03 December 2008 - Sending our invoices via email has improved our cash flow by reducing our debtor days by 25% whilst also dramatically cutting the cost of sending every invoice by £1.28, saving us £100/month.
Implementing eInvoicing, a personal perspective
by Garry MacDonald
Last year, after having suffered one too many Belfast postal strikes, we began to look into ways that we could continue to send out our invoices independent of the Royal Mail.
Being a computer company we looked to see what technology was at hand and discovered that we could simply email our invoices from our SAGE line 50 accounts package. At that stage, circa 2007, it was version 12.0 and up until that point we had always printed and posted our invoices.
Initial Considerations When Setting Up eInvoicing
There were four immediate issues:
- Would our customers accept their invoices via email ?
- If so who should we send it to ?
- Does the invoice come across clearly enough in an email ?
- Can we repeat regular invoices ?
Surprisingly enough, we thought it may be too radical a step, when we emailed our customers to discuss what we were planning we were met with: 'Great idea', 'No problem, lots of our suppliers already send us email invoices', 'Oh that sounds novel, go ahead'. In fact out of 80 regular customers only two asked to continue receiving invoices thru the post.
Encouraged by our customers' response we asked 'Who should we send these invoices to ?' In most cases it was the same accounts contact that we had always dealt with but in some cases we were asked to send to another colleague or a specially set-up email address accounts@customer.co.uk email address.
Having established who to send our eInvoice to we then turned our attention as to how it appeared in our customers' INBOX. Primarily that was because we used pre-printer letterhead with our logo, registered address and VAT details. That meant we then had to replicate those details in our eInvoice, no straightforward task as it entailed us getting to grips with SAGE's Report Designer. If you've ever had to use it you'll know what I mean.
After a few attempts I think we managed to get it right for our needs and it was greatly enhanced by being able to send it as a PDF which mean that it could be easily read and unable to be changed after sending. See what I mean by having a look for yourself.
Finally, SAGE has the facility to run 'repeating invoices' which greatly cuts down on the work in producing consistent monthly, quarterly and annual invoices.
Business Benefits We Have Gained From eInvoicing
- Our invoices now go out quicker and more regularly than before, unaffected by postal strikes which means our cash flow is not adversely impacted. In fact being able to invoice quicker and easier has now improved our cash flow as producing invoices takes much less time and are less laborious and are now not the job that was previously put off until the end of the month.
- The cost of sending a single invoice has come down from:
a. Price of headed notepaper, ink and envelope = £0.05
b. Price of 2nd class stamp = £0.23
c. Saving in time producing an eInvoice 3 mins @ £20/hour = £1.00 - Total = £1.28/invoice
Which means, based on 80 invoices, we're saving approximately £100/month in material costs and time - Finally, being able to send invoices via email now means that it is far easier/quicker to re-send any missing or copy invoices via email than by fax or post.
Having been experiencing the benefits for the past year and a half now we have found that in terms of payback the set-up paid for itself within the first 6 months and we would whole heartedly recommend this solution to our clients.
If you would be keen to see the benefits of eInvoicing for yourself ? then we would be happy to arrange a demonstration of our 'Invoicing and Credit Control' process here at Tartan IS or for us to come to your premises and size your own requirement. Just contact us to get back in touch and let us know.