Therefore, invoicing is simply the process of issuing and recording invoices. It should be noted that an invoice is a document containing a commercial transaction and, as such, must include information about the issuer, the recipient, the product/service and any applicable taxes.
What types of invoicing are there?
In this case, there are as many types as there are criteria to be considered. For example, if we look at one of the most commonly used criteria, i.e. the type of invoice itself, we can find ordinary invoices, simplified invoices, pro forma invoices, corrective invoices, etc.
However, broadly speaking, we could divide invoicing into two main categories:
- Manual or automatic invoicing: the first, as its name suggests, involves manual work (carried out by a person, even if they use specific software and/or programmes for this purpose), while the second uses management programmes and systems to generate invoices automatically based on sales, transactions or the corresponding record. Some of the advantages of automatic invoicing include speed, minimisation of errors and better information management.
- Paper or electronic invoicing: paper invoicing is carried out in physical format (either ‘by hand’ or printed) and requires physical space for storage. Electronic invoicing, on the other hand, is carried out digitally, usually using software/online platforms. Some of the advantages of the latter include cost savings, greater security and traceability, and reduced environmental impact.
Why is it important?
Invoicing is crucial as it has a direct impact on customer satisfaction. Leaving aside the legal, tax and administrative-financial control obligations that ensure correct invoicing (which are absolutely essential), we cannot ignore an attribute that can sometimes go unnoticed: invoicing helps to improve transparency with customers and fosters the development of consistent long-term business relationships. For example, imagine that we have had a one-off problem with the software that controls stock and this mishap appears in the customer’s monthly invoice. The dissatisfaction this may cause the customer can be very high, hence the importance of accurate billing data, which can significantly contribute to maintaining trust between the parties and detecting and correcting any errors that have occurred ‘upstream’ as quickly as possible.
How does the evolution of new technologies affect invoicing?
Invoicing is constantly evolving, and artificial intelligence, together with new technologies, is giving rise to scenarios that were unimaginable just a few years ago. The article in this blog, ‘Artificial intelligence applied to invoicing processes’, outlined some of the key aspects of the present and the immediate future in terms of invoicing systems.
Finally, what does the arrival of electronic invoicing mean? What benefits does it bring?
Electronic invoicing involves a far-reaching transformation in commercial relations. The benefits are many and it is impossible to go into each one in depth here, so although we have already touched on some of the advantages of its implementation (cost reduction, increased security and traceability, and a significant reduction in environmental impact), we cannot fail to mention other aspects such as increased efficiency (as it helps to automate processes), greater transparency and fiscal control, and the facilities it provides in the fight against fraud. In addition, it allows immediate monitoring of payment terms, which has a direct and positive impact on financial management and, therefore, on more agile decision-making, something vital in today’s business world.
