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Why You Should Start Automating Your Invoicing?
Getting ahead in the e-commerce sector is a challenge, and there are so many facets to running a Shopify store or other online sales portal. One of the bottlenecks that many e-commerce entrepreneurs get stuck in is invoicing. Time-consuming, labor intensive, and often prone to error, manually processing invoices can slow down your workflow, impact deliveries, and potentially even cost you customers.
If your existing manual invoicing process is negatively affecting your e-commerce store or your sales, it’s time to consider an alternative approach. This is where automated invoicing comes in.
In this article, we’ll look at some of the advantages of automating your invoice system and where to find the best online (and free!) resources for setting it up.
What Does It Mean To Automate Your Invoicing System?
Automation is a concept that has been around since the dawn of human civilization. It describes a broad range of systemic or technological techniques that aim to reduce human effort as much as possible. By automating your invoice system, you can free up more time and energy to focus on other important elements of your e-commerce business.
An automated invoice processing system will:
- Provide a reusable invoice template
- Extract an invoice, either creating one from scratch or generating it based on recurring orders
- Accurately match the purchase order and receipt
- Reroute the invoice to a designated senior employee for approval
- Issue payments to vendors
- Continuously track, update, and store invoice data for reporting purposes
By using an automated invoice system, you (and any employees) can omit the manual effort involved in invoice management and reap the many benefits of streamlined processing and machine-like accuracy.
The Advantages Of Automation
The advantages of using an automated invoice processing system in the 2020s are huge. After all, there’s a reason why the invoice automation market is predicted to reach $5.6 billion by 2030.
As companies from across the globe hunt for ways to innovate, streamline, and optimize their systems, digital invoicing is only going to grow in popularity. And as the e-commerce market continues to grow, it’s essential that you capitalize on this technology to ensure your offering delivers the best customer experience.
Let’s dive into some of the main benefits of utilizing this powerful tool in your e-commerce business and some surrounding statistics to back it up.
1. Saves Time
Without digital automation, manual invoice processing is a needlessly long and winding road. Fully analog invoicing takes between 30 and 90 days to come full circle, whereas a fully digital invoicing system can take only 5. That’s a staggering 90% improvement rate.
The seamlessly automatic nature of a digital invoicing system means that you free up an extraordinary amount of time to prioritize other needs.
2. Saves Money
People say that time is money—and automated invoice processing is no exception. By switching to a digital system, you can save money by reducing labor expenditures, printing costs, interest or late fees, and mailing overheads.
On average, the cost of a manually prepared invoice for SME businesses is between $16 and $22, whereas an automated one costs between $5 and $7. That’s a total savings rate of 60-70%.
3. Mitigates Human Error
The human brain may be incredible, but it is certainly not immune to error. In fact, human error accounts for a significant percentage of failed or late invoice payments. However, this changes significantly when an automated system takes on the responsibility.
The risk of inaccurately listed totals, supplier or vendor details, dates, and products all have the potential to annul an invoice and prolong the payment process. But with an automated system, this risk evaporates.
4. Effortless Compliance & Reporting
Keeping up with invoicing and tax compliance laws is an important part of running any business, e-commerce or otherwise. But with a digital system, you won’t have to do all the research and hard work yourself. The automated system will effortlessly ensure your compliance is valid, legal, and up-to-date.
You can also pull financial reports and use the data to update your income statements. This ensures you always know exactly what your revenue is, what outgoings are deducted, and what your profits are. This makes staying on top of tax so much simpler and allows you to make data-driven decisions about your e-commerce business too.
5. The Greener Option
The analog invoicing system is responsible for a vast and unsustainable portion of paper consumption. Deforestation accelerates due to the perpetually high demand for paper-based office products, but digital systems are changing that.
Paper invoices emit up to three times as much CO2 as digital invoices, making them the least sustainable invoice type on the planet. Even though technology does produce some CO2 into the atmosphere, the quantities are far from comparable.
By switching to an automated invoice processing system, your company can reduce its carbon footprint and its percentage of fossil fuel emissions, thus contributing to a greener future.
Where To Find The Best Free Invoice Templates Online
Fortunately for e-commerce businesses everywhere, there are loads of efficient online resources for setting up a secure automated invoice system. If you’re looking to start small and get acclimatized to the nature of digital processing, you might want to start with a simple reusable template, many of which are available for free online or included in programs like Microsoft Excel or Word.
A reusable digital invoice template enables you to input data more efficiently, save data from recurring clients, and streamline your overall invoice management system.
A free invoice template PDF that you can edit and customize is a great place to start if you have little to no experience with a full-on digital invoicing system. Automation can take some time to get used to, so using a simple template can make your transition a little easier.
Automation is The Future
In the short time that automated invoicing has been utilized, it has made a significant and lasting impact on companies all over the world.
By streamlining the process from initial data entry to issuing receipts to clients and settling vendor payments, automated invoices are becoming an indispensable advantage for e-commerce entrepreneurs. Starting out with a reusable digital template is one of the best ways to get used to the streamlined nature of an automatic billing system.
Automatic invoicing means faster payments, more accurate data input, control over your taxes, overhead cost savings, and increased productivity, as well as a more sustainable approach to business management. With an automated invoicing system, optimization becomes natural.
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