Online invoicing vs. electronic invoicing
Online invoices and electronic invoices may sound like the same thing, but they aren’t. It’s important to know the difference between invoicing methods so that you invoice your client in the appropriate format.
This article explains how online invoices and e-invoices differ, how each is used, and the benefits of digitising your invoicing process.
An online invoice is simply an invoice you have created using online invoicing software. Your online invoice template should include all of the fields necessary to be compliant with the law.
An online invoice can be emailed to your customer, often directly from your invoicing software. It’s also possible to download a copy of the invoice to your computer to print or send separately. Depending on the software you use, your customer may be able to make an immediate online payment via the invoice itself.
Using online invoices makes it easy for you to communicate with your customer. A quick email with the attached invoice is all it takes to request payment, without needing to organise and file additional paperwork. Therefore, online invoices save both time and costs.
Whilst paper invoices may seem like the easiest way to manage your invoicing at first glance, using online invoices will simplify your administration and speed up the sales process. With online invoicing software, the information you have saved, such as customer details and products, can be automatically populated into the online invoice template with just a click.
In addition, online invoices reduce paper use. Both the buyer and seller will benefit from digitised invoices as there’s less chance of them being misplaced or overlooked. Payments will therefore be processed faster.
Using online invoicing software will also give you more reporting capabilities. You’ll be able to sort your invoicing data by date, client, job, or any other metric you choose. You’ll also be able to see which invoices are paid, pending, and overdue. Organising your data digitally will give you a clearer picture of your business’s cash flow projections and simplify your accounting processes.
However, using online invoicing software does not automatically mean any invoices you create are electronic invoices.
Electronic invoices, also known as e-invoices, are a specific type of digitalised invoice. E-invoicing is the exchange of the invoice document between a supplier and a buyer in an integrated electronic format. Sending an e-invoice is an EDI (electronic data interchange) transaction and is common practice for B2B sales.
An electronic invoice should contain data from the supplier in a format that can be entered into the buyer’s accounts payable system without needing any data input from the buyer’s accounts payable administrator.
The electronic invoice contains structured invoice data and is sent in EDI or XML formats. It should be issued using standard internet-based web forms. These formats allow the seller to sign off on the invoice, and the time and date the invoice was sent is recorded. Once issued, the e-invoice cannot be changed.
Regarding the content of an e-invoice, it needs to contain exactly the same legally required invoice information as any other online or paper equivalent.
Companies can benefit from electronic invoicing as it removes paper documentation and manual processing from the invoice process. Moreover, both parties will benefit from superior levels of integration between the seller’s invoicing software and the buyer’s business systems.
As a supplier, if you use e-invoices, you’ll see faster payments from your clients as customers can easily route your invoices for fast processing and approval as the data is immediately available electronically in their workflow systems.
E-invoicing does not require the buyer to manually re-key the data, minimising data entry errors. Invoices are therefore less likely to be rejected and can be processed immediately. This will speed up the buyer’s invoice processing and improve the seller’s cash flow.
Productivity may also increase. With electronic delivery of invoices, you know exactly when your customers received their invoices, reducing the need to chase up payments.
In summary, e-invoicing improves accuracy and reduces the amount of manual work that is needed.
Digitised invoices will improve customer satisfaction. If you provide your customer with online invoices or electronic invoices, it will reduce payment issues, meaning that customers will receive the level of service they deserve.
It will also make it easier for customers to understand their invoices and keep accurate records of their transactions with you. Ultimately, this will lead to less customer churn.
Online invoices refer to invoices that you have created using online invoicing software, like SumUp Invoices. They digitise your invoicing processes and simplify the sales process.
E-invoices also simplify the invoicing process but are most common for B2B transactions. They require greater integration between the buyer and seller’s systems.
SumUp Invoices is invoicing software that helps you create online invoices quickly. Our simple invoice template ensures that each invoice includes the mandatory fields and that your invoices are always compliant.
You can create invoices from anywhere, on your computer, phone, or tablet, and send them directly to your customer’s email. You can also choose to include an online payment link directly on the invoice so your customer can pay instantly with a credit card.