Why e-invoicing solutions are great for businesses.

Sep 30 2020 | Contributing writer Gene Marks, small business expert and PayPal ambassador

Learn how e-invoicing solutions helped Gene Marks, a small business owner and CPA, be more efficient in business.
An abstract line drawing showing how technology can help businesses operate more efficiently.
Our most-valuable resources as a small business are time and effort. And one thing that helps me be more efficient is the ability to quickly create, send, and save electronic invoices. It’s a simple tool, but a powerful one. 
 
What is e-invoicing?
Text that states 40% of merchants have sent an invoice from their phone.Almost all businesses need to invoice someone for something. So, what is an invoice? An invoice is the way we confirm to our customers that we performed a service or shipped a product, and now they owe us money. But in just the past few years, more business owners have started ditching the humble paper invoice in favor of digital invoices.1 

E-invoicing, or electronic invoicing, is a digital invoice that can be sent once or automated for regular customers. Electronic invoicing can be a big time-saver for businesses who rely on it for processing accounts payable - many find that e-invoicing can even help with things like compliance.
 
E-invoicing vs paper invoicing.
Today's e-invoice is no different than the traditional, paper ones.  It includes all the same information - from the customer's invoicing and shipping/service address to details like services performed (or products sold), pricing, quantities, descriptions, invoice number, purchase order numbers, the supplier or salesperson's identifier, and dates. It's all there.  Except it's not in physical form. It's online or even cloud-based. And we can reap benefits from an easy-to-use digital invoicing solution. 

 
Four ways an e-invoicing solution has transformed my business.
 
1. We now do data entry from nearly anywhere.  
Thanks to mobile innovations, business owners like myself have seen our lives, and our companies, transformed.  Now we can communicate, collaborate, automate, administer, and operate our businesses from wherever we are and whenever we want. I've learned from my best clients to leverage my mobile devices - phone, tablet, laptop - to get alerts, updates, reports, notifications, and other information to help me run my business - whether I'm in the office or on the road. But to get that data out of my system it was also important to integrate it into the system.

Back in the day, we would finish work for the week and my people would submit manual time sheets. Someone in my office's finance department would manually enter that information into accounting software on the computer, and then print and mail invoices. This margin for human error left us open to things like compliance issues. Now, when we perform a service, I authorize certain technicians to automatically generate an invoice at the client’s site – whether they’re in their car or walking down the street. It's had a huge impact on our productivity.  
 A line drawing of the transactional flow of electronic invoicing.
2. Our cash flow has significantly improved. 
Time directly affects cash flow. Before we moved to an e-invoicing solution, days or weeks passed between the time we performed the service and invoiced the account payable on our
Text that states 78% of PayPal Invoices are paid within one day of sending the invoice.invoice tracker. Now, as mentioned above, we're doing our processing and data entry from our mobile devices, so we’re generating e-invoices as quickly as the service is performed. More importantly, we deliver the invoice electronically so that clients have it quickly, instead of waiting days for the post office to deliver it. 
 

Speaking of saving costs, our e-invoices include PayPal as a payment option, so our clients can pay us with just a few clicks. 
 
Think about that: with a little change like adopting e-invoicing, we cut our payment processing by weeks - and significantly impacted our cash flow.

 
Text listing the benefits of e-invoicing that lead to improved productivity.
3. Besides cash flow, e-invoicing makes us more productive. 
That's because we're all getting our invoicing and payment data while we're on the go. We're entering this invoice data into the web-based system without delays. We're analyzing information end-to-end in almost real time. And because so much is automated, we've reduced the time spent on-boarding new employees. This has enabled me to make quicker decisions and identify potential problems (an overdue invoice, a less-than-expected billing from a supplier) before they occur. 

Line drawing of a hand holding a sprouting plant.4. It’s also a greener alternative. 
Being an environmentally conscious company is important. Printing less paper invoices and storing our files electronically enables me to tell the world that we're doing our little part to try and make that difference.

 

As far as e-invoicing options, we decided to use PayPal Invoicing.
There are many great e-invoicing software applications to choose from. We use PayPal Invoicing for a few reasons. 
 
For starters, it's cost-effective. PayPal invoice templates are free and the transaction fee we pay on payment is no different than what we've paid in the past when accepting credit cards.  We use the PayPal Invoicing management center as our accounts receivable ledger, so we can track invoices and payments on the go. I also like the flexibility of PayPal invoice templates and the options to attach files - like a quote or service agreement - when we need to. 
 
Great e-invoicing solutions do this.  They allow companies to accept partial payments and deposits, send out reminders, retrieve a complete history, accept country-specific payments in different currencies, and even share the invoice as a PDF.  PayPal Invoicing also gives me the ability to integrate with other applications in an ERP system and output to Microsoft Excel.

My advice: If you run a business, turn your manual processes – like invoicing – digital. Believe me, your competitors are doing this. You need to as well.
Try the PayPal Invoice Generator for free. You don't need an account to download or print.
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

Source: comScore, based on a survey of 1,226 US and Canadian small- and medium–sized business owners (businesses with <250 employee­­s and annual revenue of $25K to $5M), December 2017. 320 of surveyed businesses are currently using PayPal. 

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Frequently asked questions.

You can view your invoices by going to the Invoicing section in your PayPal account. On this page, you have many options on how to find the specific invoice(s) you are looking for, how to sort them, and more.
After you send your PayPal invoices, your customers will be sent an email that links to your invoice. Your customer can then review the invoice and choose to pay you online with their debit or credit card, or using their PayPal Wallet.

You'll get an email confirming that we've sent your invoices, and when you've been paid.
 
PayPal Invoicing has no set up or monthly fees. When a customer pays you online, you’re charged a fee based on the amount of the purchase. Fees vary by country or region.
Learn more about fees.

How can customers pay my invoices?

PayPal customers can easily pay your invoices. They don’t need a PayPal account to pay. They can also pay you with a credit or debit card.

Can customers make partial payments?

To accept partial payment from your customer, check the Allow partial payment box under payment options when you’re creating an invoice. This lets your customers make multiple payments toward the total amount of a single invoice.
 
If you require a minimum amount due, your customer will need to pay at least that amount in their partial payment. Your invoice will have a Partially Paid status until it’s fully paid. A record of payments will appear on the invoice details.
 
Partial payments aren’t a credit product or a way to allow for an excessive number of payments. We may contact businesses if we suspect they’re not using this feature correctly.

What if customers can’t find my invoices?

If your customer can’t find their email notification for an invoice, their email filter might have sent it to the junk folder. If your customer has a PayPal account, they can pay the invoice by logging into their account where they’ll see the invoice in their Activity. If needed, you can share a link to the unpaid invoice with your customer.
  

Can I send reminder emails for unpaid invoices?

To send a reminder about an unpaid invoice, find it in your list of invoices. On a desktop computer, click the three-dot icon and click Remind. On a mobile phone, you can send reminders from an unpaid invoice’s details page. You can personalize the reminder before sending it. Your customer will receive an email reminding them to pay the invoice. To save time, set up automatic reminders for all new invoices in your Invoicing settings. You can also schedule automatic reminders warning customers when an invoice is overdue.
Set up automatic reminders.

Save customer contact info

We’ll save a list of all your invoicing customers in your settings. You can add more contact info about your customers in your settings or by editing your customer’s information when you’re creating an invoice.
 

Can I cancel an invoice?

When you cancel a sent or shared invoice, your customer won’t be able to pay it.
To cancel an invoice on the desktop experience, find the invoice in your list of invoices and click the three-dot icon on the right side of the screen. You have the option of sending your customer a notification email about the invoice cancelation. On mobile, find the invoice from your list. Tap the More icon on invoice details and cancel it.
 

Can I record payments made outside PayPal?

If your customer pays by cash, check, or another offline method, you can record the payment from the invoice details page. You can also record an offline partial payment if your customer made a deposit or paid an installment. Recorded payments appear in the activity of the invoice’s details page along with any notes you’ve entered about the payments.
 

Can I add notes/memos for my records?

To add a note to your invoice for your own records, click or tap the More Options link while you’re creating an invoice. Add a memo that your customer won’t see. If you’ve already sent the invoice, you can add a memo on the invoice’s details page.
 

Can I give my customers a receipt?

When your customer pays a PayPal invoice, they automatically receive a payment receipt. If your customer wants another copy of the invoice, you can share a link to the paid invoice or create a PDF to send or print.
 

How do I download invoices for my business records?

To download single or multiple PDFs for your invoices, hover over one or more invoices in your list and check each box. Then choose Download from the actions displayed.
 

How do I integrate PayPal Invoicing into my website?

With a single integration, you can connect PayPal Invoicing directly into your order management system or website. You’ll need API credentials to connect your PayPal account to your platform so you can integrate PayPal Invoicing with your site.
Integrate PayPal Invoicing.

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