Emailed
invoices
Sending an invoice via email is usually
done these days by attaching the invoice as an Adobe PDF document. This allows
the invoice to be sent cheaply and quickly to the recipient who can use a free
product (Adobe Acrobat Reader) to open and view it. The simple idea here is that
once the customer has reviewed the document (and even saved it to his or her
hard drive) he or she can then pay it. In theory (especially in Business to
Consumer or B2C markets) the invoice is not only sent out quickly (and at much
lower costs than traditional invoicing methods) but means that the customer can
send back a check or phone in a credit card payment within hours or just a few
days (and well ahead of the latest date he or should could technically pay)
thereby helping to accelerate merchant cash-flow. Unfortunately, although this
works in some situations, the process is rarely this smooth and a number of
problems can occur.
Firstly, the merchant needs to have a
customer’s email address to be able to send a PDF. Secondly, the PDF is still a
flat document which most customers will not only have to open, but will often
print and put in a pile to deal with later, when they are ready (just like
receiving the paper-based invoice in the mail). This means that the customer
may wait as long as they did before to pay the invoice (assuming they do not
lose their printed piece of paper in the meantime having deleted their original
email). In addition to all of this, an emailed PDF does not encourage the
customer to pay by electronic means any more than an invoice arriving in the
mail does. Research suggests that customers actually often like to have the
option to pay online by debit or credit card for example and can often only do
so by calling the merchant (and having to spend time and effort, and within the
hours of business operated by the call-center). Finally, in Business to
Business (or B2B) invoicing, the emailed PDF presents a whole new layer of
challenges as these often require a digital signature. PDF technology is now
much better at allowing digital signatures to be securely added to invoices
when they are sent in the mail. However, the process is by no means simple and presents
many logistical issues, particularly when multiple approval signatures are
required.
Digital
invoices
A digital invoice is available at a web
site. Sometimes this is embedded in part of a merchant’s web site or it is
“hosted” on a third-party web site (to which customers can go directly or can
be redirected from a link on a merchant’s web site). In most cases, the digital
invoice rendering process is even quicker than emailed invoices, as there is no
need to generate a PDF and attach it to an email address. In addition, although
a customer may be notified that a new invoice is available via email, it is not
necessary to have an email address (as the customer can be notified about the
web address by normal physical mail and then subscribe to the web site service
to be later notified by either email or even their mobile phone –via SMS). In
practice this means that digital invoices will often collect or “scrape” new
email addresses from customers progressively.
Perhaps most importantly, a digital invoice
is viewed in a truly online way (and does not require printing (as it can be easily
stored and retrieved permanently or resent by a merchant at almost no extra
cost). This means that not only can the customer view the invoice (in as much
detail as they wish) but they can use many online features to both deal with
the invoice (save it, schedule it for later payment or send it on for viewing
or approval to another person) or even just pay it immediately of course. And
if they do choose to pay it immediately, they typically get to do so via their
debit card if they want to use their current bank account or by a variety of
credit card options (and in some cases even by cash by printing out a voucher
and taking it to a local newsagent or local store that takes cash payments).
This is therefore much more likely to accelerate merchant cash-flow than in the
emailed invoice situation and means that the payment is much easier to
reconcile (as less difficult to reconcile checks or phone-based payments are
being made). Finally, the invoice recipient (whether it is a B2C one or B2B
one) can elect to pay a bill 24/7 as the bill presentment and payment web site
is truly “open-all-hours”.
Conclusion
Emailed invoices are superior to
traditional invoices sent in the mail. However, they fall far short of full
digital invoices, which offer many additional benefits (which translate into
much greater time and cost saving for the merchant). These two approaches are
therefore far from equivalent and a merchant can realize considerable
advantages by upgrading from an emailed invoice to a full digital one.
Thank you for sharing excellent informations. this would be a great solution for all invoicing issues.
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