Although it used to be the traditional way for most companies to send invoices, paper billing is being replaced by digital invoicing. Instead of printing copies of invoices, statements, remittance sheets, and backup documentation, many companies use email to attach and distribute bills.
Increased Operational Efficiency
When you email your invoices, your customers can immediately respond with questions. This lets you clarify any issues ranging from billing errors, remittance questions, or where to send payment. You spend less administrative time printing invoices, stuffing envelopes, addressing envelopes, and delivering mail to the post office. Retain your invoices electronically so you don’t have to worry about losing office space for paper storage. Depending on keywords you use in your email, you can query your inbox and pull correspondence with your customers in the future.
There are risks associated with electronically invoicing your customers. They can miss seeing the email, accidentally discard the email, or not receive the invoice because you accidentally sent it to the wrong email address. These types of risks also occur with paper billing. In addition, paper invoices could get lost in the mail or intentionally intercepted by someone outside your customer’s company. If you promote electronic invoices, you can also push to receive payments electronically, meaning you receive payments faster with less risk.
Faster Payment Turnaround
Instead of having to wait for a customer to receive an invoice, you speed up your accounts receivable turnover by sending digital copies of invoices. Many vendors process invoices electronically and must have the invoice scanned into their accounting system prior to entering the information. Sending an electronic copy of an invoice to your vendor means it receives the invoice instantaneously, can immediately file or pass it along to the correct person, and can immediately place it into the queue for processing.
You probably already incur the expenses required to electronically deliver emailed invoices to your customers. If you have a computer and internet access, there are no extra costs for sending digital bills. When you mail invoices, you incur expenses for the paper, envelopes, postage, and transportation costs if you must deliver the mail to the post office. If the paper invoice gets lost when you send it, you must reprint everything and double your costs. When customers do not pay invoices, you probably follow up with paper statements, which incur the same costs as invoices.
You support green initiatives by eliminating paper billing. Instead of printing the invoice, memo that outlines any issues with the invoice, and billing backup support, simply attach all these items to your email. You can distribute as many copies of this package to as many people as your customer wants without incurring any additional waste. If you need to change any aspect of the invoice or remittance, there is no waste associated with prior emails; you can simply send a revised message.
Shifting from paper invoicing to electronic invoicing saves your accounting business time and money. It’s also better for the environment, and your customers receive faster, more flexible service. Communicate with your customers about your plans so you make the change to electronic billing as seamless as possible.