E-Invoicing for Cash Flow Management – A Winning Combination

March 14, 2024

E-invoicing today is important, period. Every single transaction in business operations needs to be documented properly in an e-invoice format. It is the base for all compliance procedures to follow, whether it’s filing returns, reconciling accounts, or calculating GST amounts. At the same time, we see e-invoices being a big part of cash flow management in daily operations. E-invoicing for Cash Flow Management is all the rage.

A good e-invoicing system in place reduces any business’s payment cycles, directly impacting working capital. The time taken to complete the cycle between generating an invoice and receiving funds plays a pivotal part.

So, how do we achieve this winning combination of a smooth e-invoicing system to accelerate better cash flow management, and why is it important? We discuss this in our blog here.

Read more:- Checklist to Implement The E-Invoicing System

Understanding Why It’s Important

Did you know that In France, the e-invoicing system leads to cash flow going so down that a quarter of all businesses fail?

Well, that can be the impact of not aligning an e-invoice system, which leads to cash flows going south. The need is even higher in a country like India, where there are many unorganised sectors and businesses. Leading to consequences being even worse there is no E-Invoicing for Cash Flow Management. Let’s see some points on how businesses reap the benefits:

1. Optimised Payment Cycles

As mentioned above as well, payment cycles are pivotal. Switching to electronic invoicing not only speeds up our invoicing process but also ensures your customers stick to the payment terms you’ve agreed upon.

With e-invoicing for cash flow management, we receive payments faster, reducing our payment cycles and minimising the chances of late payments. How? You get automated reminders for unpaid invoices, which help you stay on top of collections, prevent potential legal hassles, and save you money in the long run.

Plus, efficient management of customer receivables means you have less outstanding debt, improving your overall financial health and making you more attractive to banks for better financing options.

2. Order-to-cash cycle

Any buyer is never happy to release the payments early or, for that matter, even on time. Then what does a seller do? One common way to allure buyers and reduce the order-to-cash cycles is to provide them with discounts.

Now, when they know they get some tangible discounts, they are happy to pay on time. But most of the time what, we see is internal delays while rolling these discounts. Why? Because there is a lack of an e-invoicing system that leads to mistakes and, therefore, delays in e-invoice settlements. So, to accelerate the Order-to-cash cycle, the e-invoicing system becomes crucial.

3. Increase in Real-time Visibility

Finance departments need transparency where all the data and information is centralised to work best. An e-invoicing system does exactly that. While it shows the CFOs and their teams a comprehensive view of issued and received invoices, the status of associated vendor payments is clearly visible to them.

Centralising financial data tracking systems simplifies risk analysis and aids in monitoring accounts receivable and payable. Additionally, it enables forecasting of cash flows and potential surpluses or shortages. So, now it’s easier to make decisions based on the performance of various vendors. It is also convenient to see where the money is stuck and optimise the payment cycle process, which is a business’s ultimate goal.

4. Enhanced spend management

Budget allocations and resource management must be addressed. But how do one make decisions if they don’t have the relevant data to analyse and mitigate the risks? This is where the reports procured by a streamlined e-invoicing system kick in. These reports help decision-makers compare and analyse expenses in real time.

How? When you know where you are spending the most versus where you are procuring the maximum benefits and profits, as a finance leader, you will obviously allocate and spend more on the profit drives. So, now you know which vendors are giving you better results and which are keeping your money stuck for a longer time.

5. Increased invoice visibility

In the account payable system, it’s safe to say Paper or e-mail-based invoices are less visible. Resulting in getting lost while in the approval process. So, we see a significant cash deficit relative to the forecast.

Often, the Late discovery of a large invoice leads to cash deficits, and the seller must borrow at premium rates. Also, suppliers might cancel orders due to late payment, and fraudulent invoices can be hard to detect.

Solution? A centralised e-invoicing system that helps identify invoices easily. It lets you settle and approve e-invoices quickly and also enables buyers to optimise discount management efficiently.

How Do You Achieve Optimised Cash Flows

Well, now that we’ve established that an e-invoicing for cash flow management is the key to optimised cash flows, the question arises: How does one achieve it? Well, first of all, it’s imperative that you understand your business requirements and then choose an e-invoicing software that works for you. E-invoicing software is the answer.

There are many available now. Here are the significant points you should keep in mind while choosing the best E-Invoicing software relevant to your organisational and operational needs.

Compatibility

Ensure the software seamlessly integrates with your existing accounting systems/ POS and workflows to streamline invoice processing. If software can easily integrate with your ERP, you are good to go. While the deployment process, many companies take much longer, disrupting your workflows and also diverting your focus areas.

Automation

Automation is the new norm. With the world set to be on auto-pilot mode, why compromise with your e-invoicing systems? Also, as busy as your finance team might be, they need a breather from irrelevant time wastage on manual data entries. Look for features that automate invoice generation, approval workflows, and payment reminders to reduce manual tasks and improve efficiency.

Every business is unique, and so are its e-invoicing requirements. Choose software that allows you to customise invoice templates, workflows, and reporting features to align with your unique business requirements.

Customisation

Security

Data is the new science—that’s the latest 21st-century saying. Without it, harm to it can lead to horrendous consequences. Prioritise software with robust security measures, like industry-grade security, to protect sensitive financial data and ensure compliance with regulatory standards.

Scalability

On a mundane day, a business deals with thousands of transactions, and with growth, it is only going to grow. So, would it be wise to choose a platform that won’t allow you to work at a scale? No. Select a solution that can accommodate your business’s growth and evolving needs, with the ability to handle increasing invoice volumes and complexity. Whether you are an enterprise or a practicing CA, GSTrobo is built to accommodate 1000s of transactions and generate e-invoices within seconds. We meet your growing business demands smoothly.

Analytics

Reports and predictive analysis go hand in hand. Any good financial leader would want to compare and analyse 2 steps in advance. Opt for the software that provides comprehensive reporting and gives you access to real-time analytics capabilities to gain insights into your cash flow performance and identify areas for improvement. With GSTrobo’s intelligent CFO dashboard and multiple reports, you are sorted with planning and executing e-invoicing processes optimally.

User-Friendly Interface

Transparency is now the key to better performance. This means it is open to all. You need software that offers an interface that works for all and just one. Consider the ease of use and accessibility of the software for both your internal team and external stakeholders, such as suppliers and clients.

Customer Support

It’s overwhelming to work on a new technology and be super productive. So, it’s obvious a little is a must. Do see that the software provider has the relevant set of experts who can guide you through the same and are available for any assistance. Evaluate the level of customer support and training the software provider offers to ensure smooth implementation and ongoing assistance as needed. With GSTrobo, you get robust support of 12*6 with our experts available to guide and train your finance team every step of the way.

The Solution

Using or adapting e-invoicing with cash flow management is not just a possibility but a strategic imperative for modern businesses. With the right e-invoicing software solution, organisations can streamline their invoice processes, improve visibility into cash flow, and drive efficiencies across the board.

At GSTrobo, we understand the importance of robust e-invoicing solutions that meet today’s dynamic business needs. Our GSTrobo e-invoicing software offers a comprehensive suite of features discussed above and more.

Designed to meet the diverse needs of businesses, from seamless integration with existing systems to advanced automation capabilities, AI and cloud technology.

Vendor management is the strongest suite of GSTrobo. It validates every invoice before processing and the vendors you deal with by checking their GSTIN status. Our GST Notice Compliant Audit Reports let you always be on top of the game. Also, get a digital signature on every invoice, making your e-invoices completely authentic.

With GSTrobo, you can unlock the full potential of e-invoicing and take control of your cash flow management like never before.