How accountants can help businesses switch to e-invoicing

Accountants and bookkeepers can help guide their business clients through the transition from paper-based accounting to e-invoicing. But first they have to make the case for why.

by | 28 Apr, 2023

At a glance:

  • Emphasise the positive impact of e-invoicing on cash flow with faster payments leading to a healthier financial position.
  • Explain how digital solutions can free them up for more valuable tasks.
  • Be prepared for your business clients to lean on you for guidance and advice as they embrace digital solutions.

It’s not long ago that all business accounting and bookkeeping was done manually and many businesses are still reluctant to put their trust in digital documentation. If you can’t put a big red ‘OVERDUE’ or ‘PAID’ stamp on a paper invoice, does it really exist?

But accountants and bookkeepers can now play an important role in encouraging and enabling UK businesses to see the digital light and discover that solutions like e-invoicing offer a quick, secure and cost-effective way to manage the invoicing process and associated record-keeping.

Invoicing is, after all, the foundation of cash flow. So being able to manage it as efficiently as possible can have a significant impact on a business’ financial health.

3 big advantages of e-invoicing

1. Faster payments for better cash flow

Let’s start with the one that bookkeepers and accountants should lead with when encouraging their business clients to go digital: e-invoicing will help businesses get paid faster.

E-invoicing is the secure digital exchange of invoice information through accounting software providers. By reducing the inefficiencies associated with manual systems (think preparing and posting paper invoices, invoices travelling from inbox to inbox awaiting approval), e-invoicing can lead to faster processing and approval of invoices. Faster payments means businesses have greater control over their cash flow and can forecast more accurately.

Faster processing also means business can benefit from pre-negotiated discount terms on payable invoices. Thirty days and a 2% discount can quickly get away when a paper invoice goes missing, has to be disputed or ends up in the wrong intray. With e-invoicing those discount opportunities can be met far more easily.

2. More accurate record-keeping and compliance

E-Invoicing automatically captures and stores invoice data making it easier to manage and retrieve records compared to paper invoices. And the margin for human error – a duplicate payment, an invoice filed in the wrong folder, a discount not accurately noted – is vastly reduced.

Automated record keeping is especially helpful when it comes time to report to HM Revenue and Customs by helping businesses stay compliant with VAT reporting regulations. The Making Tax Digital (MTD) scheme introduced in 2019 requires VAT-registered businesses with a taxable turnover above the VAT threshold to keep digital records and submit VAT returns using compatible software. E-invoicing can help businesses comply with MTD requirements by providing a digital record of all invoices and VAT calculations.

3. Greater efficiency and productivity

E-invoicing can supercharge efficiency and productivity by automating repetitive and time-consuming tasks like manual data entry, leaving business owners more time to spend on higher value strategic work. By encouraging your business clients to let digital solutions take the weight of admin-heavy accounting tasks, they can focus on generating revenue, building relationships and being on the lookout for growth opportunities.

Moreover, e-invoicing provides business owners with greater visibility into their cash flow so they can make more informed financial decisions and allocate their resources more effectively.

Also, when it comes to tax time or auditing, you as their accountant or bookkeeper will have easy access to the data you need to fulfil your requirements – no more shuffling through endless paper files trying to find information.

Bonus benefits: Better sustainability credentials plus cost savings

E-invoicing and the move toward paperless businesses can help businesses cut their carbon footprints and reduce electronic waste including printer cartridges. And for accountants and bookkeepers whose business clients are concerned about the costs associated with implementing digital accounting solutions, point out the cost-savings associated with eliminating printers, paper and postage from their operations and the convenience of freeing up space once devoted to archiving paper records.

Making the switch: How accountants and bookkeepers can help

Some businesses might be resistant to switching from paper to electronic invoicing – perhaps they’re anxious about learning how to use new technology and feel more comfortable with their traditional paper system. Or maybe they’re sceptical about the security of a digital system or worry it will cost too much to implement.

As their accountant or bookkeeper, you’re in a unique position to give them evidence-based reassurances and guidance about these issues. Here are three tips for getting them across the line:

  • Highlight the benefits of e-invoicing for cash flow, efficiency and long-term cost savings.
  • Provide guidance on how to transition. This might involve giving advice on the best e-invoicing solution for their needs and budgets along with what pitfalls to look out for.
  • Prepare to get hands-on when it comes to training. It will be a learning curve and you’ll likely find yourself the go-to person for questions and frustrations. Moving from paper-based to electronic invoicing can be challenging but in the long run – and ideally even in the short term – you and your business clients will see the pay off.
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