Invoicing lies at the financial heart of many businesses. You can make or lose money depending on how fast and efficient your invoicing processing and management are. In a typical manual setup, companies take an average of 45 days to process an invoice.
Automated invoicing can shorten this process to as little as five days. That’s an improvement of almost 90%
Automated invoicing is the extraction of data from documents detailing purchasing in an organization. It is used in home service companies to extract data from structured and unstructured document invoices and facilitate faster payments, improve invoice accuracy, and increase employee productivity.
Let’s dive deeper into automated invoicing and how your business will benefit.
What is Automated Invoicing?
Automated invoicing involves extracting data from documents detailing purchases in an organization. It stores data from structured and unstructured document invoices in a digital filing system or an ERP. This system keeps the data inaccessible and organized manner.
Automated invoicing encompasses a lot of functions and features, including sending out invoices at regular intervals, preparing credit memos, processing canceled checks, shipping and collection notices, credit memos, packing slips, and expense reports.
Most automated invoicing software also supports vendor management, where you can easily communicate with suppliers and get insights on purchases you need to adjust and evaluate their performance.
When correctly set up, automated invoicing software will allow you to process payments through a few clicks with almost zero manual data entry.
For instance, when your technician marks a job completed on their job management software, the invoicing software automatically sends the invoice to the customer. The customer pays for the job using the online payment options available on the software, and the invoice is marked as paid.
The only manual data entry you’ll have to do is set your prices, select the services you want to invoice automatically and let the software take care of the rest. You can also add extra equipment used for the job and have them automatically invoiced to the customer when it’s time to pay.
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How Does Automated Invoicing Work?
The primary goal of automated invoicing is to remove the human element in invoice processing and management. Human input may only be needed for essential tasks. Therefore, the purchasing platform can automatically process invoice documents in PDFs, emails, and paper invoices.
Automated invoicing works through the following steps:
- Collection – The automated invoicing software collects invoices from cloud management platforms, emails, or directly from vendors
- Processing – Intelligent software using technologies such as optical character recognition scans the documents and processes the information
- Approval/verification – Data from the invoice, such as quantity, supplier details, company codes, and product numbers, are verified with any irregularities flagged for manual approval.
- Data inputting – Data may be forwarded to an ERP, procurement, or purchasing management platform
- Confirmation – After processing the invoice, the software sends the verification or invoice to the sound source, and they pay for the service.
The Type of Invoices You Can Issue Through an Automated Invoicing System
You can issue three types of invoices through an automated invoicing system. These include:
Quotes
You can send a quote to a customer for a job which will be later followed by an invoice matching the quote after your crew clears the job. Therefore, if you quoted fixing a clogged drain for $180, the software automatically converts that quote into an invoice when the job’s completed.
Time and Materials
Pricing a job based on time and materials is necessary when uncertain how long and how many resources it will take to complete it. For instance, if an AC unit is broken and you’re unsure of the fault, you can charge the job by the hour.
You can still have a fixed fee portion that accounts for the call-out fee for the first hour or inspection of the faulty unit. Afterward, you can set up the software to round the time up or down depending on the job or settings.
Flat Rate Jobs
Flat-rate jobs are jobs you can predict how much time and resources it will cost to complete. For example, such a job may be changing a filter in an air conditioning unit where the price is fixed.
Why Should You Choose Automated Invoicing Over Manual Invoicing?
Manual invoicing is an inefficient, expensive payment method compared to automated invoicing. According to research, 71% of senior decision-makers say it takes up to 15 people to process a single manual invoice.
Moreover, since many staff work on the invoice, it takes longer to process and distracts the staff from other activities.
Since it takes time and effort from your staff, manual invoicing can also negatively affect customer experience. Poor customer experience can also arise from invoice errors common in manual invoice processing.
Benefits of Automated Invoicing
Here’re reasons you should consider investing in automated invoicing for your home service company.
More Efficient Payment Processing
With automated invoice processing, you don’t have to organize clients’ invoices weeks after completing a job. Instead, the software will automatically track the client’s charges and send automated invoices within minutes of completing the job.
Faster Payments
Clients pay as quickly as they receive their invoices. Since the automated invoicing software sends out invoices immediately after your crew completes the job, the client can honor them faster using fast, reliable, and efficient online payment options.
Improves Invoice Accuracy
Consistency and accuracy are guaranteed when using an automated invoicing solution for your home service business compared to manual invoicing. Invoice errors resulting from manual invoicing are costly, with research showing that they cost companies an average of $53.50 to correct.
Increases Employee Productivity
Automated invoicing unloads a lot of work from your staff, allowing them to focus on other business activities that improve your bottom line. They also make fewer errors, leading to a more efficient and less-demanding invoicing process.
Facilitates Collection of Data and Improves Insights
Advanced automated invoicing software incorporates big data and machine learning technology. It allows your business to process data and draw insights from them that can help you manage vendors and improve service delivery.
You can know which customer always pays on time, who’s always late, and which vendor you buy from most often.
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Invest in Automated Invoicing for Your Home Service Company
Automated invoicing will transform how your home service company handles invoices and delivers services to its customers. Improve your contractor business today by investing in a robust automated invoicing solution.