Business Hack

Small Business Hack: Automate your invoicing

Did you know that by 2019, the global marketing automation market is expected to reach $5.5 billion?

Every day, businesses around the world choose to automate some functions of their operational activities to increase their bottom line profit. Automating parts of your business is a great way to increase business efficiency, cut costs, time, and save money in the long run.

As a small business owner, you might be thinking – that sounds good, what parts of my business can I automate?

From social media to customer management to other business operations – there’s a lot of wiggle room in terms when it comes to business automation. So, a lot depends on the tools, your experience and what you’re seeking to gain from all of this.

If done well, automating your business operations might pay off in the long run and give you a ton of added benefits.

But in this guide, we’ll be mainly looking at how automating your electric invoices can benefit your business.

Why invoicing?

E-invoicing is an area that’s developing rapidly. Businesses are already making the switch to electronic invoices from the traditional paper (36 billion e-invoices in 2016 in Europe) and that trend is likely to continue increasing. The fact of the matter is that electronic invoices are just more cost-effective than paper, save time, and above all – can be automated.

This is the competitive advantage that electronic invoices bring to the table. When you automate some part of your business, you’re gaining more time to focus on something more important.

According to Adestra, marketers say the biggest benefit of automation is the ability to save time.

Makes sense, considering time is money, right?

So, you’re effectively killing two birds with one stone by automating your invoices.

But what does this process look like and how can you tell if automating your invoices is right for you?

Smoother workflow and returning clients

Recurring invoice is a type of an invoice that automatically charges a customer for goods or service during a regular interval. For example, if you’re a freelancer or a small business doing contract work, you can set up recurring invoices to be sent out automatically every month.

For a company to use recurring invoices, they must first set up an agreement from the customer to be charged on a regular basis (e.g. monthly) for a regular amount. These charges will then continue until the specified termination date.

Recurring invoices are typically used with online software business (software as a service, for example), cable companies, bills, utilities, and so on. So, essentially, you set up a recurring invoice once and let it do your work for you, while you focus on other parts of your business.

For small business owners, business on the internet can be somewhat complicated at first because of the abundance of choice. And workflow automation makes the whole process just so much easier for everyone involved.

Benefits of recurring invoices

Recurring invoices provide the great benefit of convenience.

In an ideal world, the supplier doesn’t have to wait for the customer to pay or awkwardly ask for the customer’s credit card information. Similarly, the customer doesn’t have to repeatedly keep sending manual payments.

And this is where the automated invoice comes in.

Let’s say your company provided a one year’s worth of subscription to a customer. Once you set up your recurring invoices – you’re done.

The customer doesn’t have to do anything and you don’t have to renew the details every month. And when the term is finished, the customer can choose to terminate or extend the contract.

Simple, right?

Well, having a smoother workflow is only the tip of the iceberg.

Automating your invoices also means having a stable, on-time and a verifiable payment system.

Having a late and an unstable payment schedule is the bane of most small businesses.

So, when sending out electronic invoices online, you can track them digitally. This allows you to keep tabs on your invoices, see where they go, how they affect your cash flow and more. Essentially, your invoices become one more financial KPI you can track to see how your overall financial situation is looking.

And if you’re the type of a business that goes through audits, automated invoices can brighten your day there as well. After tracking your invoices, you can then create an on-demand report to better understand your overall financial situation. By seeing the bigger picture, you can pinpoint any discrepancies or outliers that stand out and see a trend

In short, there will be no need for last-minute scrambles to find missing documents at the end of the fiscal year.

Getting on the path to automation

It’s worth noting though that like most business ventures, automation is an investment. Depending on what parts of your business you choose to automate – your mileage is likely to vary.

With that said, according to Wishpond, 75% of companies using marketing automation see the ROI pay off in just 12 months.

To be sure, automating parts of your business that have direct touchpoints with your prospects is more likely to pay off – as the interaction becomes a win-win situation. And this is the case with automating your electronic invoices as well.

Not only that, but if you also want to get an overview of your financial status – automating and tracking your electronic invoices can help you see where the cash flows to and from.

Guest Blogger: Uwe Dreissigacker

Uwe is the founder of online invoicing software InvoiceBerry. Small businesses and sole traders can create, send and manage their invoices, quotes and credit notes with the tool. In his free time Uwe travels the world and enjoys experiencing different cultures.

About Guest Blogger

Guest bloggers for the TDS Business Blog.

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