Most companies struggle with revenue collection—which is dependent upon timely invoicing—almost as much as their customers struggle with making payments on time.
In an increasingly digital and mobile-driven world, there are many options to make revenue collection easier. Across the globe, businesses are looking at electronic invoicing and electronic payments as two ways of streamlining revenue collection for themselves while delivering a better experience for their customers. Businesses that are looking even further ahead are already beginning to invest in mobile payments as well. According to a recent Capgemini report, mobile payments are expected to grow at a 23.2 percent compound annual growth rate (CAGR) through 2020.
Along with the demand for convenience and mobile payment options is, of course, a demand for speed. In fact, according to the same Capgemini report, approximately 35 countries have already implemented or have plans to implement immediate payment systems.
But providing a convenient, quick and secure way to make payments is only one half of the story. How can customers pay you if you don’t invoice them properly and in a timely manner?
When we attended the Utilities Payments Conference recently, e-invoicing and its many benefits for utilities and municipalities were a hot topic. E-invoicing was praised for being one of the quickest and most accurate ways to collect.
Despite that, the Federal Reserve Bank of Minneapolis (FRB) estimates that only 25 percent of the 25 billion invoices generated annually in the US are exchanged electronically. This is a costly trend.
According to Paystream Advisors, businesses can reduce their costs by $4 to $8 per invoice when switching from paper to e-invoicing. The FRB estimates the potential aggregate annual savings in processing costs could be over $100 billion dollars if e-invoicing became ubiquitous in the US.
Besides the cost savings, here are some additional compelling reasons to switch to e-invoicing:
- Cash management: Tracking large volumes of cash is difficult through paper invoices, which can easily be misplaced or lost. E-invoicing, paired with a system that digitizes cash payments, streamlines the process so that the request for money can be met with a payment that can be automatically reconciled in your AP system – even if it is cash.
- Minimized risk: E-invoicing minimizes the risk of error.
- Real-time posting: Payments paid through an e-invoice show up instantly in your AP system. This automatically improves your cash flow and makes your business processes more efficient.
- Encourages on-time payments: E-invoicing gives the customer the option of viewing and accessing the bill wherever there is an internet connection, which means they can pay at their convenience. Adding a round-the-clock, mobile-first cash payment option like PayNearMe further rounds out your collections by adding 20,000 retail stores where you can accept cash payments.
If you’d like to learn more about e-invoicing, check out the Federal Reserve Bank of Minneapolis’ U.S. Adoption of Electronic Invoicing: Challenges and Opportunities report.
Interested in learning more about accepting cash payments for your utility or municipality? See how we work with agencies like Liberty Utilities, the City of North Las Vegas, and more.