Increased consumer expectations paired with supply chain challenges, has led to many eCommerce and fulfilment businesses struggling to keep up with demand. This means that working smarter and not harder has never been more pivotal - that’s where the benefits of e-invoicing comes in.
What is the definition of e-invoicing?
E-invoicing is a digital method of sending invoices, reconciling payments and keeping track of your cash flow. It makes it easier to manage your daily accounting operations by simplifying the processes and removing much of the manual input required in traditional paper invoicing.
What is automated invoicing?
Automated invoicing is a process where businesses can streamline their invoicing process by using software to generate and send invoices automatically. Businesses can quickly create invoices using templates, automate the sending of invoices, receive payments and reconcile statements all within the same piece of software, with no need for filing cabinets stuffed with piles of printed paper.
By removing the time and resources required for creating, printing, mailing and receiving invoices, e-invoicing streamlines and modernises the entire payment process, helping to achieve a simpler, more reliable and more environmentally friendly approach to billing.
What are the main features of e-invoicing systems?
There are a variety of invoicing automation systems available, each with their own set of unique features and integrations. However, they all provide the same basic functionality to streamline your ecommerce invoicing process
An e-invoicing system will allow you to:
- Create, edit and send invoices
- Manage purchase orders, business expenses and cash flow
- Send and receive payments online, removing the need for printing
- Reconcile statements
- Connect directly to your bank feed
- Integrate with online marketplaces
What are the challenges of traditional invoicing?
Traditional invoicing can be time consuming and cumbersome, as well as incurring additional costs that can be eradicated by switching to e-invoicing.
1. Paperwork
Invoices must be retained for tax purposes and to maintain your business records, but paper invoices take up a large amount of space. This means finding a safe place for them, filing and organising the documents, and spending time manually hunting through them in the event of a query. On top of this, the cost of paper, ink, envelopes and postage required to send an invoice must be factored into your budget.
2. Time management
One of the most time-consuming aspects of manual invoicing for 3PLs and warehouses is billing for picking and shipping costs. As well as creating and printing courier labels, you need to calculate the size, weight and most cost-effective shipping method of each order, and doing 3PL accounting manually becomes unsustainable as your business starts to grow.
What are the benefits of e-invoicing?
As you win new customers either as an online retailer or third-party logistics (3PL) provider, you may experience greater challenges in how you invoice for your products and services. If you find that you’re spending a lot of time on invoicing, or are prone to making errors because you’re having to rush, adopting e-invoicing could give you the following benefits:
1. Improve accuracy and efficiency
Mistakes can be costly and may affect your relationships with both customers and suppliers. The process of e-invoicing offers more accuracy and improves efficiency by removing the risk of duplicated data entry by human error. Being able to send prompt, error-free invoices not only helps to keep customers and suppliers happy, but also speeds up the overall billing process, resulting in faster payments for your business.
2. Achieve a comprehensive view of the supply chain
According to a study by The Economist Intelligence Unit, more than 60% of CFOs lack complete visibility into transactions within their organisations. Without the correct reports, records and metrics, it’s extremely difficult to achieve a holistic view of your supply chain and determine where to cut spending, and where to scale up. Switching to e-invoicing enables you to keep detailed records for tax and budgeting purposes, so you can accurately monitor your cash flow to inform future business decisions.
How e-invoicing can be customised
Ecommerce businesses rely on invoicing for everything from charging customers for products to paying suppliers and working out costs for storage and haulage.
If you use an order management system (OMS) to handle your eCommerce or fulfilment business, incorporating e-invoicing and integrating your accountancy system will further streamline your billing process. Once everything is set up, the convenient customisation options will help you to save hours of admin time every month, no matter what your invoicing needs are. You can also create custom reports and invoices using your own branding, or the branding of your clients if you operate a 3PL warehouse.
E-invoicing allows for seamless integration with your accounting system, online marketplaces and warehousing systems through API functionality. Once an order is confirmed and paid for, the data is automatically passed on to your inventory management and accounting software to update stock levels and process payments. By managing everything from a single centralised platform, you can take care of your past, present and future business finances all in one place.
How an Order Management System supports e-invoicing
If administrative tasks are taking over and preventing you from focusing on other aspects of your business, it’s time to consider invoicing automation as a part of improving your operations.
Whether you’re an online retailer or 3PL provider, integrating your ecommerce order management software with a reliable e-invoicing system will allow you to better manage your entire order process – from initial purchasing to last-mile shipping and invoicing, and enable you to expand your online business by streamlining internal processes.
How Mintsoft can help
Mintsoft’s suite of ecommerce solutions includes everything you need to streamline your processes, backed by a team of experts to support you throughout the software implementation and beyond. Read our guide on choosing ecommerce order management software to learn more, or book a free demo to see how our ecommerce solutions can take your business to the next level.
Updated on: March 16, 2023