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4 minute read

Perks of Adopting eInvoicing to Get Paid Faster

  • Learn how switching from paper-based invoicing to einvoicing can help in speeding up your AR process.
  • Explore the benefits of adopting einvoicing to further advance your AR and improve your teams’ working efficiency.

Did you know that relying on traditional processes can put your AR at risk? When it comes to manual paper-based invoicing, most mid-sized companies rely on outdated methods and limited resources for invoice processing and delivery. Many mid-sized businesses are spending large amounts of time and effort on manual invoice handling. On average, it can take up to 25 days to manually process a single invoice. Imagine having hundreds of such invoices piling up daily to get processed.

 

For mid-sized businesses, things get even tougher with an increasing volume of customer base. With limited resources, AR teams are unable to handle the increasing number of invoices. Any error in processing and delivery of invoices ultimately maximizes the Days Sales Outstanding (DSO). This delay in invoicing a customer can have negative effects on your working capital and cash flow. 

Source: PYMNTS

At HighRadius, we guide our customers to establish proactive invoicing with RadiusOne eInvoicing and Collections App. It can automate your invoice delivery via e-mails and AP portals that could minimize the operation costs and help in getting paid faster.

Let’s take a look at the struggles that mid-sized businesses face because of manual invoicing

Major Challenges in Manual Invoice Processing


  • Longer Processing Time with Paper Invoices- Manual invoicing requires a lot of time, especially if the invoices are paper-based. Waiting for invoices to get delivered stretches the overall time-to-cash and causes the AR closing rate to slow down. On top of that, paper invoices are very expensive as they are sent physically via snail mails or fax. For customers who have to pay for multiple invoices, the bulk delivery of invoices gets complicated.

Source: PYMNTSfirst

 

  • Unorganized Record Maintenance- Maintaining a record of financial transactions, customer data, and invoice details manually can get complex and error-prone. Missing data or entering wrong information can cause huge financial and legal problems in the short as well as long run. Further, if the data needs to be stored physically, a paper-based filing system could incur significant costs and space.

 

  • Disoriented Data Aggregation with Lack of Visibility- Gathering data such as shipment details, order details, supply details, and address of the customer to create invoices can get extremely difficult if the data is stored at different locations not accessible to every team. When the data is scattered across different departments and not stored in one single accessible location, it creates huge miscommunication within the teams and delays the process even further. Due to the lack of a standardized invoicing approach, it becomes difficult for c-suite to keep an eye on everything.

  • Stacked Up Invoices- A rise in the number of invoices creates frictions in the AP process. The increased number of invoices makes it harder to manually enter and process invoices in the AP portals with a limited workforce. 
  •  
  • Overhead Costs of Paper-Based Invoicing- Processing paper-based invoices and rectifying the errors can cost a lot to a company. On average, processing a single paper-based invoice can cost anywhere from $5 to $10. And, since the invoices are only increasing due to business expansions, the overhead cost increases too. For most mid-sized companies that rely on a small cash buffer, it’s crucial to identify such revenue leakages to avoid any downstream impact on the working capital.
  •  

Now that we have understood the challenges and impact of manual invoicing on AR, let’s take a look at how we can resolve these issues.

 

eInvoicing: A New Way to Move Forward

New-age adaptive technologies have enabled businesses to rely on automated solutions. This is to eliminate manual and clerical work and focus more on strategic and value-driving tasks. Growing businesses are looking for new ways to upgrade the current AR process to make it more efficient and faster.

Source: PYMNTSsecond

 

eInvoicing in general means to electronically share and display invoices to the customers. It helps in automating the invoice delivery, reducing the chance of physical damages to the invoice, and ensuring easy access at lower costs. Here are ways to enable einvoicing.

 

Introducing eInvoicing

 
  • Automated Invoicing via email- Sending invoices through emails to each customer can get tedious when it has to be done manually. The HighRadius RadiusOne eInvoicing and Collections App enables mid-sized businesses to automatically send the invoices to their customers via email without any external effort. With this technology, the AR team can access all the invoices across customers with a single click, send the email correspondence with attachments en masse, and keep track of invoice delivery.
 
  • AP Portal Integration- AR analysts have to push invoices or account statements into customer portals, accounting software, or AP portals manually. This gets very complicated when the volume of invoices increases and the statements have to be uploaded in bulk. Adaptive AR solutions can help mid-sized businesses to easily post the information on AP portals for the customer to view and make payments conveniently.
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Perks of eInvoicing with AR Automation

Using the techniques mentioned in the previous section, the whole process of invoice handling and delivery can be automated with less operational expenditure. And that’s not just it, there are more benefits that you can achieve by adopting einvoicing. 

 

Source: PYMNTSthird

 

Let’s take a look at the benefits of einvoicing. 

  • Minimized Days Sales Outstanding (DSO)- Automation can help in decreasing the overall time to create invoices by minimizing human intervention. Manual data aggregation is error-prone, causing a lot of friction that could be eliminated. 

Since the analysts do not have to devote their time and effort in manually aggregating data, sending the invoices to individual customers, and rectifying errors the AR can be closed faster, thus reducing the overall DSO.

  • Reduced Operational Expenditure- eInvoicing could also reduce operational costs including paper costs, printing costs, and mailing costs. The cost of creating and rectifying errors about paper invoices can also be eliminated which can save mid-sized businesses a lot of money. According to Pymnts, 35.5% of the firms are going to implement einvoicing in the coming years to reduce the manual tasks required in the process.

  • Sending Bulk Invoices- Multiple invoices associated with the same client could be sent together in bulk without any human intervention via e-mail or AP portals. Automated solutions such as HighRadius’s RadiusOne Solutions for Mid-Sized Businesses could also enable faster cash conversion with automated remittance aggregation, invoice matching, and zero-touch cash reconciliation.

 

Conclusion

It is evident that the AR processes have been negatively impacted by the manual invoicing process. As an alternative approach towards the AR and AP processes, einvoicing has been significantly more impactful to turn the tide towards positive results. It is cost-effective, takes less time to process, closes AR faster, and reduces DSO.

Take a few minutes to help us understand the problems you face with your current process:

  • Do you face delays in sending out invoices?
  • Is your team unable to scale with the increasing volume of business transactions?
  • Does your AR team spend more time on Invoicing than cash application, credit, and collection process?
  • Is your AR system unable to keep up with the volatile market?
  • Do you think it’s the right time to upgrade your AR Management?

Want to learn how to enhance your einvoicing adoption? Check out this blog on 6 Best Practices To Boost eInvoicing Adoption

The Time to Start Automating Your AR is Now!