Mar 29, 2022
Automate the invoice process
Are you ready for an online program that eliminates the grunt work of manually filling out, mailing, and filing away invoices on paper (not to mention taking payments manually)? Well, the solution to eliminating all that extra paperwork exists, and it is ready to help save you time and money while expanding the reach of your business.
Online invoice processing has really revolutionized the invoicing process. It keeps track of accounts payable (AP) and accounts receivable (AR), which removes the space for human error that happens when you fill out invoices manually. See how Resolve streamlines AR invoicing as part of their Net Terms management solution.
Paperwork will never get lost or misplaced again using an online invoicing system. Everything you need to successfully process invoices, incoming and outgoing payments, and log everything in the general ledger is accessible and incredibly user-friendly. If that isn't convincing enough, the cost difference compared to employing somebody to process invoices manually is substantial. Of course, pricing is just one advantage. Is it time for your small business to make the transition to processing invoices online?
How accounts payable benefit from using online processing for invoices
Most distributors, manufacturers, and industrial machinery and equipment companies have quite a few accounts payable (AP) on file, which of course, can become complicated to keep track of, especially as a company grows and takes on new accounts.
While most of the focus tends to be on how online processing software streamlines the accounts receivable side of a business, having AP digitized and organized also reduces labor, increases accuracy, and gives real time information about what’s owing and what’s been paid.
The benefits of using online invoices
The part that attracts many companies to switch to using invoicing software is keeping balance sheets up to date with very little hassle, and it ensures that invoices are sent out and processed without delay. Plus, businesses no longer need to rely on printing, postage, and paying an employee to manually distribute paper invoices or email them out and track them manually.
Another benefit to online payment and invoice processing is the reduction in late payments. It significantly reduces delays to changes when an error has been made. Fixing an online invoice takes minutes and the amended invoice is sent back to the client immediately. Since this can take months for paper invoices, the reduction in late payments is a clear advantage.
There are also the inherent risks of losing the paper invoice in the mail. Up to 10% of all mailed invoices never reach the client. They’re either lost in the mail or lost in the client’s internal accounting system. Online processing for invoices also saves clients time and money and makes the transaction process seamless.
The ease of making invoice payments using online payment methods
The outdated process of sending a manual invoice and waiting for due payment in the mail can take weeks. And, when cash flow is tight (which is a very common problem for businesses these days), nobody wants to waste time and money waiting on the mail.
For any business that has multiple invoices with the same customer, online processing makes it easy to keep track of a company’s total outstanding invoices, remaining credit, and even payment history. Many programs can be set up to send notifications when invoices are received and/or when they're paid.
The best online invoice and payment processing software programs can be fully integrated with whatever accounting software you already use—make sure to check for this when you’re reviewing your options. The most common integrations include FreshBooks and Quickbooks.
Online payment methods increase payment compliance by making it easy to make payments. While we’ve talked about the challenges of receiving payments by mail, it’s also a deterrent when making payments by mail. Most companies prefer to make payments online. It’s less time-consuming, and easier to process, track, and confirm payments this way. And making it easier to make payments is always a good thing!
With online invoice processing, it's like having a virtual terminal for accepting payments—an online pos that also streamlines the billing process. Depending on the invoicing software you use, there may also be an option for customers to pay at checkout with different currencies that are then converted to the USD amount of the invoice.
Options for online processing for invoices
Online invoice processing and automatic payment programs such as Google Pay, Stripe, Square, Apple Pay, and PayPal are all designed to make a company's day-to-day work easier and eliminate the frustrating wait time associated with accepting payments made by check.
They allow businesses to send and receive invoices quickly and with ease, they provide credit card processing, payments are easily deposited and the cash is ready to use within a few business days of receiving them. In general, companies like this charge a flat fee for each invoice issued (around $0.30 each) and a percentage of each payment received through the system (2.9% for credit card payments and 1.0% for bank transfers or debit card payments).
Be aware of possible hidden fees involved in any invoicing solution or invoices app. One good method for checking is to read reviews for each company online. Sites like Trustpilot and Google are great for seeing how people describe their real experiences working with online invoicing.
But if the idea of using PayPal to send invoices and receive payments seems a little outdated, you’re not alone. In addition to the fees that PayPal charges, they tend to be a more common solution for freelancers and small businesses that aren’t necessarily looking for a more professional system.
Net terms & invoice automation
Resolve is an online processing for invoices option that offers business owners complete B2B net terms and credit management solutions. With Resolve, businesses can access discrete customer credit checks, understand the net terms risk of each customer, and know exactly what credit limits and net terms to offer each customer.
Resolve also gives each business an online payment portal. Once your customers receive an invoice, they can access their account online, see both their credit limit remaining and amounts owing, and easily make payment by ACH payments, credit card, wire transfer, and even by check. Finally, Resolve solves cash flow problems by paying out up to 90% of each invoice into your bank account within one day of issuing an invoice. This allows companies to extend net terms without risking cash flow problems. Learn more about Resolve here.
Using an online processing option for issuing invoices and receiving payments that allows you to use your own company’s branding is professional and conveys to your clients that your accounting department is efficient and effective. Once an invoice template is set up and your merchant account is active, you'll have an accessible payment gateway for all of your customers, giving them access to the secure payment options they want, and payment reminders as invoices become due.
Increase efficiency in your invoice processing and online invoice payments
On average, a manually completed invoice takes 25 days to process in its entirety—and that’s relying on a customer to pay immediately. It doesn’t account for any customers who require net terms of 30, 60, or 90 days. Most B2B companies offer net terms, and as businesses grow, keeping track of workflow, accounts receivable, and late payments for these accounts requires an online system to be efficient and scalable.
Charging late fees and sending out past due notices can be automated with digital invoices and online payment systems—another increase in functionality. And, you can easily see which notices have been opened and read, and which have not received attention from your customer.
Thanks to online invoice and payment processing, the old days of stacks of paper that signaled a businesses' bookkeeping department are behind us. Having an online system also allows companies to better manage staff changes and turnovers without impacting the accounts receivable process. Every employee who manually processes invoices will have a slightly different system in place. If they’re suddenly unable to come to work, your business may be left with a confusing system.
Online invoice and payment solutions are intuitive and allow for the quick onboarding of a new employee or a temp worker. It takes away some of the challenges of a fluctuating workforce—especially when we consider the challenges of operating any business during a pandemic. A new hire will be able to quickly review the accounts and use the online system to maintain accounts receivable without struggling to find email invoices or track due dates.
Of course, your customers may also be dealing with staff turnover. An online system with electronic invoices will allow them to continue to keep their accounts up-to-date. And if they have any questions about what they owe, what their credit limits are, and or any invoice data, it’s easy for you to pull up and share that information with them.
