E-invoicing a more connected way to invoice your customers. And, under upcoming government rules, from 2029 it will become mandatory for all VAT invoices to be e-invoices.
But what exactly is e-invoicing? How does it work? And what are the major benefits that e-invoicing can bring to your cashflow management?
What is e-invoicing?
E-invoicing is the automated, direct exchange of digital invoices between different accounting systems. Instead of emailing PDFs or mailing paper, your invoicing software talks directly to your customer’s system. It slashes manual data entry and virtually eliminates human errors.
What are the e-invoicing benefits for your cashflow?
We know that e-invoicing is a more direct and integrated way for you to share your invoice with your customers, removing many of the manual steps in the invoicing process.
So, how does this efficiency help your overall cashflow position?
Four key ways e-invoicing boosts your cashflow
Speed up invoice payment times: By transmitting data instantly between accounting systems, e-invoices bypass the manual delays that can hold up payments. According to the Small Business Commissioner, e-invoices are typically paid almost twice as fast as traditional paper bills. Getting paid faster is a huge bonus for your cashflow position.
Eliminate any processing and admin errors: 24% of UK businesses attribute late customer payments to administrative errors, according to government research. Because e-invoicing removes human keying errors and automatically validates formatting, it prevents invoices from being delayed or rejected. Payments are received faster and, as a result, your cash position is far healthier.
Get better visibility of your real-time cashflow: You can track your invoices in real time, showing exactly who has (and who hasn’t) paid your bills. This continuous flow of data gives your finance team the highly accurate, real-time figures needed for cashflow forecasting and projections.
Reduce accounts receivable disputes: The automated verification included in the e-invoicing process ensures purchase orders, totals and VAT figures match perfectly when they arrive with your customer. Government research shows that using e-invoicing reduces invoice discrepancies by roughly 15%, preventing unexpected payment hold-ups and keeping cash rolling into the business.
Helping you switch to e-invoicing
If you’re still using PDF, Word-based or paper invoices, now’s the time to switch to e-invoicing.
Book some time with our team and we’ll show you the various finance and e-invoicing platforms that are available. With the VAT e-invoicing deadline only three years away, it’s sensible to move your systems to e-invoicing ASAP and to make the most of the cashflow benefits.
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