5 Essential Uses for Electronic Invoicing
As businesses grow, their continued success depends on things like automation and standardization. Electronic invoicing allows businesses to better track, process and manage their finances. Spreadsheets, word documents and popular programs such as Quicken allow users to create standard invoices.
Electronic invoicing accelerates the invoicing process and results in accurate numbers, increased efficiency and easier tax reporting.
Pro Forma Invoice
A pro forma invoice is a preemptive bill for services or products that have not yet been received. Pro forma invoices are basically financial estimates or preliminary appraisals that will be finalized after verification of certain items. They are quite common in the logistics world for complex container shipments that carry hundreds of different parts, each with different weights and transportation fees.
Certain government agencies, such as the International Trade Administration (ITA) or Customs and Border Protection (CBP), may require that imported goods come with specific invoices that list applicable taxes and duty fees. Although these invoices are similar to domestic ones, they also include mandated information regarding the shipment’s volume, weight, quantity, packaging, description and unit values.
Regular weekly or monthly billing cycles almost always use software programs that automatically invoice clients. These electronic invoices are often generated by the software and merely reviewed by the employee. Most companies do not use actual electronic invoicing programs, but rather popular programs that come with this function. This invoice type is popular with companies that bill customers every month, such as insurance, cell phone and Internet service providers.
Standard invoices are very common because they are a simple solution for a wide variety of transactions. Standard invoices are versatile enough for new, established and occasional customers. Many small to medium businesses prefer to use Microsoft Word or Excel invoice templates to create their standard invoices. They also can create miscellaneous invoices for temporary projects, one-time jobs and irregular business services.
Project management is a challenge because it involves a variety of contractors and vendors who perform different services or provide different products. A proposal invoice is used during the initial planning stage to declare how much a business expects to charge for the specific job. This type of invoice is similar to a pro forma because it is also changed after project completion to the actual costs. Interim invoices are issued at milestones or regular intervals for long-term projects, such as monthly or quarterly.
Finally, some companies also use electronic invoicing to send past due notices to customers who owe money. These invoices include the amount owed plus any accrued interest or late fees that result from the delinquent payment. Electronic invoicing saves time and avoids frustration through streamlining processes and accelerating billing cycles.