E-invoicing and Email Pdfs, They’re Not the Same
Invoicing is an essential practice for any business. It’s how the company receives payment. This process can be very time consuming and prone to errors if not done correctly. When choosing how to streamline this activity, there are some factors to consider.
Many small businesses choose to generate an email in a word document, convert it to a PDF, and send it that way. That’s fine, and there’s no problem with that. However, sending an invoice using invoicing software does more than just forward a bill for payment.
The differences between e-invoicing and email pdf are that one is automatically generated, and one is a manual function.
Understanding the differences could show you why you should use e-invoicing for your company in place of PDF invoicing.
Structured Data Versus Unstructured Data
To know the difference between each invoice is to get your head around structured data and unstructured data. One is automatically generated, not touched by a person, and a human has manually created the other.
Structured Data File
Electronic invoices are structured data files. These files source information automatically from your database. This process does not require additional manual input from a person.
The invoice can then be sent directly to the client’s accounting system. This process is fast, cheap, and has a minor margin for error.
Unstructured Data File
Unstructured data is data that is manually entered into a system. An invoice is then created from this data and converted into PDF format to forward on to the client. Think of a PDF file as a giant photograph of another file. That’s all the other person is receiving.
This can be a time-consuming option as you are relying on a human to source the data. Human intervention can also open the door for mistakes and fraudulent activity.
Checks and Balances
In this technological age, data fraud is a battle being waged by many organizations. Because of this, validations are vitally important. This is where pre-receipt checks come in. For structured data files, these checks come in the form of:
- Is there a PO?
- Does the invoice qualify as a legal document?
- Is the supplier legitimate?
An unstructured data file has no automatic checks in place, once again allowing for human error or inappropriate activity.
The Customer
When choosing whether to send an email PDF or an e-invoice, consider the customer who receives it.
Online invoicing for small business software generates an automatic invoice that will go directly to your client, into their system. There’s no additional handling required at the other end.
An email PDF, on the other hand, will most likely need some form of data input at the other end, even if it is just copying and pasting. There’s room here for data entry errors, innocent or otherwise.
Confirmations
How often have you had a client say, “I didn’t receive your invoice?” This is a common way to get a payment deadline extension.
E-invoices are transmitted via a network or portal, confirming that they have been received at the other end. Sending an invoice in PDF format, whether by mail or electronically, allows for the receiver to deny getting it. Even email ‘read receipts’ can be switched off at the other end.
The Cost
Here’s where e-invoicing is miles ahead of email PDFs. Automatic processes are time-saving, which means cost-saving. For instance, recurring billing using invoicing software makes sense. It’s estimated that an e-invoice costs between $.50 and $1.50.
Generating manual invoices then converting them into PDF format, and then sending them out, is three steps and requires a lot of time from one individual. Invoicing software can handle many of these same transactions, with greater accuracy, in much less time.
So Which Should You Choose
It’s a personal choice, but you need to consider the factors in play here. If you’re a very small business or sole trader, perhaps manual invoicing is ok for you. However, there’s still a person involved, allowing for errors to occur.
For evolving companies, it makes sense to grow your business with e-invoicing. The process is automated, allows for official checks to be made, makes life easier for your customer, and is so much more cost-effective.
The number one thing to consider is how important it is to remove the human involvement. For accuracy and reducing fraudulent activities, relying on an automated system will help to alleviate these issues.
This is all about productivity. Use your people to provide sales and service, and automate more of your accounting functions. Move away from old-style PDFs and open the door to e-invoicing.