2021 is the new year of renewed hope and revitalized optimism in the history of mankind. Since the pandemic of Covid-19 has adversely affected the human race, it’s the new resolution of mankind to strive against it. The only option left is to devise our business plans and strategies in a way to maximize profitability.
You must adopt the Best Electronic Invoice to ensure the maximum cash flow rate and improved financial situation. Numerous advantages of electronic invoicing must be considered while deploying any online software.
Many businesses are delaying the implementation of electronic invoices although they must take the action now in 2021. Every year millions and billions of these invoices are exchanged between the customers and suppliers in the supply chain.
However, the majority of these invoices have two formats: Paper or Email format. These formats create insufficiencies for the buyer’s Accounts Payable (AP) organization. This may also result in the increment of Days Sales Outstanding (DSO) for the supplier. The incremented DSO results from “e-mail float”. Email float is dependent on the days that the invoice consumes to transit from the supplier until it is received and noted by the customer’s AP team.
Suppliers who can submit invoices through electronic means can get paid faster and do not face any payment issues. All this scenario results in improvement of the business cash flow and financial health.
All the invoices received in traditional formats of paper or e-mail introduces unnecessary costs and complexities into the AP process on the customer’s side. For all those invoices received via email, the documents must be stored, routed, and sometimes scanned for their successful input into the AP system. The documents have to be saved in an email format case. On the other hand, receiving invoices in electronic format allows your company to perform automated data capture, allowing the touch-less processing in getting the data to your ERP (or backend) system for payment.
Many AP organizations perform validations at the time of processing for payment and approval. Now there is no need for manual validation in the case of automated electronic invoices. When processing the electronic invoices, AP teams can utilize available AP automation along with the business process management. Technologies are utilized such as OCR, EDI, and Document Assembly.
One of the more complicated validations performed is the matching process for Purchase Order (PO) based invoices. Generally, the matching processes are of three types. The main type is about the invoice matching with the purchase order.
Most matching processes involve tolerances where organizational policy dictates an invoice must match. As per the policy of the company or rules defined, you can cater to the leniencies allowed in the automated matching procedures.
These calculations can be very complicated but with electronic invoices, the technology exists to capture all the required data necessary for the processing.
A key element of the Best Electronic Invoice has to be a supplier portal or vendor portal. This kind of portal facilitates the vendors to check the status of the processing of payments along with a new term called dynamic discounting. This new facility allows the vendor to avail of the best type of self-service at any time.
For the AP system’s visibility, the traditional paper or e-mail based invoices take a lot of time. Without the necessary insights into the invoices, while approving them, cash managers lack the complete data required for forecasting.
A large invoice that may not be shown on the AP system may result in a significant cash deficit about the forecast. Consequently, your business finances may get unstable as you require to borrow funds at the last minute. By opting for the electronic invoices, all the upcoming payments are shown to the finance and treasury organizations in the accounting system. Hence the forecast accuracy is tremendously improved.
When you talk about the discounting process, both the supplier and customer benefit from the cash management feature of electronic invoicing. Suppliers generally offer discounts for early payments to get the cash quickly and avoid any miscalculations.
On the other hand, the customer enjoys the benefits from these discounts by getting the items and products at a discounted rate. Hence the dynamic discount program is implemented to influence the relationship between the customers and suppliers and hence strengthening it.
SMACC is the only ERP and cloud-based software that will help your business grow to a whole new level of success and victory. By implementing the electronic invoices, SMACC has taken a giant leap in business management as it engraves its name on the minds of a million target customers.