What are the benefits of issuing your invoices electronically?

Reduce Days Sales Outstanding (DSO). E-invoicing helps retrieve money more quickly from your customers, by reducing the amount of time wasted whilst your invoice is in the post. The average DSO for a business is between 40 and 60 days, but businesses which have used e-invoicing have reported a fall in their average DSO.

  • Reduced print and postage costs. If invoices are sent electronically, money can be saved on the cost of paper, print cartridges, envelopes and postage.
  • Reduced requirement for sending out copy invoices. The direct delivery of invoices to the customer's inbox minimises the likelihood of them claiming they have not received them or that they must be lost in the post. Time delays are minimised, as copies can be resent and received by them immediately.
  • Faster dispute resolution. The sooner your customer receives your invoice, the earlier they can alert you to any concerns they have about their account or the amount due.

Issuing your invoices electronically.
It is advisable to state your intention to invoice customers electronically in your contract and to ensure that they are able to receive communication by this means. For existing customers, write to them informing them of the change to your terms and conditions, and seek their agreement. Also verify the correct email address for the person responsible for making payments.

Format:
Most bookkeeping software now includes the option to send e-invoices. You may need to design a template, which gives you the opportunity to add your logo. Remember to make the document look as professional as possible – even an invoice represent your business.
Always use the preview facility to check what the invoice looks like. Field lengths are commonly tight and may not always display what you type in. If any words are cut off or the invoice is in any way unclear because of this, you should go back and change the text so it fits. Otherwise, not only does the document look unprofessional, but you may also be giving your customer a reason for procrastination.
Software packages are the easiest and most secure way of sending invoices, as they generally use encryption which prevents the invoice being read by anyone except the intended recipient.
If you don’t have access to specialist software, then it’s important to send the document as a protected Word file or a PDF. That way you can be sure that no-one can change the contents. Without this security, there is a risk that the invoice could be amended and used fraudulently.

And finally, don't forget to print off and keep a paper copy of all invoices you send electronically.

 
HM Customs and Excise have issued a useful guide to Electronic Invoicing on their website.
 
Source: www.payontime.co.uk
 
 
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