How to use e-invoicing and automated approvals for rapid AP processing
E-invoicing has been generating a lot of buzz the accounting community, but what exactly is it? Read our article to learn about the benefits of e-invoicing and whether it’s compatible with approval automation.
What’s e-invoicing and how is it different from sending invoices by email?
It sounds pretty obvious: e-invoicing is sending and receiving invoices electronically, however, it does not meany doing it via email with a PDF attachment. It is a far more efficient tool, and utilising it can make your invoice processing much simpler.
E-invoicing allows invoices to be sent straight from the supplier’s accounting system to the buyer’s accounting system. This means the buyer does not have to deal with it manually, and the supplier has an easier way of dispatching it. All the invoices are effortlessly transformed into draft bills in the accounting system automatically, making the process seamless and effortless.
One benefit is that it’s platform agnostic. That means the buyer and the supplier do not need to use the same accounting system. As long as both accounting systems use the global Peppol network, invoices can be effortlessly exchanged no matter who you’re doing business with – no compatibility issues, no hassle!
How e-invoicing works in Xero
E-invoicing is included in all Xero subscriptions, so you don’t need to pay extra for it or purchase any additional services. However, you need to register to start receiving e-invoices. After that, all invoices you receive via e-invoicing automatically show up as a draft bill ready to be approved in Xero. This saves you time as there’s no need to enter bills manually, which reduces the risk of error.
As of January 2023,Xero offers e-invoicing in Australia, New Zealand, and Singapore, with plans to expand it into other countries.
Why e-invoicing is the future of accounting
The widespread adoption of e-invoicing is a gradual process and it is yet to be embraced globally. In countries where it is more common, adoption is still to go mainstream. For e-invoicing to reach its full potential, it’s crucial for governments, large corporations, and small businesses to acknowledge its benefits. Despite the slow growth, we firmly believe that e-invoicing is the future of Accounts Payable (AP) and Accounts Receivable (AR) for the following reasons.
You’ll reduce the amount of manual data entry
When you receive a pdf in the email or a paper invoice, you need to open it and enter all the details into the accounting system. E-invoicing eliminates the need for this manual entry, both saving valuable time and decreasing the risk of error.
Invoices will be paid faster
Since it’s easier to process an e-invoice, it’s much easier and quicker to pay them on time. The recipient gets a pre-populated bill, ready to be approved. If you’re dealing with hundreds of invoices, the time savings become immense. Moreover, some government agencies are already committing to faster payment times.
The cost of doing business is lowered
Even if you’re not sending any invoices or receiving only a few, switching to e-invoices can lead to significant savings. According to Deloitte, each time an invoice is delivered via e-invoicing network instead of email, it can save you up to $20.
Peace of mind with enhanced security
E-invoicing is more secure than sending documents via paper or email, because the invoice exchange happens through a secure network without any human interaction. It decreases the risk of fraud, as your documents end up exactly when they need to be.
How does ApprovalMax work with eInvoicing?
E-invoicing is a great way to send and receive invoices which potentially will eliminate the need for data entry tools, but what does it have to do with bill approvals?
If a business needs to keep tight control of its spending, the idea of invoices popping up in their accounting system without any human intervention may seem risky. When a bill needs to go through a round of authorisations, it is not possible to approve it directly in Xero. This is where ApprovalMax comes in!
When you use ApprovalMax with Xero and you receive an eInvoice, it arrives in Xero as a draft with the status of “Awaiting approval”. After this, ApprovalMax will automatically pick up the invoice, wait for an approval decision, and then push it back to Xero with the status of “Awaiting payment” when the approval process is complete.
ApprovalMax is the leading approval app in the Xero ecosystem for Xero bills. Adding it on top of using Xero’s eInvoicing functionality helps businesses and accountants save even more time and money.
For those using eIvoicing in Dext Prepare, ApprovalMax works just the same. It can pick up invoices both from Xero and directly from Dext Prepare if the direct integration is enabled.
Can we use ApprovalMax if we’re not using eInvoicing yet?
Yes! ApprovalMax supports eInvoicing, but eInvoicing is not a prerequisite for using ApprovalMax. Thousands of businesses and accounting firms globally are using ApprovalMax as a smart and efficient solution for managing the approval process. It streamlines the process of approving invoices, expenses and other financial documents, saving you time and reducing the risk of errors. With ApprovalMax, you’ll be able to say goodbye to time-consuming manual processes and hello to effortless, stress-free approvals!