Right now an e-invoice or electronic invoice is the future of invoicing in all industries, including eCommerce.
There are many reasons why electronic invoicing is much better than paper invoices. For instance, a paper invoice might go to an incorrect address or not arrive at all. In which case, the entire process of printing the invoice and sending it to the customer starts over. Thus, causing time loss and additional expenses. eCommerce companies that integrate e-invoice systems can make their invoicing process much faster, and prevent such expenses.
In this post, we’re discussing the most important benefits of e-invoices for eCommerce businesses.
An insufficient payables process can result in late payments and difficult supplier relationships. Research shows that 27% of invoice payments are late. In addition, the fact that as many as 70% of all invoice processing on a global level is still on paper, adding days or even weeks to invoice processing.
Originating in electronic format, eInvoicing allows for the automation of invoice reception. An e-invoice can be automatically integrated with accounting systems, making it ready for payment with minimal human intervention.
Do you run a sustainable eCommerce business? If being environmentally friendly is a big deal for you, e-invoicing should be the next logical step. According to a recent report, about 550 billion invoices are issued globally, and this number is set to quadruple by 2035.
The use of electronic invoices is a great way to reduce environmental impact by eliminating paper and CO2 emissions during transportation.
Electronic invoicing will allow your eCommerce business to save money by eliminating the use of paper in printing, posting, and archiving invoices. According to research, each paper invoice incurs about $7.81 for the supplier and $20.82 for the buyer, for a total of $28.63 for the entire process. On the other hand, fully-automated invoices cost only $3.50 per invoice to process.
There are also storage cost savings which can be quite significant considering the fact that over 40% of companies retain archives for up to ten years. Electronic invoices cost on average $1.30 to store, whereas traditional paper invoices cost between $1.90 and $3.90 to store.
Besides saving money, you will also save time by using paperless invoicing instead of printing invoices or emailing them in a PDF format. In most cases, e-invoicing saves 60-80% of the cost of conventional paper invoicing.
By automating your invoicing processes, you’ll allow your employees to focus their attention on other tasks with more added value. With manual keying and OCR processes becoming irrelevant, employees that once spent hours performing repetitive invoice-related tasks can now be repurposed to work on strategic tasks such as managing category spend, removing bottlenecks, etc.
E-invoicing also results in shorter invoice reception and payment times. Lost invoices also become less frequent.
An e-invoice provides better visibility and control over company expenditures and cash flow. Everything is saved on a single platform and is accessible from any location or device. You have a detailed insight into your invoicing through automated analytics and reports.
It is also easier to ensure compliance with the tax laws and legislation. Another advantage is digital archiving, which saves more than 65% compared to other types of archiving over a period of 10 years.
Did you know that each paper invoice error costs on average $53.50 to rectify? In many cases, even seemingly small errors can add up, affecting productivity, supplier relationships, and bottom-line.
The reduction or overall elimination of human errors is one of the most important consequences of using electronic invoicing. With e-invoicing, you will reduce human errors by about 37% on all types of invoices.
As of 2019, the public sector entities of EU countries need to be able to receive electronic invoices from suppliers. Most Latin American countries such as Brazil have legislation that requires e-invoicing in order to prevent tax fraud. The US still hasn’t managed to formalize e-invoicing mandates, but the Department of Treasury demands its bureaus to use e-invoicing.
E-Invoice processes are on the way to becoming a standard way of invoicing worldwide, so when the time comes for it to become mandatory, your eCommerce business will be all set.
Using an e-invoice is a way of proving transactions in a more convenient, safe, and reliable way. It fulfills the same roles as traditional invoicing and is legally equivalent but it definitely comes with many more benefits for your eCommerce business.