Invoicing and billing are more than operational functions in a small business. From a cash flow perspective, poor invoicing can choke the life out of your business, restricting access to the liquid assets you rely on for inventory, payroll and other expenditures.
The idea that traditional paper invoicing is getting the job done is more myth than fact. According to a recent survey conducted by Tradeshift, a small business invoicing solutions provider, more than half of all SMB owners surveyed indicated that they routinely receive late payments on invoices. When pressed, only 11% describe their current paper billing system as "very satisfactory".
Automated, electronic invoicing offers several important advantages. For most small business owners, the transition to automated billing is seamless and relatively pain-free. Specifically, here's how an automated approach to billing can benefit your company.
Faster Turnaround Times
Electronic invoicing dramatically reduces turnaround time, allowing your company to access money you've already earned in a shorter period of time. Rather than having to wait for postal delivery and manual processing routines, automation leverages the Internet and your customers' accounting solutions to make sure bills are paid on or before the due date.
Fewer Processing Requirements
The Tradeshift survey revealed that three-quarters of small businesses that convert to electronic invoicing spend less than 5 hours per month on billing. Compare that to the amount of time you now spend preparing invoices, mailing them to customers and processing manual payments. It's not hard to see how automation can reduce your organization's labor and/or hiring requirements.
Improved Operational Efficiency
Approximately 75% of small business owners indicate they switched to electronic invoicing to improve efficiency and create a more systematized approach to billing. With an automated invoicing system in place, front line office personnel will have the ability to quickly and efficiently manage invoices. At the same time, your company's accounting team and senior leadership will gain real-time visibility to accounts receivables.
Automated billing solutions reduce costs throughout the organization. Of the business owners surveyed, 68% said that cost was their primary motivation for choosing e-invoicing. Better efficiencies, faster turnaround times and other benefits will inevitably result in lower costs and larger bottom line profits – provided you take the time to identify an automated billing solution that is right for your business.