E-invoicing for Small Businesses: Your path to faster payments

What is e-invoicing? 

E-invoicing automates the digital exchange of invoices between buyers and suppliers. It eliminates the need for paper invoices and manual data entry, streamlining the invoicing process and reducing errors. Recently published figures from the Department for Business and Trade (DBT) found that 24% of late payment is attributed to administrative errors, which can be resolved with e-invoicing. 

What are the benefits for small businesses? 

E-invoicing offers a variety of benefits to small businesses: 

Simplifying the invoice process and making compliance easy: E-invoicing makes it easy to store and organise data for your digital records for audit purposes. E-invoicing platforms are also aligned with tax regulations, reducing the risk of penalties and fraud.  

Improving business cash flow: E-invoices are sent digitally and received instantly, enabling quicker payment. The automated process also reduces the risk of delays caused by errors or misplaced invoices. A UK NHS trust where e-invoices are ready for processing within 24 hours had more improved cashflow, compared to companies which take 10 days under paper invoicing. These e-invoices are typically paid almost twice as quickly than paper invoices, with supplier queries reduced by an average of 15%.  

Reducing operational costs and scalability:  E-invoicing will free up time for small business owners and their staff, allowing them to focus on growing the business further. E-invoicing systems can also handle an increase in volume without the additional strain on resources including expenses related to staff, printing, postage and storage. Research conducted as part of a recent DBT and HMRC consultation, suggest that moving to e-invoicing reduces invoicing costs by 60-80%. 

Better customer and supplier relationships: E-invoicing allows between the buyer and supplier to be clear, fair and collaborative throughout their relationship, allowing all parties to track invoice statuses in real time and speed up approval times.

Where can you access e-invoicing? 

There are over 2000 providers in the UK’s Payment Service Providers Industry. They offer a range of products and pricing levels aiming to make e-invoicing accessible to all businesses. 

If you have questions about how to manage your finances and are considering if e-invoicing will work well for your business, please seek advice from a financial professional.