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What Is Electronic Invoicing?

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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 21 November 2016
  • Copyright Protected:
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    Conjecture Corporation
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Electronic invoicing is refers to a practice of sending an invoice via email, instead of sending a paper invoice or bill in the mail. Businesses often provide their customers with the option to receive their invoice or bill electronically or via regular mail. Electronic invoicing offers advantages and disadvantages to both the businesses that are using this method of billing and their customers.

One of the primary benefits of using electronic invoicing is the cost savings. It saves the business that is sending out invoices the paper and ink to create the invoices and the envelopes and postage to mail them. Electronic invoicing typically uses an invoicing software that sends out the invoices according to schedule, so it also saves employee time. When the business cuts costs by using electronic invoices, they can pass some of these costs savings along to their customers in the pricing of the company’s products or services.

Receiving an electronic invoice is also much more convenient for customers to pay. Some companies include a link directly in the electronic invoice that allows the customer to pay directly from the email. Other companies have agreements with banks that offer bill pay service to their banking customers. The electronic invoice goes as a reminder to the customer’s bank account and then the customer can schedule the payment via their online bill pay with his or her bank.

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Electronic invoices and electronic payments save the customer money and time. It is faster and less expensive than having to write out a check and pay the postage to mail it. It also reduces paper waste and clutter at home, as statements are typically stored online by the company.

For the business using electronic invoices, it also means that they receive the payment much faster. Typically, when an electronic invoice is sent and the customer makes the payment electronically, it provides immediate receipt of the money to the business.

While electronic invoicing has many advantages for businesses and customers, it does have some drawbacks. Some customer have problems receiving the electronic invoices because of spam filters of email Internet Service Providers (ISP). If the customer does not receive the electronic invoice, then they may forget to pay the bill and this can set late fees and charges into motion.

Security is another issue that customers may have a fear about when using electronic invoicing. As long as the business is using a secure server to send the invoice and receive electronic payments, then it is safe to receive invoices and make payments online.

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