Paperless Invoicing: A Better Alternative to Traditional Invoices
Today, businesses rely on speed and efficiency to succeed. Traditional paper-based invoicing offers the opposite; it slows them down. In order to meet increasing customer demands, deliver professional experiences, and carry out error-free billing, businesses must switch to paperless invoicing.
Paperless invoicing does not only take the paper out of billing, but also numerous other hassles. It unlocks a whole new level of billing efficiency, and helps businesses get paid faster. To make the most out of paperless invoicing, businesses need to be equipped with advanced billing software.
In this blog, we’ll explore what paperless invoicing entails in detail. We’ll also look at how it compares to, and outshines traditional invoicing.
What is Paperless Invoicing?
Paperless invoicing means creating and transferring invoices digitally. Unlike traditional invoicing, this process does not rely on paper, and printing machines—an aspect that makes it increasingly eco-friendly as well.
Invoices are stored digitally within secure billing systems. They don’t have to be stacked up in huge piles, and stored in office cabinets physically. This saves a lot of space, which is also a costly resource.
Other than that, paperless invoicing saves companies from juggling with disorganized pieces of data. Paper invoices are easily lost, misplaced or destroyed. This can cause companies a headache at the time of financial audits.
Electronic invoices, on the other hand, are easier to safe keep, as they are stored in secure online vaults. Billing software lets businesses organize invoices in any manner they wish to. They can arrange them by dates, customer names, subscription services, payment statuses, and more. These invoices can be easily retrieved whenever needed.
Why is Paperless Invoicing Important for Subscription Businesses?
Paperless invoicing offers subscription businesses everything that traditional invoicing doesn’t. These are some factors that make it a must-have:
Paper invoices are especially troublesome for subscription businesses, as these businesses need to bill on a recurring basis. This means that they have to generate repeated invoices for a single customer at set intervals.
The more customers a business has, the more physical invoices it needs to create, and the more out-of-hand invoice tracking becomes. Paperless invoicing offers a more streamlined, and organized solution.
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First of all, e-invoices can be generated by billing software instantly. The process doesn’t involve manual labor. Secondly, they can be sent instantly to customers over the internet as well. Traditional invoicing simply cannot catch up with this level of speed and efficiency.
Other than generating and sending invoices, the system keeps a detailed transaction history of each customer as well. No matter how much invoice volume a business has, powerful software stores it all, and enables invoice tracking in real-time.
- Scalability
Paper-based invoices might make sense for startups or businesses with a very low customer volume. However, those with a considerable amount of customers cannot make do with it. No business likes its financial operations being all over the place.
With electronic invoicing, businesses can deal with large customer numbers more effectively. They can scale confidently because increasing customers won’t necessarily increase their invoicing workload. That is because their invoicing software can smoothly scale along with their business size.
- Automation
Automation is crucial for fast payment processes. Traditional invoicing heavily relies on manual workflows. It requires manual paper invoice creation, delivery, storage, and customer follow ups. It also requires customers to pay manually, for instance, via physical banks.
Paperless invoicing is a game changer, as it powers automated operations. Businesses can leverage their billing systems to automatically track each subscription cycle. When payment due dates arrive, the software auto-generates invoices.
Moreover, it lets businesses track invoices by payment statuses as well. This means that they don’t have to manually catch up with each customer to confirm their payment. Payment gets automatically confirmed in the billing system as soon as the customer pays.
The ‘paid’ status of electronic invoices indicate payment confirmation. If any payment remains pending past its due date, its invoice is flagged. Businesses can conveniently track these flagged invoices, and reach out to their customers via automated messages.
Thus, paperless invoicing reduces manual workload to a great extent. It even automates payment reminders that are sent when invoices are due. It also auto-sends payment confirmation messages or thank you emails post-payment.
- Compliance
Electronic invoicing is not only important, it has been made mandatory in multiple regions as well, such as in some European countries. Paperless invoicing makes compliance easier for businesses in other regions too.
Saved invoices serve as proofs of legal transactions. Since e-invoicing supports accurate digital records, businesses can easily extract data from their billing systems for audit purposes.
Moreover, billing software makes it easier to calculate taxes based on different locations. Without this system in place, tax calculations can become burdensome.
Furthermore, paperless invoicing is superior when it comes to protecting customer data. Robust invoicing software encrypts customer data, and stores it in secure vaults. This prevents unauthorized users from having access to it.
This aspect makes e-invoicing comply with data protection standards such as HIPAA and GDPR effortlessly. On the other hand, paper-based invoices offer no such protection. They carry a higher risk of unauthorized access.
What Makes Paperless Invoicing the Superior Solution?
There are multiple features of paperless invoicing that make it outshine the traditional, paper-based billing. Some of them have already been discussed above. Here are some other major ones:
- Reduced Operational Costs
Paperless invoicing is very cost effective, as it doesn’t require the amount of physical resources that traditional invoicing does. These resources can include paper, printing machines, and space for storage.
Employees are another costly resource that traditional invoicing requires in abundance. The more invoices that need to be dealt with, the more manpower needed. Contrarily, e-invoicing cuts down on operational costs a lot.
Every aspect of billing is managed by a single billing software. Invoicing is automated and cloud-based, which means that it is unified as well. Unified invoicing eliminates the risks of data discrepancy, duplicate invoices, and flawed financial statements. These errors can prove very costly otherwise.
- Automated Dunning
There’s always a chance of payment failure in subscription payments. Businesses can overcome these failures with the help of smart dunning. Billing software allows the real-time tracking of invoices. This means that when customer payment fails, businesses are notified about that immediately as well.
Advanced billing platforms are equipped with auto-dunning tools. This means that they can retry payment attempts using the customer’s selected payment method. Payment attempts are retried repeatedly until funds are successfully procured.
Other than retry attempts, businesses can also send dunning messages and emails to customers. These messages are personalized, and remind the customers to pay. They also encourage customers to update their payment method if their current method faces issues.
These dunning strategies are not possible in paper-based billing scenarios. Firstly, immediate customer payment tracking is not possible there. If payment failures occur, businesses have no way of knowing about them timely.
Secondly, automated dunning is not possible in that case. Businesses have to rely on customer communication entirely to resolve every payment problem. This communication is often not automated, and customers have to be reached manually. This delays payment recovery further.
- Integration with Other Tools
Another major advantage of e-invoicing is that it can be easily integrated with external platforms, such as accounting tools. Accounting is the backbone of businesses as it ensures financial check and balance.
E-invoicing software has flexible APIs that can integrate with accounting software, and then sync data with it automatically. This reduces a lot of manual burden as billing data gets auto-shared for accounting.
On the other hand, paper-based invoices have no way of getting auto-synced with external software. As a result, businesses have to manually copy paste each invoice’s details into the accounting platform. This is not only time consuming, but also highly error-prone.
- Easy Invoice Edits
It is easier to edit invoices at the last minute when they are digital. Edits are required in the case of billing errors or adjustments. Invoices can be quickly edited online and then sent to customers. In case the business overlooks a detail, and the customer notices it, they can request a correction as well.
Paperless invoicing makes these corrections quick and effortless. Customers can immediately receive the edited versions. However, a paper-based invoice is more of a final word as it cannot be edited once it is out. Since invoices cannot be changed, they have to be recreated from scratch even in the case of minor errors.
- Faster Payments
Paperless invoices enable customers to easily pay online. Billing software offers customers a variety of online payment options, such as credit cards, mobile wallets, direct debit, etc. In case one method fails, customers can always switch to another one to pay.
As a result, payments are fast and consistent. Moreover, billing software can automate payment collection as well. It can pull payments automatically from the customer’s chosen payment method according to their billing schedule. This is yet another aspect that traditional invoicing misses out on.
Traditional invoices need to be delivered physically, and that itself delays payments from the get go. After that, customers can either pay online, or visit their physical banks to deposit payment. The latter option adds to the delay further.
SubscriptionFlow: Your Ultimate Paperless Invoicing Solution
If you want to switch to paper-free billing today, consider signing up with SubscriptionFlow. At SubscriptionFlow, we cater to the unique billing needs of all subscription businesses, no matter their size.
Here’s a sneak peek at some of our smart digital invoicing features:
- Custom Invoices
We let you configure your invoices deeply, and tailor them to your brand. You can choose from a variety of invoice templates and themes. You can create custom templates as well. You can also add custom data fields to invoices to make the customer payment experience personalized.
What’s more, you can create unique invoices according to various customer segments. These invoice designs can be saved and set to be reused. The system can then generate them automatically, and transfer the right invoice to the right customer.
- Discounts and Coupons
Offering discounted plans is a great way to attract new subscribers. Discounts and coupons can also be offered to the existing customers as loyalty rewards. SubscriptionFlow lets you apply special discounts on select invoices too.
These discounts can vary in amounts and durations. Our software performs accurate discount billing and ensures fair pricing.
- Billing Adjustment and Proration
You can enable automated billing adjustment to manage usage-based charges, adjust subscription plan changes, correct billing errors, and handle discounts and promotions conveniently. All charges are clearly presented on digital invoices.
- Multiple Integrations
You can connect with the external software of your choice via SubscriptionFlow’s flexible APIs. We offer a wide range of integrations with CRMs, accounting, e-commerce, and tax management platforms, etc.
With these integrations, you can easily auto-sync invoices across platforms. This eliminates the need for manual data entries, and facilitates unified financial operations.
- Smart Dunning
We equip you with intelligent dunning and payment recovery tools to keep your revenue flow going strong. SubscriptionFlow auto-renews subscriptions, and flags unpaid invoices. Our system utilizes machine learning, and retries payment attempts at optimal times.
Customers can also be sent personalized payment reminders, and renewal notifications to boost payment success rates.
- Custom Reporting
Your e-invoicing data is precious, and SubscriptionFlow lets you make the most out of it. You can easily create customized financial reports based on invoice data via our custom report builder.
It lets you apply various filters to narrow down data, and choose the data fields of your choice. These reports allow you to track various subscription metrics such as your revenue, and churn rate in real-time.
Get onboard SubscriptionFlow, and get to leverage all these paperless invoicing features, and more.
