We take online invoicing for granted nowadays. Every week we send or receive electronic invoices from clients and businesses worldwide. Yet behind these smooth, fast, and often automated billing processes is a fascinating invoicing history of technological innovation.
Invoices in themselves are nearly as old as human civilization. We’ve been writing invoice documents to customers for thousands of years, whether on clay tablets, animal skin parchments, or paper. And throughout that time, the basic format of an invoice has remained the same.
The biggest innovation in invoicing has come relatively recently with the development of technology, most notably the internet. Today we can send an invoice to a customer on the other side of the world, within seconds, without touching paper or a pen. This is something that would have seemed unimaginable just a couple of decades ago.
So how have electronic and online invoices evolved over the last few decades and what does the future hold for this incredible innovation? We provide some of the answers in this article as well as what we predict will be the next invoicing step forward.
The History of Online Invoicing
Electronic invoicing – a precursor to the online invoicing we recognize today – is not a particularly new phenomenon. Electronic paperless invoices have been around for more than three decades. However, they used a cumbersome and rigid electronic data interchange (EDI) which required a dedicated communications system between trusted trading partners. This was relatively expensive, not very adaptable, and limited the types of partnerships that could be developed.
With the development of personal computers and the growth of the internet, different forms of electronic invooicing emerged, including ‘electronic bill/invoice payment and presentment’ (EBPP/EIPP).
In the first few years of the 21st Century, larger businesses and financial institutions grew more interested in finding ways to streamline payment processes and optimize supply chains. At this time there were no real security standards, agreed formats, or recognized technical frameworks.
However, as more reliable internet access appeared and PCs became ubiquitous, established frameworks began to be created. This was especially case in the European Union, which led the way in the development of online invoicing.
The driving force behind the fast evolution of electronic invoicing was the desire to reduce traditional invoicing costs and the related laborious processes. Online invoicing was cheap, fast, and paperless, which was an extremely attractive proposition for many corporations and small businesses.
Over the last decade, with the continued growth, speed, and reliability of the Internet, online invoicing has evolved further. Cloud-based invoicing solutions have made it much easier to record, validate, and transmit data within seconds.
Online invoicing is now simple and affordable for anyone to access and use, from huge governmental organizations and corporations to medium sized companies, small businesses, and solopreneurs. This has meant a monumental growth spurt for online invoicing, with further adaptations, technological developments, and global framework innovations being only a matter of time.
Online Invoicing in the Present
Online invoicing is growing and it’s easy to see why. With specialist software-as-a-service (SaaS) providers giving business owners a wealth of tools, processes, and secure billing options, there is every reason to predict digital invoicing will become the norm.
Invoicing online is more cost effective than writing invoices on paper and mailing them to clients or customers. Small businesses and freelance professionals especially are able to save money on paper, envelopes, stamps, and other associated postage costs.
It’s been estimated that online invoicing might save a typical accounting department up to 80% of their paper usage. This also means digital invoicing is more environmentally friendly, which is important to a lot of companies and customers.
Speed is of course another benefit of internet invoicing. An e-invoice can be written, approved, sent, received, and paid, within an hour. Indeed, multiple invoices can be prepared together, and sent out all at the same time. With internet invoicing, you can also save templates with pre-written invoice information, allowing you to further speed up the process.
With online invoicing, everything is automatically saved and stored securely online. This means an invoicing account can be accessed from anywhere, even while on the move, which is especially beneficial for freelancers and solopreneurs. Clients can be billed from a home office or from a hotel, or even, from the beach.
Advances in technology, especially in relation to apps, mean many invoicing processes online can now be automated. Integration between apps and other software allows for a whole web of communication and automatic data updates, between devices and programs.
Invoicing has now become multifaceted and interconnected. Where once an invoicing program was simply used to write and send invoices, now it can also be used to track and record time, manage projects, schedule meetings, send emails, and so much more.
Professionals also find it so much easier to automatically create and analyze financial reports, via a dashboard. All billing and payment information, including estimates, invoices, expense receipts, are in one place. This make it so much simpler come tax season.
Businesses without an online invoicing system of some kind will increasingly find themselves being left behind, as more and more customers become accustomed to digital invoices and related modern payment processing.
What the Future Might Hold for Online Invoicing
With online invoicing set to expand rapidly over the next few years, it’s interesting to wonder just what the future holds. Until very recently, it’s usually been government mandates that have fueled the advancement of invoice technology and processes. This in turn has led to increased popularity among businesses, especially the large corporations.
Today, however, online invoicing service providers are focusing more on small business owners (SMEs). In the US alone, there are nearly 28 million small businesses, all of whom provide fertile ground for rapid online invoicing adoption.
Small businesses often have different requirements to the large corporations. They require more affordable digital invoicing options while also demanding speed and simplicity.
This means invoice platforms will need to carefully balance the needs of SMEs with those of the larger companies. Yet, as is being discovered, both small and large business invoicing needs are usually met with a holistic approach where multiple tools and processes are included in one invoicing system.
Mobile invoicing will become a bigger feature of digital billing. Mobile apps and services that allow business owners to send, review, and approve invoices on a mobile device are already becoming increasingly important. There are a growing number of apps that cater to this growing requirement, especially aimed at freelancers and solopreneurs.
The future is likely to see fewer and larger online invoicing providers as technology and market needs dictate an increased level of security, data protection, integration, and trust. Automation and the integration of multiple services, apps, and technologies, together with improving cross-border practices, mean companies that can provide an overarching and highly customizable service for their customers will thrive.
Invoicing software-as-a-service (SaaS) providers will continue to increasingly become the dominant go-to for many business owners.
Invoice Ninja and Online Invoicing Innovations
At Invoice Ninja we work hard to develop innovative invoicing technology and processes for our customers. Whether for small business owners, start-up company entrepreneurs, or solo freelance professionals, we’re at the forefront of delivering every facet of their invoicing needs.
These days, online invoicing is not simply about sending out an invoice. It’s so much more. Businesses rely on integrated systems that can work seamlessly across multiple platforms and fulfil a wide variety of tasks. Everything from digital billing, quote creation, and proposal writing to time tracking, project management boards, and so much more.
Invoice Ninja delivers all of these by providing customers with the latest software, tested by thousands of developers around the world, and designed to fulfil every invoicing, payment, and project management requirement a small business could possibly need.
In so doing, we provide an exciting glimpse into the innovative future of online invoicing.