In this article, we want to help finance directors understand how manual invoicing eats up more of their time than they give it credit to. It is inefficient, mind-numbing and is often a culprit of one not having time for more important tasks. Naturally, we will be exploring potential solutions too.
You must be thinking we are pretty brave with the title of this article. But really, we are just being straightforward and honest. While many companies still cling to manual invoicing as if it’s the only right way to go about things, it is costing them more than they know. Both financially and time-wise. Gone are the times when you only needed humans to work hard to make a successful business. Today’s demands are far too high for this approach to work and, unless you employ digital tools, you will end up with a burnout team and still subpar results.
Invoicing is one of the processes you should automate as soon as possible. First of all, it’s a relatively small operation and is therefore perfect for the first steps towards digital transformation. Secondly, the impact this small change delivers is actually very big. But that’s something we will be expanding on further ahead.
What are the Common Mistakes Made While Invoicing?
Mistakes are bound to happen, even when dealing with something as sensitive as invoicing. These are some of the most common ones that stem from manual invoicing:
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Typos;
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Invoices not being sent in a timely manner;
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Invoices sent to the wrong client;
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Lack of branding / overall professional look;
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Not following up with unpaid invoices
Naturally, there are more mistakes than just these. But as already stated, we will be focusing specifically on those caused by raising invoices manually.
The Problem with Manual Invoicing
As you can see above, when handled manually, the process leads to mistakes. But that list is barely scraping the surface. In this section, we will be diving deeper into what kind of issues may arise if you delay making the change.
It Stacks Up
If you’ve ever done invoicing, you know it’s not exactly a big task. Depending on the complexity, it barely takes over five minutes, especially if you just need to populate an existing template with the relevant values. At first glance, it is not one of them grande tasks that eat up a lot of your time. But remember, this is if we are talking about raising one invoice. What if you need five? 5x5 is 25 minutes - and that’s already a chunk of time you could have used elsewhere.
The number might be greater, the process could take you more or less time, you invoice people daily, bi-weekly or monthly - the differences don’t matter. The point we are trying to deliver stays the same under any circumstances - it stacks up. Before you know it, the simple 5-minute process is taking hours on end. If it’s spread out throughout your week, you most likely don’t even register it. So, if it feels like you never have enough hours in a day to finish all your tasks, it’s worth checking how many of them are spent on “minor things” like invoicing.
Human Error
Even something as simple as filling up an invoice template isn’t completely risk-free when it comes to errors. Whether it’s a simple typo or a momentary confusion over what the correct values are, these tiny mistakes come at an expensive cost. As a rule, any transaction-based interactions with both clients and suppliers come with an additional layer of sensitivity. Depending on your pre-existing relationship, one typo in an invoice can bring your partnership to a bitter end or trust issue further along.
That said, there is no shame in making mistakes. As humans, we are bound to make them. The problem is that the business world isn’t as forgiving of the fact, especially when there are, in fact, people trying to pull scams at the pretence of accidental errors. In other words, you want to minimise the risk not just for the sake of looking professional, but to stay trusted. And the best way to get rid of human error is…You guessed it. Removing the human from the equation. But more on that in our next section.
Digitisation as a Solution
If at this point you’re wondering what is the alternative, we have you covered. And, really, it’s very simple - instead of carrying the task out manually, you entrust it software to run it automatically. While digitisation may sound like a scary concept, it’s much easier than you think. Let’s dive right into it.
Invoicing Tools
Given the SaaS market has a tool for practically any challenge a modern business might be facing, there’s little wonder it has something to offer for the invoicing process specifically. Most of the said solutions do exactly what you’d expect. They automate the process of invoicing. However, it’s how they do it that differs, as well as if there are any additional features. Very often, invoicing tools aren’t stand-alone products but rather found as a module within other solutions. This is mostly due to their nature of being reliant on the data the bigger platform captures.
Of course, tools that do nothing other than invoicing exist too. However, if you go for one of those you will need to ensure you have other sorts of software too, and the two (or more) solutions can be linked through an integration. Simply put, raising the invoice itself isn’t the only step you need to take, meaning a solution designed to simply populate the fields won’t be enough to meet your needs. But let’s expand on that.
Automate the Rest of the Process
The process of invoicing doesn’t start nor end with raising the invoice. It begins with recording the data and that’s the first step where things can go wrong if done manually. For this reason, we recommend using digital solutions from the get-go. For example, if you invoice based on hours worked, it’s a smart decision to record the said hours on digital timesheets. This way, you’ll have them accessible on demand instead of having to type them out every time.
Additionally, when already recorded either within the solution that raises invoices or with one that integrates with the timesheets, you will have your invoices populated with the collected values. Meaning there will be a bare minimum, namely the setup, required of you. To keep the workflow going, some solutions will also let you automate the distribution of invoices to the right contacts, at the right time. Yes, you read that right - you won’t even have to export and email the invoices manually. In other words, manual invoicing is simply not worth it. Automate it instead.
Benefits of Saving Time
Of course, we all want to save time and know it’s a good thing. But why? What exactly will you and your business get from claiming back a couple of hours a week? It doesn’t look as big when you think of it and some would wonder if that is worth the investment in software. We assure you - it is. Because those couple of hours can make a huge difference.
Growth and Scaling
The main benefit of automating a task as simple as invoicing is that it will ultimately make you more capable of scaling and growing by working on more clients simultaneously. As mentioned already, the time you spend invoicing can stack up really fast. But it works the same way when we’re talking about saving time. It might seem you’re only claiming back a couple of minutes by automating invoicing, but the said minutes become hours you spend working on your clients instead.
Naturally, the more time you have free from tedious admin tasks, the more time you can apply towards growing your business. Whether it’s tinkering with your sales and marketing strategy to attract new clients or building better experiences for the existing ones, unlike invoicing, these activities contribute to more than simple maintenance. If anything, they are driving progress. So, can you really afford to be stuck in the rut, or do you want to keep on advancing forward? You know the answer. All you have to do is pursue it.
Summary
Invoicing may appear to be a task small enough to be handled manually without causing any major issues. However, this is just an illusion as invoices stack up and, before you know it, actually consume a big chunk of your time. Not to mention, they are prone to human error which leads to mistrust and downright ruined relationships.
Automating the process of invoicing is a good and logical first step for companies that are only starting on their digital transformation journey. It’s important to remember, however, that raising an invoice itself is somewhat middle of the process - there are steps to be taken before and after to complete the workflow. This means you need additional tools for it to run smoothly - or get one that has automated invoicing included as a module. For example - Timesheet Portal. Our powerful platform has many great features to offer - including automated invoicing.
Intrigued to find out more? Try for yourself.
