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.