Electronic invoicing (otherwise known as e-invoicing or einvoicing) is a type of electronic billing designed to facilitate the payment process and associated workflows. Trading partners, such as freelancers and their clients, use electronic invoicing systems to present and monitor transactional documents and ensure that the requirements of their trading agreements are followed through completely and successfully.
At their core, electronic invoices are digital documents that freelancers use to bill their vendors and clients for products or services rendered. Electronic invoices are a way to, digitally, initiate transactions between freelancers and the people who pay them.
Across industries, there are a variety of digital examples of invoices, but not all of them are genuine electronic invoices. In order for a bill to be considered an electronic invoice, the document must first be issued electronically and must also be capable of digital or automated processing. For instance, PDFs and printed invoices that have been digitally scanned do not reflect true electronic invoicing, as both examples represent instances in which an invoice was either not initially processed online or is not capable of being processed electronically using digital invoicing software due to its non-standardized format.
Often, organizations and freelancers alike use electronic invoices to streamline and automate their digital payment workflows. Through the cost savings afforded by electronic invoicing, freelancers are able to allocate more time and resources to other areas of their businesses.
In addition to the insight provided into profit margins and workflow overview granted by the method, electronic invoicing also allows freelancers to maintain more accurate invoices and increase the traceability of their payment processes, which becomes essential as freelance operations begin to grow and expand.
With so many freelancers operating on a remote, digital-only basis, the flexibility afforded by electronic invoicing facilitates an even smoother transition into current industry workflow patterns. Touchless operations further contribute to a better cash flow as freelancers can dedicate financial resources based on smarter, more informed business decisions.
For freelancers who simply no longer have the bandwidth to manage the financial side of their operations, electronic invoicing enables them to automate the payment process. By doing so, freelancers are given the flexibility to better organize their tasks, strengthen other areas of their workflows, and catch up on late orders.
By eliminating the elements of paper and manual processing from the invoicing process, freelancers end up saving significant amounts of both time and money. However, the true value of electronic invoicing lies in the level of integration your freelance operation can achieve—not just with your clients, but also with your invoicing software and other business processes.
For freelancers utilizing more advanced business management tools, such as AP automation solutions, integrating electronic invoices directly into current payment workflows can further facilitate touchless invoice processing.
Sending and receiving electronic invoices is an important first step in initiating the digital transformation of your freelance business, and it’s also a crucial element in ensuring your critical business operations are efficient and scalable enough to support future business growth and development.
Depending on the program you used to process and manage your payments, your electronic invoices can be created in a variety of ways.
For many invoice management systems on the market today, programs offer in-platform invoice creation tools that can be used to brand the experience for customers while maintaining a one-stop payment solution that’s easily accessible to either side of the transaction.
Some additional benefits of working with an all-in-one invoice management system include automated payment reminders, upfront deposits, and retainer management.
For programs without in-platform invoice creation tools, a helpful place to begin with creating your electronic invoice is with the required format of your chosen invoice management system. If your system requires a .xls (Excel) or .csv (plain text) file, consider building your invoice using either Microsoft Excel or Google Sheets.
Once you’ve created a template with a design that suits the needs of your business and reflects your freelancing brand, you can export your template as either of these required file formats to upload to your chosen invoice management system for processing.
To create your electronic invoice using Microsoft Excel, choose from a library of templates that will serve as a foundation for your final invoice design. For more creative freelancers, you can also begin your invoice design from scratch. From there, customize the invoice to reflect your freelancing brand, and then ensure all details relevant to the transaction are included prominently on the document.
To create your electronic invoice using Google Sheets, the process remains much the same. Users are able to choose from a modest selection of pre-designed templates to build their invoice—or they can opt to build their own original design from scratch. Once freelancers decide how they will compose their document, they can begin to brand the invoice before updating the file with all information relevant to the transaction.
For all invoices, key elements include the following:
With electronic invoicing, functionality is crafted with ease-of-use in mind. For freelancers looking for a quick and easy way to bill clients for products and services rendered, electronic invoices provide a solution that’s supported by features that enable transparency and traceability throughout the payment process.
By choosing to implement electronic invoicing into their payment workflow, freelancers benefit from an invoicing solution that’s easily sent to clients straight away, enabling clients to pay in a way that’s convenient and accessible to them. When the process is done right, clients enjoy a more pleasant payment experience, and freelancers are paid more quickly.
The method that you use to send your electronic invoices to clients will depend on how your invoice was created, as well as how you choose to manage your payment process.
If you depend on an all-in-one invoice management system as your primary payment solution, the process of sending your electronic invoice should be fairly automatic. Once your invoice has been updated with the most recent transaction and is ready to be sent out for payment, the system will send the invoice to your client for their review. From there, the client can initiate the payment directly through the platform.
For invoices created in a third-party platform such as Microsoft Excel or Google Sheets, the process is similar. Once the invoice has been created using either of the platforms’ array of editing and customization tools, users must remember to export their invoice as the file format required of their invoice management system.
From there, invoices can be uploaded directly to the invoice management system and sent off to the client according to the program's specific file sharing process. Clients can initiate transactions according to the payment terms outlined in your invoice, which you should designate as you build your invoice template in your chosen creation tool.
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