Time and effort are two of the most valuable resources for businesses — so creating a process to quickly create, send, and save electronic invoices is essential. Though it may sound like a simple tool, the benefits are powerful.
E-invoicing, or electronic invoicing, is a digital invoice tool that can be sent once or automated for regular customers. The associated benefits are extensive: Not only can electronic invoicing be a major time-saver for businesses that rely on it for processing accounts payable, but it can also reduce material and paper costs, lower potential invoicing errors, and lead to faster payment. What’s more, many find that e-invoicing solutions can help with compliance regulations.
Read on to learn more about the advantages of switching from paper invoices to e-invoicing, from reducing overall costs and errors to enabling faster, more accurate processing.
To avoid a cash flow crunch, almost all businesses need to create and track invoices. But what is an invoice? Think of it as the way we confirm to our customers that you performed a service or shipped a product, and now they owe you money. Instead of sending paper invoices, which can be tedious and tough to manage, many businesses have digitized their invoice solutions process through e-invoicing.
E-invoicing involves generating, transmitting, and processing invoices in a digital format between businesses. These invoices contain structured data with the relevant transaction details and are created using specialized software. They can then be transmitted quickly through electronic channels and seamlessly processed and validated without manual entry.
So, how does e-invoicing work? Here’s a quick step-by-step breakdown with the key steps involved in e-invoicing:
Unlike traditional invoices, e-invoices are made up of data that can be automatically processed without manual action. In other words, e-invoices can be seamlessly transmitted into a company’s financial system without the need for accounting staff to sort each one.
Therefore, the popular invoice formats listed below aren’t necessarily considered electronic invoices:
What’s the difference between an invoice and an e-invoice? In short, an electronic invoice is a type of digital invoice — yet not all digital invoices qualify as e-invoices. Both terms describe the act of generating, sending, and receiving invoices. But instead of manual processing, e-invoices are created in a structured data format so they can be automatically transmitted between businesses.
Today's e-invoice is no different than the traditional paper ones. It includes all the same information, from the customer's address to details like services performed (or products sold), pricing, descriptions, and more. The difference is it's not in physical form, which can help make the invoicing process faster, simpler, and even more secure.
Here are some of the biggest benefits of electronic invoicing:
Here’s a quick overview of e-invoicing for small businesses and the benefits.
Whenever you handle credit or debit payments, you must maintain compliance with the PCI DSS (Payment Card Industry Data Security Standard), a set of comprehensive data security regulations to protect consumers and guard against fraud and unauthorized transactions. Not complying with e-invoicing regulations can lead to fines and audits.
For instance, PayPal Invoicing is designed to simplify e-invoicing compliance through:
Creating an e-invoice is relatively simple. Here’s a quick guide:
Ready to get started with e-invoicing? Create and send invoices using PayPal invoices for small businesses.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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