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Electronic invoicing (or e-Invoicing) is a paperless electronic system for exchanging invoice documents between suppliers and buyers in place of the more traditional hard copy paper invoices. The electronic invoice contains data from the supplier in a format that can be integrated into the buyers Accounts Payable systems without additional input from the buyer.
Many major UK companies already utilise e-invoicing systems without being fully aware of the full benefits, so why use e-invoicing and e-invoicing compliant suppliers?
- Reduced costs – The cost for processing e-invoices is typically estimated to be 30-60% lower than the cost of processing traditional invoices due to the elimination of sorting, registering and manual data entry typically required for paper invoices.
- Improved accuracy – E-invoicing enables straight through processing of critical data into accounts payable systems without manual data entry and human error.
- Reduced workloads – Improved accuracy and increased automation reduces the workloads associated with handling invoices and addressing supplier queries. Internal staff are no longer required to carry out data entry tasks and are therefore free to focus on core activities.
- Increased processing and payment speed – Automation of the invoice capture, routing and approval process provides a significant reduction in invoice processing times and increases on-time payment levels.
- Improved supplier relationships – Improved data and accuracy improves communication and reduce invoice disputes and payment status queries. Faster processing and payment timescales benefit both parties and offers opportunities strategic trade discount negotiations.
- Eco Improvements – E-invoicing is paperless, significantly reducing the paper and ink and wastage associated with the delivery and processing of paper based invoices. Delivery and transportation fuel costs are rendered obsolete and the physical space required for storing paper invoices is drastically reduced.
- Improved compliance – E-invoicing standardizes the e-invoicing process for buyers and suppliers and in the UK can be fully tax/VAT compliant. Many 3rd party e-invoicing systems are tax compliant across the European Union reducing the need for specialist tax expertise.
If you are looking to increase e-invoicing compliance across your supply chain then contact us today.