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Using online invoicing to improve cashflow

Invoicing, by it’s very nature is one of the most important elements of any successful business.

No matter how good your products or services, no matter how strong your sales team, if your invoices aren’t issued timeously and accurately, as well as being paid on time, all your efforts could be wasted. Invoicing, by it’s very nature is one of the most important elements of any successful business.  Unpaid invoices or invoices which are paid late are a constant source of frustration, costing your business a whole lot more than just money.  So what can you do to streamline your invoice creation and payment process?

In today’s technology-driven age, it makes complete sense to switch from electronic or even manual invoicing to online invoicing.  Online invoicing is a live way for you and your customers to keep track of the business you do together.  With an online invoice, you work within the Xero system to produce the invoice, which is supplied to your client as a PDF that is sent by email.

The interesting new feature is that the email now also contains a link that your client can click to access their invoice online.

When they click the link, they’re immediately taken to the live invoice, showing the current state of play between you and them. The Xero online invoicing system also cleverly features an optional “pay now” button that will redirect your customer to their PayPal account, encouraging them to settle up with you straight away.  At The Smart Accountants, while we recognise that not all clients will want to pay using PayPal, Xero have indicated that the payment options available via this system are set to widen in the not too distant future.

When the client accesses the live invoice, on the same screen, they’ll have the option to view any outstanding bills.  Viewing outstanding invoices requires a login, but the login’s easy to create and is generated free of charge (as you would expect).  It’s this login feature that provides you with a record of who has viewed their invoices and when.

It’s easily seen why this system could improve cashflow.  For all your well organised customers and clients, this whole system makes the viewing and payment of outstanding invoices as easy as A,B,C.  What’s more, thanks to the login feature on the Xero online accounts system, as soon as your client has opened the online invoice, you receive a “read” notice, which you can retain as evidence that your client has indeed received your invoice.  Using this system, no one can hide behind the argument “we haven’t paid because we didn’t receive your invoice” ever again!  What’s more, because the document is live, your client can view their up to date state of play at any time, simply by looking at the invoice in their browser.

There’s no doubt that this way of invoicing should streamline payment, but that’s only one of the advantages.  The other is that it removes the need for time consuming rekeying of invoices and passing them from pillar to post before they’re finally settled.  So cleverly does the Xero system operate that it even allows the recipient of the invoice to download a CSV of the invoice data which they can then import directly into their accounting software.

While this system is still in it’s infancy, we are excited about the efficiencies it brings, even at this early stage. If you’re interested in finding out more about Xero’s online invoicing system, simply contact us and we can organise a free, no obligation demo.

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