A majority of finance leaders say sending invoices immediately is the key to improving cash flow. The challenge, however, is that manual billing processes can be time-consuming, error-prone, and inefficient. This is where automated billing systems and e-invoicing solutions come into play.
By automating the billing process, businesses can streamline their operations, reduce the risk of errors, and speed up invoice delivery. An automated billing management solution or e-invoicing solution is key to achieving this. In this article, we’ll cover how it can be implemented, key parameters to consider, how it can benefit your organization, and more.
An automated billing system automates billing processes like gathering, reviewing, generating, and sending invoices with minimal manual input. It can be customized to meet customer requirements and may include a self-service portal for easy payment of invoices.
An automated billing system in B2B sales can be likened to a digital assistant for a busy executive. In traditional methods, managing invoices is comparable to personally tracking and organizing every appointment and task manually. However, with an automated billing system, it’s like having a reliable assistant who efficiently schedules appointments, organizes meetings, and reminds the executive of upcoming tasks seamlessly. Similarly, the automatic billing system handles invoice generation, delivery, and reminders, freeing up valuable time and ensuring accuracy in the billing process, just like a trusted digital assistant streamlines tasks for a busy executive.
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An automated billing system integrates with your company’s ERP, CRM, payment getaways, and other software to eliminate manual intervention. Here’s how an automatic billing system works:
Billing happens when the customer places an order and the product is ready to be shipped. An automated billing system gathers and verifies the order status, product/service price, packing charges, transportation charges, and other information to prepare the invoice.
Once the information is verified, the billing system generates the invoice and sends it to the customer via email. The automated billing system also includes a link for payment within the invoice.
After the invoice is sent to the customer, it is time to file it for bookkeeping purposes. This helps in tax filing and tracking sales.
The automated billing system also automatically adds new sales to the sales ledger. The sales ledger keeps track of all invoices in chronological order.
Invoicing is an integral part of every business, and for any company to scale, it cannot depend on traditional processes that are mostly manual. An automated billing solution is scalable, faster, and less error-prone.
Besides helping your team increase their productivity, an automated billing system also enables you to get payments much more efficiently. Here are some reasons you should consider automating billing for your business.
The upfront cost of setting up an automated billing system might seem high, but in the long run, it reduces the costs in the form of reduced paper usage, fewer errors and rework, and lower FTE costs.
With automation, you can achieve 70% lower invoicing costs with automated invoice generation and delivery. Moreover, you can automatically integrate your billing system with Account Payables portals and accounting systems to deliver invoices through emails, postal mail, fax, etc.
As the business grows, its order volume also goes up. Accounting teams may then find it hard to keep up with the billing process for multiple customers. This, in turn, reduces their efficiency and speed of work, resulting in delayed invoices and an increase in the number of delinquent customers. With an automatic billing system, managing a growing customer base and order volume is simpler and more efficient.
Manual work often results in errors; when it happens in the billing process, a company could face huge losses. For example, if there is an error in the billing amount, due date, inventory sold, or late charges, it can lead to revenue loss, customer attrition, and bad debt. Automated billing systems eliminate the need for manual data entry. By automating the billing process, businesses can ensure that the right customer is billed the correct amount, reducing the risk of errors and mistakes.
Moreover, automated billing systems can provide real-time data on billing activity, giving businesses greater visibility and control over their billing processes. This can help companies identify and address errors or discrepancies quickly before they lead to more significant problems.
Billing automation not only simplifies but also offers secure customer onboarding through authenticated emails, SSO, and buyer self-registration. Latest billing automation systems offer self-service portals supporting multiple languages, currencies, and payment formats.
Best-in-class e-invoicing software also allows businesses to send customized emails to customers before their payment due date. The dunning feature makes collections easier by notifying clients about their payments before the deadline.
The traditional way of managing data follows a ‘file-based approach’ where the data is stored in separate files in the computer. These computer files are defined and managed by different computer programs. Storing important data in this manner leads to confusion and difficulty in finding the right information.
An automated billing management solution integrates with other systems and ensures customers’ billing and invoice data are stored in a centralized database. This makes it easier to access and manage data compared to traditional billing processes.
An automated billing system offers flexibility in payment methods to accommodate the diverse needs of customers. It includes various payment methods, such as credit terms, ACH transfers, wire transfers, and purchase orders, while ensuring compliance with invoicing regulations and industry standards.
If you’re planning to implement an automated billing system for your business, here are a few things you must consider to avoid the blockers during implementation.
Assess current billing processes and identify pain points.
Research and select the right automated billing software for your business.
Plan and prepare for implementation, including data migration and staff training.
Execute the implementation process and monitor progress.
Plan for post-implementation evaluation and optimization.
It can be challenging to decide on the best automated billing system for your business. With many things to consider – payment methods, frequency, custom solutions, dispute management, integration options – it can get confusing to zero down on one automated billing solution.
Let us make it easy for you to decide. Here are some things you should consider when choosing an automated billing system for your business.
Selecting the right automated billing software that meets your business needs and price points is crucial in achieving your ROI goals. Here are a few things you must look at while choosing an automated billing software for your business:
Invoice customization requirements
Pain points you face with traditional billing methods
Challenges or gaps in your dunning and collection capabilities
Need for a customer payment portal
You can skip this step if your business has already moved away from paper checks and invoices. If not, e-invoicing should be the first step because e-invoicing reduces billing costs considerably, even if the workflow is manual.
Once you’ve decided on the right software for your business, it’s time to integrate your automatic billing system with your accounting software.
For instance, if your business uses the accrual accounting method, then the billing system should automatically record journal entries based on your preferred method. It must update revenues and expenses on two occasions. The first time is when an invoice is sent, and the next is when the payment is made.
Implementing a billing system without integrating it with your accounting software leads to increased efforts and a lack of team productivity.
You can set up the billing rules once the first two steps are completed. For example, add rules around late fee charges if the invoice is overdue by ten days or a month. You can also specify when to create an invoice—when an order is placed or when it is ready to be shipped.
Now that your software integration is done, the next step is to set up a new autobill plan. It basically defines how and when your customers should be billed.
Depending on the type of automatic billing software you’re opting for, it requires you to decide the following as per your customers’ needs:
Amount
Frequency of payment
Billing cycle
Once the settings are done, the billing is automatically executed based on the set parameters.
Generate digital invoices automatically and send them to your customers via email or other means with the help of Electronic Invoicing. It saves your team the manual effort and hours spent on creating recurring invoices.
Electronic invoicing as part of your automatic billing system helps create, send, and track your invoices.
Offering a self-service portal enables customers to pay invoices at their preferred time. It also allows them to track invoices, payment due dates, and credit limit balances without having to contact your team. This saves your team from putting in extra time and effort.
Transitioning to a new billing system can be challenging for your team and the customers. To make the transition smooth and seamless, here are some tips you can consider.
Notify customers about the upcoming transition to a new billing system to avoid confusion or suspicion, especially amidst prevalent phishing attempts.
Send a dedicated email or include a notice on the final invoice before the switch to reassure customers and explain the benefits of the updated system.
Seize the opportunity to reassess and potentially revise your payment terms while implementing the automatic billing system.
For instance, if your previous process involved mailing invoices with net 30 payment terms, consider adjusting them to reflect the efficiency of the new paperless system, where customers receive bills instantly and can conveniently settle payments online.
Numerous automated billing management software platforms offer online portals enabling customers to pay invoices through various methods, ranging from electronic checks to major credit cards.
It’s essential to identify your customers’ preferences and configure the billing system accordingly to accommodate their preferred payment methods effectively.
HighRadius’ AI-based E-Invoicing and Payment Software enables frictionless billing and payments with automated invoice delivery. With its self-service portal for your customers, you can reduce payment friction and increase customer satisfaction. The software auto-generates invoices and allows you to customize them based on your branding requirements. To make things easier, it also allows for automated integration with your A/P portals, including SAP Ariba, and accounting systems, such as QuickBooks and Sage to deliver invoices through emails, postal mail, and fax, among others.
With over 150+ global payment options, including ACH, credit card, SEPA, and Giropay, you can now accept payments from customers across the globe, easily and securely. But that’s not all. With HighRadius, you can also embed guest payment links in dunning emails through our e-invoicing solution, making payment processes seamless for your customers. And the best part? You can enable your customers to schedule payments, pay in installments, make partial payments, and support complex customer hierarchies, including parent-child scenarios.
By using HighRadius’ AI-enabled EIPP software, you can deliver an unparalleled customer experience. Providing secure, flexible, and unique payment links allows your customers to have more control over their payment options, making them feel valued and appreciated. Don’t miss out on the opportunity to enhance your customer experience and expand your global payment options with HighRadius’ EIPP software.
An automated billing system helps businesses in many ways. It automates the collections process, directly impacting the revenue stream. By automating billing operations, businesses can streamline their internal processes, reduce the risk of errors, and expedite the delivery of invoices to customers.
Compared to manual billing systems, automated billing systems offer numerous advantages. One of the key advantages is improved speed. Automated systems can generate invoices and process payments much faster than manual methods, leading to quicker payment cycles and improved cash flow.
The primary goals of implementing an automated billing system are to enhance efficiency, reduce late payments, improve customer satisfaction, and optimize cash flow. By automating billing processes, businesses can streamline operations and reduce the time and effort required to manage payments.
A successful billing system encompasses various functions that cover the entire payment cycle. An effective system should be able to generate accurate invoices, process payments securely, provide comprehensive reports on payment status and trends, and enable businesses to track customer payments efficiently.
To automate customer billing, here are the steps that businesses must follow:
Select suitable billing software
Set up customer profiles with contact and payment information
Create templates for invoices and payment reminders
Input data for products/services, pricing, and customer details
Schedule billing cycles to generate invoices automatically
Set up payment reminders for customers
Offer secure payment options
Address exceptional cases promptly for a smooth billing process.
Use AI-based HighRadius’ Autonomous Receivables software for identifying delinquent customers and reducing your company’s bad debt.
HighRadius eipp software provides tools that automate and speed up invoice communication and facilitate a faster collection of payments, enabling a closer and more convenient relationship with customers. It automates the invoice transmission and payment collection process providing a configurable solution that supports multiple invoice formats and different modes of transmission (fax, email, portal, etc.) depending on the targeted customer, its integration with ERP systems and a rich search capability enables efficient storage and retrieval of past invoices, backup attachments to minimize disputes and short pays. Apart from that it also has some key features that you would not want to miss out: level-III interchange and surcharge; self-service customer portal; invoicing across email, customer portals, post, and fax; advanced deduction management; and lightning e-payments. The result is faster invoicing and payment collection, better customer service, and improved profitability and cash flow.