Originally published on 6/30/2014.
Updated on 2/16/2022.
Business invoicing can be a time-consuming, error-prone and costly process. Many companies, especially small businesses, still create invoices by hand—printing them, stuffing envelopes for mailing, and then waiting for either a check or a call with an electronic payment. Once a check is received from the customer, your accounts receivable (A/R) team has to record the payment, reconcile the account, and then leave the business to deposit the checks at your banking institution. Additionally, if you receive a credit card or ACH payment, your business has to take the time to process the payments.
All of this creates a lot of opportunities for mistakes to be made. The more a business owner spends on accounting, which is essential for business operations, the less time they are spending on developing their business and providing customer service. Often times, they end up hiring someone else to handle all of these details, which is yet another expense.
Electronic Invoice Presentment and Payment (EIPP) provides a solution that increases productivity, reduces mistakes, saves costs, and allows the business owner to spend more time growing their business and developing relationships with customers. As technology has developed, businesses are now able to utilize EIPP systems to refocus their operations on higher value functions across their organization such as sales, management and overall, reducing costs. All invoicing processes across internal A/R operations can now be automated and accelerated to save time, money and overhead.
As accounts receivable automation software has become more accessible to businesses of all sizes, EIPP solutions have become more affordable and prominent within A/R operations. Affordability, increased with the reliability of Software-as-a-Service (SaaS) products, provides complete oversight of invoice payment acceptance and processing across your organization. Now, EIPP solutions can tie into most desktop and back-office accounting systems to manage all payment processing on a single platform.
Electronic invoicing solutions allow business owners to build automation into their invoicing processes and integrate EIPP with their own accounting software. EIPP offers several benefits:
- Customers can easily update online fields and payment totals associated with outstanding invoices
- Terms can be automatically imported based on a customer-by-customer basis
- Recurring charges can be automated for individual customers
- Payment options can be included as part of the invoice
Automating your accounting and invoicing practices increases accuracy of the invoice process, which in turn reduces the likelihood of customer disputes. Invoices can be sent by email, delivered through an online portal or mobile device, or as part of a recurring charge. If invoices are sent as a recurring charge via AutoPay services, the payment can be automatically accepted, processed and posted—all in a single movement (i.e. straight through processing). If sent via email or online portal, payments can be immediately processed through the business' merchant processor and posted to your back-office accounting system.
There are many options for EIPP solutions across the payments landscape, ranging from software for use on your own back-end accounting systems, third-party services that integrate with your current system(s), or internet-based systems via cloud computing. As with everything across your business, analyze your unique A/R processes and workflows to determine the features and functionality that best fit your business, and research the many options available to discover what works best for you and your A/R organization.
Ready to make the move to e-invoicing capabilities with Electronic Invoice Presentment and Payment (EIPP) solutions from a truly integrated receivables platform? Learn more today.