Paperless Invoicing: Simple, Safe & Cost-Saving

Businesses face roadblocks at nearly every corner of every process. Even something so seemingly separate from your daily activities, such as invoicing, can immensely affect your customer satisfaction, informational integrity, and bottom line.

Consequently, it should come as no surprise that more and more mid-market and enterprise businesses are onboarding paperless account payable (AP) systems to streamline their financial processes, saving time and money simultaneously.

What is surprising, however, is that small businesses with the least resources are still resisting digitizing their invoices. According to Visa, up to 70% of SMBs still use paper invoices and manual AP processing strategies.

Do you own or work for such a company? In that case, this article is for you. Today, we’ll discuss everything you need to know about paperless invoicing to join the rest of the modern market and ultimately help yourself, your partners, and the world at large.

What Is Paperless Invoicing?

Paperless invoicing can refer to one of two things. At its most basic, it simply describes the practice of digitizing your invoices to remove the most impractical and time-consuming aspects of the process, such as printing, verification, data entry, etc.

Leveraging digital invoices allows you to:

• Take advantage of 3rd party invoicing software;
• Collaborate in a unified, cloud-based environment;
• Create documents (invoices, receipts, etc.) quickly and easily;
• Streamline and automate your supplier and customer management;   
• Monitor your financial status, including expenses and inbound revenue.

This in itself can already offer incredible benefits, as we’ll discuss in subsequent sections. However, genuinely savvy business owners and AP teams can go one step beyond this and incorporate…

Paperless Invoice Processing

Paperless invoice processing refers to automating the majority of your AP activities via specialized software in order to eliminate even the most complex processes, such as invoice capture and general ledger (GL) code input.

Implementing paperless invoice processing allows you to:

• Speed up invoicing to increase visible cash flow;
• Enable supplier self-service via automated invoice capture;
• Automatically match invoices with purchase orders and receipts;
• Reduce financial and time data indexing costs through automation.

Naturally, these advanced automation capabilities come with a heftier price tag than standard digital invoicing software. Nevertheless, they can be well worth the money, especially for SMBs operating in demanding B2B and B2B2C markets.

Why Should You Invest in Invoice Digitization?

We’ve already touched on a few reasons why paperless invoicing is the better option for most businesses, from SMBs to enterprises. However, to further illustrate our point, here are the top 3 reasons that drive companies to switch.

#1: Streamlined Invoicing Process

Whether you’re personally in charge of your company’s invoice or have a dedicated AP team, you know how much of a headache invoicing can be. It’s quite an involved process, with printing, scanning, posting, processing, and follow-ups.

Consequently, it’s also expensive, both in terms of time and money. The estimates vary, but some sources claim that processing a single paper invoice can cost you anywhere around $18 and 15 days in related expenses and worked hours.

(Source: MailerToGo)

Switching to paperless invoicing can lower those amounts by around $8 and 3 days. And though that may not seem like much in terms of a single invoice, those numbers add up rather quickly in the context of a bigger billing process.

In that sense, digitizing your documents helps you remove human error from the process and frees up valuable resources you can invest in other, more pressing tasks, like closing new deals, delivering products and services, etc.

#2: Better Customer/Supplier Experience

Make no mistake, paper-based invoices can cause just as much trouble to your customers and suppliers as they do for you. After all, they have to contend with the same processing tasks that you do, which can cause delays, late payments, etc.

This naturally taxes the customer-supplier relationship, regardless of which side of the fence you’re on, and can lead to customer churn, resulting in lost deals and revenue. Thankfully, you can alleviate this by switching to digital invoicing. 

This not only speeds up your AP process and helps ensure suppliers get paid on time. It also helps you track invoice status and send automated reminders, so you don’t have to experience the pain of late payments that 73% of SMBs do every year.

Furthermore, some paperless invoice processing tools also allow you to set up a custom self-service portal for trusted, long-term partners, which lets all parties issue documents quickly and easily, without the usual email back-and-forth.

#3: Greener Future

Are you not only cost-conscious, but also ecologically conscious? In that case, you’ll appreciate the positive impact paperless invoicing has on your carbon footprint. Here are a few statistics to potentially motivate your switch.

According to statistics, the average office worker uses 10,000 sheets of paper every year, 50% of which ends up in landfills. But just by switching to digital invoicing, you can lower your paper consumption by <80%.

(Source: Basware)

In a company with 100 employees, this translates to saving 400 trees, 37,000 liters of water, and preventing the release of over 23,000 kilograms of CO2. Divide that by 10, and you’ll see the difference even a small business can make in the world.

Paper Vs. Paperless Invoicing: What’s the Difference?

Is all that information making your head spin? There’s no need to get overwhelmed. Below, we’ve compiled all the relevant information regarding the difference between paper and paperless invoices into a single concise table. Enjoy!

6 Signs You Should Consider Invoice Digitization

Now that we’ve covered the basics, you should have a good understanding of the difference between paper-based and paperless invoicing. But now you need to decide whether making the switch is something worth your while. Do you struggle with…?

• Delayed Payments — Paper invoices delay when payment terms begin, which drags out how long it takes your business to receive payment.
• Manual Work Overload — Your team spends too much time printing, mailing, and manually entering invoice data.
• Frequent Errors — Manual processes increase the chances of mistakes on invoices, which leads to disputes and delays.
• Customer Frustration — Communication with customers over billing issues is slow and error-prone, causing unnecessary friction.
• Rising Costs — The expenses tied to paper, postage, and labor for handling invoices are cutting into your profit margins.
• Customer Pushback — More customers are requesting digital invoicing and payment options to speed up the process and improve transparency.

If you answered “yes” to one, several, or even all of these, you’re not alone. According to a survey, these are the main reasons driving business owners to switch to paperless invoicing. And they mean you should consider doing the same. 

(Souce: Versapay)

The Pros & Cons of Paperless Invoice Processing

Of course, nothing is without its downsides. Although eliminating paper invoices provides plenty of benefits, there are a couple of sacrifices you will have to make to improve your invoicing process. Below is a quick overview of the pros and cons of paperless invoicing.

6 Steps How to Switch to Paperless Invoicing

So you’re set on digitizing your invoices. That’s a wise decision! However, making that happen is a significant task in and of itself. Below, we’ll detail the 6 steps you need to take to ensure the transition is as smooth as possible.

1. Assess Your Invoicing Needs and Select the Right Type of Solution

First and foremost, you need to determine the type of paperless invoicing solution your business needs. Start by considering your usual procedure. How many invoices do you handle per month? Do you need advanced features like invoice matching?

Depending on your answers, you’ll decide between one of two types of invoicing systems. These include:

• Basic Digital Invoicing Tools: These are great for small businesses that want to digitize their invoices and send them electronically but don’t need complex automation.
• Full Automation Systems: These solutions automate invoicing, including data capture, GL coding, and payment reconciliation. This option is ideal for larger companies or those with high invoicing volumes.

Pick a solution that fits your business size and future growth. For SMBs, starting small and scaling up later can be a cost-effective strategy. However, remember that switching solutions too often can cause its own share of problems. 

2. Research Providers and Test a Free Trial

After settling on a particular solution, you can shortlist potential suitable vendors. Your goal is to carefully consider each provider’s offering and eliminate them from the list until you’re only left with up to three contenders. To do this, you should:

• Look up / ask for recommendations
• Read reviews and consider user’s experiences
• Consider the provider’s features and capabilities.
• Sign up for a free trial and experience the solution yourself.

Getting hands-on experience is one of the best ways to evaluate a solution efficiently. Thankfully, most vendors nowadays offer some sort of free trial, which means you’re only limited by the amount of time you’re willing to spend experimenting. Consider:

• Ease of use for your team
• Customer support responsiveness
• Compatibility with your current accounting process

3. Prepare Your Customers and Vendors for the Switch

As mentioned, your company’s accounting is not a single-party issue. If you want to maintain business fluidity, you need to keep your suppliers and customers in the know to ensure no miscommunications or mistakes occur. To do this, you should:

• Send Early Notices: Notify your customers and vendors well in advance. Include an FAQ explaining the transition, what they need to do, and how it will benefit them.
• Offer Assistance: Provide clear instructions for using the new system, and let them know who to contact if they have any questions. This will help ensure a smooth transition without disrupting your relationships.

4. Create a Detailed Implementation Plan

A successful switch requires a clear, step-by-step plan. Outline key milestones, including when you’ll be selecting your software, testing it internally, and when you plan to roll it out to your customers. Key components to include in your plan:

• Timeline: Set realistic deadlines for each phase of the transition.
• Budget: Determine costs for training, as well as software and hardware fees.
• Integration: Plan for any integrations required with your existing systems.
• Responsibility: Assign specific roles to team members, if applicable.

5. Train Your Team on the New System

Even the best paperless invoicing solution won’t deliver results unless your team knows how to use it effectively. Schedule training sessions to get everyone on board, and ensure they understand the new workflows. Training should cover:

• Basic Functions: How to create, send, and manage invoices.
• Automation Features: Including invoice matching and approval workflows.
• Troubleshooting: Resources to handle minor issues on their own.

6. Roll Out the System and Monitor Progress

When everything is set, it’s time to roll out the new system. Start with a phased approach to minimize disruption. For example, roll it out to a small set of customers or a specific department first to catch any issues before a full-scale launch. Here are a few tips:

• Run Parallel Systems: During the initial phase, run your old paper-based invoicing system in parallel with the new digital one.
• Collect Feedback: After a few weeks, gather feedback from your team, customers, and vendors to identify any challenges or areas for improvement.
• Track KPIs: Monitor key performance indicators (KPIs) such as processing time, error rate, and cost savings to measure the effectiveness of the new system. 

Once you’ve ironed out any problems in the initial roll-out, you can move forward with full adoption, confident that your paperless invoicing process is optimized.

Eliminate Paper Invoices with Billdu

Ready to kick off your switch to paperless invoicing? In that case, why not start by trying Billdu’s Invoicing Software for Small Businesses? Starting at just $5 per month and with a 30-day free trial for every subscription plan, Billdu lets you:

• Automate document creation with auto-fill,
• Save clients and templates for future use,
• Track invoice status and payments,
• Add multiple payment methods,
• Send automated reminders,
• Onboard accountants,
• And more!

Or, if you prefer to start things off slowly, consider trying out one of our easy-to-use invoice template for Word, Excel, and Google Docs. Improving your invoicing process, customer relationships, and carbon footprint is easier than you think!

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