Monday 12 January 2015

Role of e-Invoice in Procurement Cycle

Authored by  Junaid Khan 

Now a day’s many SME’s are becoming a part of global economy and this is the reason behind the rapid growth of ERP systems. Electronic invoicing system is one of the core functionalities of supply chain systems. Millions of invoices are exchanged between buyers and suppliers every year and many researches show that most of these invoices are in paper or in email format which maximize the work load of buyer payable department which results the sufficient increase of day sales outstanding of suppliers. On other side those supplier who submit the e-Invoice to the buyer organizations get paid faster and experience less payment issues from keying errors in the buyers account payable department.

An e-Invoice is a form of invoice document which is created electronically via the Supplier’s ERP, or software system and received by the Buyer’s ERP system or Workflow Software without any necessity of manual processing. These types of platforms also ensure the authenticity of tax compliance by using an electronic signature. There are countless benefits of e-Invoicing but primarily financial benefits of e-Invoicing are elimination of printing, scanning and mailing cost. Below please find some of the core advantages of electronic invoice.

Financial Controls: With e-Invoicing customers can send an electronic remittance advice with the payment, providing detailed accounting of invoices paid as well as debits, credits and adjustments taken.

Payment Choices: e-Invoice gives a privilege to buyer for choosing different mode of payments like Cheque or cash.

Productive Efficiency: Buyer organizations Improve accuracy resulting from e-Invoicing which reduces the amount of rework required.

Email reminders: Avoiding late payments and fees is easier when a reminder is sent out on or near the due date of a payment.

Quick Payments: e-Invoice also knocks out the delays caused by manual email, routing and sorting of invoices in result buyer can easily route the invoices for fast processing and approval because the data is immediately available electronically in their workflow systems.