An online invoice is pretty much the same thing as an electronic invoice, but the entire system is fulfilled online. Sometimes, a vendor or a company will create an electronic invoice, but then mail a paper version. An online invoice means every aspect of the billing process is completed online. If you haven’t done so already, have look at our invoice type comparisons for a list of different invoice types.

An online invoice can be completed by way of using an online template, then sending the invoice to the buyer through email or other electronic messaging, and then the buyer completes the payment online through banking software or a payment application.

Online invoicing softwares mean no more waiting for the buyer to receive the invoice, and no more waiting for a check in the mail. Many online invoicing systems offer to store payment information for the buyer, so transactions can be completed with just one click. If you currently use a third party to send your invoices, say, an accountant or an attorney, an online invoicing program eliminates the need for that, and again, cuts down on waiting.

Mailing paper invoices can cost companies up to $30 per invoice, not to mention any added fees if the invoice gets lost in the mail. Using an online billing system is often free, and if not, the overhead cost usually shakes out to be less than $.25 per invoice sent.

Online invoicing systems also make it possible to track your invoices, and easily see what has been paid, what has not, and what invoices still need to be created and sent. If a client is late on a payment, you can send them an automatic reminder to pay their amount owed. Billing software helps you see any financial information all in the same place, which will help your accounting department stay organized.

While an online invoicing program will help you design and create professional templates so all of your billing documents look the same, you can also customize documents as you see fit. Need to apply a discount for a special client? It’s as easy as a click of the mouse.

Another benefit of using an online invoicing program, is that you can easily set up automated billing to send invoices on a regular basis to the customers that use regular services or purchase the same products on a recurring schedule. The online invoicing program will also take care of properly numbering your invoices – no need to keep track of that anymore.

With paper invoices, if a customer has a question, they have to call into customer service or send an email to a customer service employee. Through an online invoicing program, customers can ask their questions directly online through a chat application or a message board, and get their answers much faster.

Because an online invoicing system will keep track of all of your finances, it’s going to help you with financial planning, being efficient when it comes to budget predicting, and it will help you manage your year-end taxes, at no extra cost.

Of course, if you want to get the most out of any online invoicing software, you have got to make sure you set it up properly. Consider things such as giving each of your clients their own “client code”, sending invoices on the same day of each month, include boilerplate language surrounding fees on late payments, setting up simple reports, and utilizing the cloud or an online filing system to help things stay on track.

Finally, if you still like to use physical copies for bookkeeping or filing purposes, you can always print invoices or other financial information from the online program. It’s the best of both worlds!