Each year there are about millions of invoices exchanged between consumers and sellers in the supply chain industries.
But most of the time such invoices are either in email format or in paper and this can create inefficiencies at the buyers’ end but advantageous for the suppliers since this can increase the days sales outstanding or DSO. The increased DSO is actually from the days that the invoice travels from the supplier through the email system until it is received and inputted by the buyer accounts payable or AP team.
Thus to address the scenario above, one can instead incorporate electronic invoicing. What are the benefits of this option?
1. Digital invoices made possible
Those invoices that are received in e-mail or paper format only include costs that can be avoided and difficulties into the AP procedure. For the invoices that are received via mail, there are still a lot of processes that must be done. Same thing goes with those that are received via email.
2. Validating Automated Invoices
The chance to validate the invoices before processing for payment as well as approval can generate peace of mind as this will ensure that the supplier is an existing one and in good standing.
3. Reduced print as well as postage costs
If invoices are delivered electronically, businesses should be able to save money on the cost of print cartridges, paper, envelopes, and postage.
4. Reduced requirements
Dealing with annoying customers is really a pain in the neck. However, time delays are reduced with troublesome customers in this process because invoices are directly delivered to the customers’ inboxes and this minimizes the possibility of them claiming they don’t get their invoice or that it has been lost in the post as everything will be digitally recorded.
5. Enhance Cash Management
A large invoice, which is not discovered by the treasury organization until shortly before payment, could result in a significant cash deficit relative to forecast. As a result, a business may need to borrow funds at the last minute at a relatively expensive premium. By processing invoices electronically, all upcoming payments become visible to the treasury organization in the accounting system — thus improving forecast accuracy.
Meade Willis is one of the providers of electronic invoicing service. Aside from that, they also offer other services such as Meade Willis edi services and more. You should check them out!