.
Reduce environmental impact
Finally, e-invoicing helps to reduce the environmental footprint of businesses by significantly reducing (or even eliminating) the use of paper. It drastically reduces the number of trees to be cut down, the chemicals and resources (energy, water) needed to produce paper, the use of ink to print invoices, or the CO2 cost of transporting invoices from one company to another. In addition, strict compliance with legal invoice archiving periods limits the environmental impact of digital business.
To learn more
Visit these pages on our website:
Would you like to know more about our solutions and the support Basware offers for e-invoicing? Contact us now!