Finding the right invoicing software for your business
What is an e-invoice?
An electronic invoice (or e-invoice) is an invoice generated, transmitted and processed digitally. It is issued in a ‘structured’ format (more of that later) enabling it to be transmitted from the supplier’s accounts department directly to the buyer’s accounts payable department, eliminating the need for any human intervention.
It is the specially structured format that distinguishes an electronic invoice from other invoices that have simply arrived via the internet, such as an invoice in PDF or Word; images of invoices in forms such as jpg or tiff; scanned paper invoices; or paper invoices sent as images by fax.1.2
The benefits of going electronic
If you’re still on the fence of going digital, here are some compelling reasons make the move to online invoicing.
- Reduced costs: For a start, you will no longer need to stock up on and store vast amounts of paper and other stationery. That’s a plus for the planet. Equally importantly for your business, you eliminate the staff hours needed for the mundane and time-consuming tasks associated with old-style paper invoicing, from inputting the figures onto the invoice to printing, mailing out, storing and invoice reconciliation.
- Speed and accuracy: An e-invoicing system inevitably works faster, more directly and more accurately than a human. As a result, each stage of the data transfer process is accelerated, leading to shorter billing cycles.
- Efficiency: Humans are prone to making mistakes. They may enter incorrect data or forget to pass on invoices to the people who need to pay them. Every extra step in the invoicing chain that involves people brings a potential for error and/or wasted time. But e-invoicing systems do more than just send your invoice directly to the right person.3 They also keep you on track throughout the whole invoicing process so you can check on your revenue flow at a glance, at any time.4 5
- Security: An automated, machine-readable system devoid of human input is more transparent and less vulnerable to fraud.6
Invoicing software – what is a right fit?
The best invoicing software helps you to simplify your company’s billing process while keeping track of your expenses. It ensures that all of your financial data, including payments (both in and out), contracts and purchase orders are integrated to provide a seamless, ongoing snapshot of your company’s cash flow. Here are other key features to look out for:
- Supporting diverse invoice formats. Invoicing software is available in different forms but the right kind of billing software for small businesses should be able to support the different formats that your customers and other business partners may be using. A good system will automatically convert different formats into structured data for machine reading – making it easily accessible to you and eliminating the need to store different versions on each invoice.
- Catering for non-standard transactions. Sometimes your invoicing doesn’t fall into a standard transaction. You may wish to offer a loyal customer a special rate, for example. Or costs beyond your control may cause an element of your invoice to change. A good system can reflect this both in your system and on the bill itself. In contrast, if you also have regular payments to make or regular invoices to dispatch, your system should be able to fulfil this function automatically.
- Multiple forms of payment. The more versatile your payment system, the more customers you can attract. So your invoicing software should support common online payment methods, such as credit and debit cards, payment via third-party platforms and the increasingly popular7 digital wallets.8
- Multi-currency capability. Dealing with international laws can admittedly be complicated, but nobody wants to turn down sales. With built-in multi-currency and international capabilities, the right software can ensure you stay up to date and compliant with the relevant foreign requirements.
- Gaining business insights. Good software can provide relevant business intelligence to help you make better-informed decisions.
- Archiving. As well as archiving your receipts, it’s possible to set expiry dates for outdated documents and remove them from your system to keep your online files organised.
- Security. Most importantly, it’s imperative that your software provider has an excellent reputation and is there to offer online and offline support when you need it.
Even simple invoicing software can speed up your billing processes and simplify your accounting in ways that are impossible offline. Not only is all your accounting information in one place on your computer (or mobile device) but it all connects up. So you know how much money is due and the liabilities you have to pay. You don’t have to make a manual note to chase an invoice; your system already knows. You don’t have to learn complex international financial law when your software is set to do it for you and ensure that you’re trading in accordance with local regulations, wherever in the world that might be. Gone are the days of clearing filing cabinets of long-forgotten bills. Online, when they’re no longer needed, your computer will remove invoices from your system. You won’t need to spend time reading the latest business literature to keep up to date with the events in your field. Your software will be trawling the internet to provide you with relevant information. What’s more, your computer won’t get tired or distracted and make the mistakes that all humans do.
Introducing PayPal Invoicing
As one of the leading online payment service provider supporting over 200 markets across the world, PayPal can ease your business into electronic invoicing and offer a slew of business solutions that will simplify your accounting in ways you would have never thought impossible.
For starters, we’ll help you easily create a personalised, professional digital invoice template, which will include everything and more compared to your old manual invoice:
- Your company logo and contact information (including your address and phone number)
- Purchase details
- Shipping and tax information
- Any further applicable discounts
- Terms and conditions
The invoice can be sent to one person or whoever else is needed at your end or on your client’s side. You can add a document to sign, an image, terms of service as well as commonly used taxes in the taxes section of your invoice settings. And if you want to allow your customer a partial payment, we’ve got that covered too. When ready, simply send the invoice via email. At the other end, the recipient needs only to click the “Pay Now” button to make a secure payment – through a PayPal account or by credit or debit card and the money should appear in your account.
You can check your cash flow situation at a glance because PayPal Invoicing lets you reconcile your invoices and payments automatically online, including due dates and the list of reminders sent. There’s no need to wade through spread sheets looking for that invoice you think is overdue. If it is, you can easily send a reminder – it’s just a click away. In addition, you may also use PayPal’s Invoicing API to integrate the invoicing process (e.g. create, send and manage invoices) into your order management system.
This is just a taste of how PayPal can help you set up your electronic invoicing. Explore our business solutions to find out how else you can enhance and secure your entire billing and payment processes.
Sources:
1 e-Invoicing Basics, What is e-invoicing, 2021.
2 Medius, What is e-invoicing.
3 United Nations, Trade Facilitation Implementation Guide, e-invoices.
4 United Nations, Trade Facilitation Implementation Guide, e-invoices.
5 TRG International, The changing role of Accounts Payable function & Its common problems, May 2013.
6 Opus Capita, How e-invoicing can lower your risk of fraud, January 2019.
7 TRG International, Must-have features of e-invoicing software, August 2020.
8 PayPal, Gear up and grow your business with digital wallets, October 2021.
9 PayPal, How to quickly simplify your online invoicing, April 2021.
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