The drivers of the economy are the small and medium-sized businesses. These businesses handle the limitless stress of the ever-changing market and constantly adapt themselves to meet the market needs and demands. However, strapped for resources and the perennial need to abide by tight budgets have made many businesses struggle with basic tasks. For example, streamlining billing & invoicing processes in small businesses is notably difficult. Whether the business employs modern solutions such as invoicing software solutions or relies on the age-old paper-based methods, they are always struggling to make ends meet. Rapid digitization has only exacerbated the situation, creating newer and more complex challenges for small businesses.
According to a survey, 36% of small businesses were found to be using pen and paper-based methods to solve their business financing needs. Time allocation and manual errors are omnipresent in such cases apart from the inevitable challenge of finding funds and resources to afford the exorbitantly priced invoicing software solutions. Digitization is forcing the businesses’ hands to adopt the modern methods as the classical ones are no longer flexible enough to incorporate all the requirements. Hence, the current knowledge sphere needs to be updated with the most glaring defects of the current small business invoicing management systems. These issues can be rectified to streamline the process further.
Challenges Associated with the Current System
- A substantial number of businesses use manual methods such as word documents and spreadsheets to create and manage invoices. Such a redundant method negatively affects the time crunch. Furthermore, the system also needs to be updated manually after each payment which further reduces time availability for creative, skilled work.
- Manual invoicing leaves the businesses liable to ask for late payments or dues. Such a scenario strains the customer-business relationship. In addition, regular reminders can lead to uncomfortable conversations and interactions.
- Payments based on the amount of time a service has been utilized requires the businesses to keep track of time. Unfortunately, it is an ordeal to track work hours in the long run accurately. As a result, businesses will often overcharge the customers, leading to the customers wanting to seek services elsewhere.
- Mindful compliance with the constantly updated tax laws and rules of each country you work in can be a nightmare. With no automatic regulatory system, businesses are left vulnerable and liable to fend for themselves.
Four Ways to Streamline Business Invoicing
- Digital Invoicing
The COVID scenario has pushed digitization to unimaginable scales. But, unfortunately, the incessant push has rendered a few age-old systems redundant. A small business invoicing management system is one of them. However, digitizing invoicing is irrefutably beneficial for businesses as it helps in reducing time spent on invoice creation, eliminating basic data entry work, and reduced errors.
Additionally, online invoicing has assimilated all the invoice data under one roof for easy access. Chances of data loss are also reduced due to highly specialized and efficient cloud storage systems. Every action is logged and recorded in the online database, an opportunity that was impossible in the paper-based method. As a result, issuing refunds and managing finances will become a walk in the park.
Digitization of the business invoicing management systems opens the opportunity to automate the existing systems smoothly. Automation will eliminate mundane data entry work and will free up valuable time for creative work. Recurring invoices will no longer be required to be generated over and over again. Payment reminders can also be automated to remove the possibility of uncomfortable interactions and unwanted damage to business relations. Automation also provides the opportunity to convert estimates into invoices with ease and save up time and resources. Re-billing is also dramatically improved and made efficient. Data analysis for valuable data extraction can also be done using artificial intelligence and machine learning. Automation streamlines invoicing for better analysis and growth projections as well.
- Invoicing with Benefits
Traditional office settings allowed ample opportunities to interact and optimize products and services before it reaches the customer. The same goes for invoicing management systems, as workers could interact with each other to gain additional valuable insight on a transaction before issuing an invoice. However, after the pandemic, digitization has removed these interactions. Thus, if the small business desires to implement digital invoicing systems with automation facilities, they should look for software and service providers that allow additional interaction on their platforms. These interactions could include a comment addition feature that is only visible to authorized personnel and not to customers or the receivers. The coveted features will also improve data privacy and productivity.
- Customer Portals are Add-ons
Similar to comment sections for employees and authorized personnel, customer accounts and portals can also be highly beneficial. Small business invoicing systems can be turned into more than a productivity feature and be utilized to improve customer experience. If the automated business invoicing system has a dedicated customer portal, the customer will be able to view all their past transactions and orders. Future orders and estimates can also be placed through such a portal. Most such customer portals come with dedicated customer service centers. Hence, the unnecessary need to email back and forth will also be eliminated. The portal will also allow the clients to take note of the open invoices, and timely automated reminders will improve payments.
The coming digital economy will force businesses to modernize and adapt to its ways. The businesses that fail to do so will wither and die. Streamlining small business invoicing is one of the key challenges SMBs can overcome for improved efficiency and productivity. Although digitizing invoicing systems is a costly affair, businesses should actively look for better solutions that align with their budgets and help in larger business growth.