An electronic invoice looks nearly identical to a paper invoice, and it includes all of the same information, but it is created using a computer or another electronic device, and is usually sent electronically as well. A true electronic invoice or bill is in an electronic form throughout its entire lifecycle – from creation, to being sent, received, and then fulfilled electronically. If you haven’t done so already, have look at our invoice type comparisons for a list of different invoice types.
The first electronic billing and invoicing systems were created in 1960, and have been on the rise ever since. According to the 2012 Global E-Invoicing Study, nearly 75 percent of participants said they used electronic invoicing; which was a 14 percent increase from the year before. The more and more companies that adopt electronic invoicing means the more and more people are accepting it as the usual way of business.
Uses in the business world
Many companies that utilize paper-based billing and invoicing incur lots of unforeseen costs, and are slow to adopt the change to electronic invoicing, despite their being several benefits.
Moving to an electronic billing and invoicing system means no additional cost for supplies (such as paper, ink, envelopes, shipping and handling, etc.), aside from the initial investment of the computer or electronic device you will be working from.
Typically, companies who use electronic invoicing are already using an electronic accounting system of some sort. Merging the electronic accounts payable system with the invoicing and billing allows for more automation, less work on the employees, and little room for error, meaning there’s less of a chance for audits and less associated fees.
Generate an electronic invoice
While an electronic invoice can be created simply by using a word processing software and then emailed to the client, there are also many software programs and apps such as Yes Invoice that will create invoice templates and form systems to help you stay organized throughout the entire billing process. Many of these invoicing software programs offer several features including:
- Receiving confirmation that the buyer has gotten the invoice
- No likelihood of postage problems
- True automated system from start to finish
- Billing system completed in a much faster time
- The ability to send invoices over a smartphone
- The ability to send invoices at any time, any day
Advantages of electronic invoices
Of course, an electronic billing system will save a business loads of money and time, but it will also save lots of hassle, especially if you regularly send paper invoices overseas. An electronic invoice doesn’t require all of the extra attention, no matter where it’s sent.
Electronic invoicing is also better for businesses in terms of security – with electronic invoicing, no one can steal an invoice from the mail or a mailbox and gain access to your finances, bank account information, or any other secure, inside information you don’t want others to know.
Because going electronic means using a lot less paper, companies who utilize completely electronic invoicing and billing systems can easily say they are doing something good for the environment.
Electronic invoice format
An electronic invoice follows a very similar format to that of a paper invoice, and still includes all of the necessary components such as the date the invoice was sent, a detailed list of the products purchased or the services completed, the date for each line item, the dollar amount for each line item, the total amount owed, any associated fees or taxes, any necessary payment information, and the date the expected payment is due.
Once the electronic invoice is created, it can be sent online via email or other online messaging systems, and received by the client within seconds. It’s that simple!