SMALL BUSINESS RESOURCES

Online invoicing: e-invoicing guide

4 min read

Does your small business issue invoices to get paid? If so, you should seriously consider the benefits of online invoicing (or e-invoicing) to boost your cashflow.

Over the past few years, digital invoices have replaced manual invoicing. That means the savvy small business owner should be replacing their old methods and embracing e-invoicing.

Let’s unpack how e-invoicing works and the many benefits it holds over traditional invoicing practices.

What is online invoicing?

Online invoicing is a method of creating, sending, and tracking invoices using invoicing software. The simplicity of business-to-business e-invoicing stands in contrast to the convoluted manual or paper-based invoicing process.

With online invoicing, when both parties are using cloud accounting or invoicing solutions, you can send your invoice directly to their software. This skips PDFs, emailing, scanning and manual payment methods.

With online invoicing, you no longer have to:

  • use manual invoice templates
  • create PDFs
  • email your invoice
  • print and mail invoices
  • scan or manually input invoices 
  • manually report or manually send reminders.

How does online invoicing software work?

Online invoicing software works by creating an invoice from your invoicing or accounting software. This invoice is then sent directly to your customer’s own solution. From there, payment can happen in just a few clicks and the transaction is simple.

With e-invoicing, you’ll no longer have to fill out an invoice template and email or mail invoices. Your customer will never have to scan and file invoices and then pay manually. 

Most modern accounting and invoicing solutions will offer e-invoicing functionality and this method is quickly replacing antiquated manual invoicing processes.

Will it be mandatory for small businesses to use e-invoicing?

For now, there are no plans in the UK to mandate the use of e-invoicing in the small business community.

It should be noted that with recent schemes such as ‘Making Tax Digital’, we’re seeing a move toward digital tax records. This includes digitally held and transmitted sales and tax documentation. 

So, at this stage, it’s not mandatory, but still highly recommended. Online invoicing will help futureproof your business from any upcoming digitalisation plans by the HMRC. Additionally, e-invoicing improves and automates the entire invoicing lifecycle, making it a simpler affair for all involved.

What are the benefits of e-invoicing?

There are many benefits to e-invoicing when compared to manual invoicing processes:

  • You significantly cut down on administration and manual processes for both parties.
  • Your invoices will be more accurate with pre-filled automation.
  • You can include a ‘pay now’ button which makes payment simple, quick and reduces turnaround times.
  • Your cashflow will be boosted through swifter invoice sending on your end, and faster payment on your customer’s end.
  • You can issue invoices from anywhere using a mobile device.
  • You’ll have automated built-in reminders which reduces the burden of chasing payments.
  • Reporting and compliance tasks, such as VAT concerns, become simpler and more transparent.
  • Accounts receivable reports are automatically created. With inbuilt reminders, you can reduce your accounts receivable burden with ease.
  • With sending reports and read receipts, you can be confident that your customer has received and read your invoice.
  • You’ll exude a much more professional image of your business when you embrace e-invoicing. This will lead to increased customer satisfaction and repeat business.

Where can I send invoices for free?

While not 100% free, Reckon One offers unlimited online invoices for as little as £6 per month. If you would like to trial the software for free, you can download a trial and put it to the test in your own small business.

This concludes our brief guide on e-invoicing and online invoicing. If you need more information on invoicing, how it works and what you need include, please consult our full small business guide to invoicing in the UK.

Free downloadable invoicing template

Our free invoicing template gives you a professional looking layout that you can fill in your company and customer details, and information about the product or service you’re selling. Save time on manual processing, so you can focus on growing your business instead.