For decades, businesses have relied on paper or PDF invoices to get paid, juggling manual processes and slow customer responses. Now, that’s starting to change.
Here’s why making the move is worthwhile.
1. You can get paid faster
Slow-paying customers can stunt a business’s cash flow. A 2021 report by the financial software company Wave found that 25% of surveyed microbusinesses — those with nine or fewer employees — have waited more than a year to be paid by at least one customer.
But online invoicing is easing the communication between billing businesses and paying consumers. Microbusinesses that used digital invoices with online payment options saw about 15% more invoices paid within 30 days than those businesses that didn’t use this option, according to the report.
Hannah Vaughn, owner of the online marketing business Mane Impact, has tried multiple peer-to-peer platforms to simplify online payments and says switching to digital invoices has helped her get paid more quickly. “People can just click ‘accept’ and have it transfer,” she says, making payment a one-step process.
2. It’s more convenient for customers
When the COVID-19 pandemic caused in-person shopping to take a nosedive, more consumers started showing a preference for ordering and paying online. Online invoices are an easy way to meet this need and provide more payment options.
“Folks want the ability to pay on their own convenience and [with] the method they want,” says David Axler, vice president and general manager of books and banking for Wave.
Making the transition to online invoices with built-in payment options might also encourage more customers to pay online rather than in person, a helpful change for small businesses trying to limit crowds.
3. It’s scalable and efficient
Maryana Grinshpun, owner of Mammoth Projects, a New York City-based architectural and design firm, says that online invoicing saves her time by automating billing information. Instead of having to enter items like sales terms for every invoice, “being able to reference that [information] in perpetuity for this client and every client in the future” simplifies the process for her.
Online invoicing also simplifies payment schedules with automated recurring billing, so business owners don’t need to manually send invoices every week or month.
By allowing businesses to automate their billing, online invoicing saves small-business owners time commonly spent on administrative tasks that can be used to gain more customers and scale their businesses.
“For many of our business owners, the way that they grow their business is by getting more customers,” Axler says.
4. It helps with managing cash flow
Cash flow concerns are nothing new for small businesses. According to a 2021 QuickBooks survey, 60% of small businesses have experienced cash flow issues. Online invoicing offers small businesses a tool to manage cash flow more efficiently.
Unlike invoices without digital payment options, online invoices allow business owners to closely track what hasn’t been paid and to better forecast what they’re likely to have coming in. That insight gives small businesses an edge when it comes to navigating tough economic times and riding out shifts in the market that can affect consumer spending.
The article 4 Reasons to Switch to Online Invoicing originally appeared on NerdWallet.
Credit: Source link