The cash flow of a business is crucial to its success, yet many finance teams perhaps fail to realise its long-term significance.
Poor cash flow management can be hugely detrimental, with slow invoicing being one of the biggest mistakes companies make. Something as simple as invoicing automation can dramatically improve cash flow health and overall financial performance.
Without formal recording, companies often find it difficult to keep track of unpaid bills or money they are owed. Information about past transactions is important for predicting future financial wellbeing and ensuring there will always be fluid money to cover ongoing operations. Making payments on time helps with avoiding issues too as it’s easier to grasp a clearer picture of what is available.
A growing number of finance managers realise the need for invoicing technology, and they’re encouraging their respective organisations to invest in tools that can improve financial productivity, accuracy, and security.
In this article, we’ll discuss the benefits businesses have gained from embracing digital transformation (and specifically Cloud-based invoicing) across their finance department.
What is Cloud automated invoicing?
Cloud-based invoice processing is a way businesses can accurately save, analyse, and process invoices in an automated manner, eliminating the need for so much manual inputting from the finance team. This is why Cloud technology has become one of the most sought-after tools in the Accounts Payable realm.
The drastic change in work environments has been one of the major factors behind the increased popularity in Cloud invoicing solutions. Before, it was always necessary for management and their teams to work on-site. Since finance teams are now working from home and other remote locations, company policies have had to change.
Finance employees now require improved technology to carry out their tasks effectively and securely. Before automation, finance teams had to review invoices in a painstakingly manual fashion, trying to understand the data, then inputting it into systems to complete records. Anomalies in invoices were rarely detected, and suppliers were constantly contacted to resolve issues.
Training is a vital part of modern accounts payable processes. By capturing invoice details through automation in the Cloud, finance teams can identify duplicate invoices, extract relevant details, and create accounting entries all at the click of a button.
Problems associated with traditional invoicing methods
Given how much we rely on digital technologies today, it's easy to see the issues that might arise from using a paper-based invoicing system. The more a business grows, the more unmanageable these problems become. Here are some of the issues that arise from manual invoicing:
Lack of visibility
With paper-based invoicing, it's difficult to keep track of unpaid bills. This can cause problems with getting money. The invoice approval process becomes unnecessarily long, and it’s tricky to learn how inefficiencies can be ironed out.
Delays and late payments
A traditional paper invoice could be sent to the wrong address or get lost in the mail. The misplaced document may trigger issues that force Accounts Payable staff to spend even more time fixing the mistake. With Cloud-based invoicing software such errors can be avoided.
Storage issues
Keeping paper-based bills takes up space, and keeping track of older records can be a lot of maintenance. There's also a chance bills could be misplaced, damaged, or destroyed. This would be far from ideal when auditing.
Scalability
Companies often have a long list of invoices to clear. If there is a spike in the number of orders, then they may have to recruit more employees to cover the demand. Without modern tools in place, growth can become a burden.
How Cloud-based invoicing benefits businesses
Introducting cloud technology into the invoicing process can lead to a range of business benefits, such as:
Automate manual processes
Every minute counts when leading the finance function, which is why you need as many automation tools as you can get your hands on, and with Cloud automated invoicing, these tools usually come as standard.
Invoice reminders can be used, for example, to remind clients to pay on time when their invoice is late. Also, your Cloud-based software can automatically send an invoice on the same day every week or month if you set up recurring billing. You can speed up your processes by using online invoicing in a variety of ways, from automatic late payment fees to immediate quote-to-invoice conversions.
Clear visibility
You can see everything in one place with Cloud invoicing software. You can control all aspects of your invoicing procedures as well as your connected time-tracking and project management functions from one point of focus.
Invoice automation software also reduces human error by eliminating duplicate entries and automatically reconciling payments into your Cloud accounting software, which means all information is accurate. It provides overall better visibility for due payments so you can send reminders to your clients.
Multiple payment options
A seamless and easy invoice payment experience ensures a great customer experience. As well as simplifying the process of sending invoices, Cloud automated invoicing offers multiple payment gateways for your clients.
In addition, it allows you and your clients to choose the payment solution that best suits your needs. Customers can access their accounts and choose any mode of payment they feel comfortable with.
Rather than getting bogged down in manual number crunching, finance teams can focus on value-adding tasks thanks to automatic tracking and recording of payment details.
Access from anywhere
Regardless of where you are, you can still send invoices within minutes with Cloud automated invoicing. It doesn't matter where you are, your Cloud invoicing procedures are just the same and all the relevant data is available.
This solves the problem with traditional methods where you have to manage documents and store them somewhere safe. With cloud solutions, you will not have to worry about managing your paperwork for each of your clients.
Enhancing accuracy and efficiency
Cloud-based invoicing is a quicker and more effective method because it does away with manual labour.
Compared with conventional paper-based procedures, your clients will obtain the correct document more quickly. As a result, there are prompt payments and less questions regarding the invoice's status. A more streamlined procedure will boost cash flow increase business performance and cut expenses for your company.
Benefits of implementing cloud invoicing is that it is accessible around-the-clock and from any location. It gives your employees the flexibility to view invoicing details whenever they want. Additionally, it makes it possible for employees to work remotely.
Key features of Cloud-based invoicing
Let’s explore some of the capabilities facilitated by digital invoicing systems.
Processing online payments
If you want to make it as easy as possible for customers to pay you, give them a variety of options so you can get paid as quickly. In order to enable direct payment from customers, your invoicing system must enable online payment processing.
To make the process easier, you can include a payment link when you send your customer an invoice. By using this option, you can expedite the payment process and reduce the possibility of misunderstandings.
Integration with other systems
It should be able to easily combine your invoicing software with other business systems, such as the systems used as part of your wider accounting function. This is exactly what the Cloud provides, it ensures a seamless flow of data across several platforms and from a variety of sources.
This lowers the possibility of errors and does away with the necessity for human data entry. Efficiency and data accuracy are ensured when your invoicing is seamlessly connected to the rest of your financial data in an automated fashion.
Improved security
The Cloud is generally safer as it is accessed online, protected by the provider, and stored on a faraway server (rather than on a local machine). Invoicing software that has enhanced security gives you more confidence. Your private billing information is kept safe both when it's sent and stored. Layers of access and permission rules provide even stronger protection.
Modern software is also better at backing up your data, so that crucial information isn’t lost when disaster strikes. Cloud software is easy to update too, so it’s always compliant with the latest invoicing and more general finance-related regulations.
How Financials aligns Cloud invoicing to your business objectives
Colchester Borough Council have used Advanced’s software since 2001, including financial management, eProcurement, and Advanced Data Automation which integrates with these systems to deliver a fully automated process.
Suppliers can now email invoices to the Council, the data is then read in the Cloud, captured, stored, and entered into the invoice register for approval. It is then matched to receipted invoices in the financial management system before being processed.
“Manually keying in data from 20,000 invoices a year and scanning documents is a very labour-intensive operation. With an invoicing system in place, we can save a significant portion of time for the Accounts Payable and scanning team, enabling them to re-direct their efforts to more value-added activities.
It also reduces the risk of payment terms not being met as paper documents are not being passed around the council, and it benefits suppliers by reducing postage and printing costs.”
- Steve Heath, Finance Manager at Colchester Borough Council.
To eliminate manual invoice consolidation and gain clear visibility of your business’s cash flow situation, be sure to read more about our Financial cloud accounting software.