Credit control is the way in which a business manages monetary flows in and out of their bank account. Good credit control is essential for business survival, and largely dependent on the management of invoices and their payment. Increasingly it is seen that electronic invoicing methods are replacing the postal service as a means of document distribution due to its speed, security and convenience.
What role does Electronic invoicing play in Credit Control?
For a credit control system to be effective, it must monitor document distribution within a company, in particular that of invoices or payment slips. In the past, credit control was more difficult because there is no guarantee that an invoice sent by fax machine or post will arrive successfully with the intended party. Electronic invoicing offers this security in credit control because the invoice is stored on a page which can alert the sending company once it has been accessed. This is essential in credit control as a lot of money and time can be wasted when sending invoices and dunning letters without guarantee that they are arriving with the correct party.
Electronic invoicing is also a better method of credit control because of the speed at which it delivers the invoice. Also an advantage of the fax machine, an electronic invoicing system allows the customer access to their invoice as soon as it is available. This means they can technically pay their invoice this quickly. This is convenient for the customer and the business as it enables financial management. Electronic invoicing is particularly useful here because the e-mail notifying them of their invoice can also contain a link to a secure payment page. Therefore, this speedy document distribution allows a business to have a more up-to-date financial system and allows better credit control.
How is Electronic invoicing replacing the Postal Service?
As mentioned above, electronic invoicing as a method of document distribution is faster and more secure than sending documents by post. This in turn achieves greater credit control for businesses as their invoices are guaranteed to arrive with the customer at the time they wish them to.
Electronic invoicing caters for the rapidity of the business world, leaving the postal system with the nickname ‘snail mail’. It is considered trendy and professional for a business to offer electronic invoicing; and proves advantageous to them for the credit control reasons described.
Outsourced credit control and document distribution companies such as Netsend do still offer postal invoicing. This is important, as a business offering electronic invoicing exclusively could risk losing customers.