What you need to know about eInvoicing

eInvoicing has transformed how businesses send and receive invoices. It automates the exchange of invoice information directly between a supplier’s and a customer’s accounting software. With this direct exchange of information, there’s no need for manual data entry and businesses no longer need to send PDF or paper-based invoices via post or email. With all of the efficiencies created through eInvoicing, businesses can experience greater productivity and get paid faster.In this article, we outline the key things you need to know about eInvoicing so you can transform the way your business processes payments.

What is eInvoicing?

eInvoicing is facilitated through a network and delivers the ability for businesses to send invoices directly to another business’s accounting system. This direct approach enables invoices to be approved and processed quickly, and it’s grown due to the rapid uptake in digital transformation amongst businesses from eCommerce channels digitising their payment systems.

When a supplier sends an eInvoice, it is raised as normal in their accounting system. Once sent, it’s distributed via an eInvoicing network directly to the customer’s system. Businesses across Australia that are set up with eInvoicing are identified using their ABN. This ensures all invoices sent and received are legitimate and eliminates the risk of paying fraudulent invoices. As outlined in the diagram below, the eInvoicing network connects the supplier’s and customer’s accounting systems.

How eInvoicing drives business productivity

Deloitte Access Economics estimates that over 1.2 billion invoices are sent throughout Australia each year. With eInvoicing implemented for these invoices, it could result in over $28 billion in savings for businesses. The time and resources that go into processing an eInvoice equates to less than $10. Compared to over $30 for a paper invoice and around $28 for PDF invoices, eInvoicing delivers resource efficiencies. The other key benefits of eInvoicing that drive business productivity, include:

Reducing manual processes and data entry which minimises human error

Faster payments as invoices aren’t lost in the mail or in an inbox

Ease in trading across borders

Less use of paper which is environmentally friendly

How can a business set up eInvoicing?

If your accounting software provider has eInvoicing capabilities, and most will, you can complete the registration steps to set up your business. In Xero, for example, you’ll need to update a few details in your organisation settings. Once your business is set up, you’ll be able to send eInvoices to customers and your business will receive eInvoices as draft bills. When your business receives an eInvoice, and all the details are correct, simply approve the invoice and it will be processed in your accounting system.

However, there are limitations that come with eInvoicing through your accounting software including debtor management tools and options to provide payment flexibility to your customers. Spenda’s integrated payments system provides businesses with the ability to set up eInvoicing along with a range of other features that will help your business boost its cash flow and reduce late payments.

Get paid quicker with Spenda

Spenda’s range of applications gives business owners and leaders the tools to transform how they operate and with our integrated payment technology, your business can improve cash flow, access and provide business finance options, and set up pay-later plans with customers that align with your cash flows. And with integration between our applications and your accounting and finance software, your business will have the tools and systems you need to get paid quicker.

If you’d like to see Spenda in action, why not book a demo with one of our payments experts? Alternatively, if you have any questions, send them over to sales@spenda.co and our team will be more than happy to help you out.