More than 50% of SMEs in the UK experience late payments. This negatively impacts the cash flow. Eventually, this ruins customer relationships, and reduces business’ the ability to pay suppliers, staff, and run daily business operations.

On an average, 46.2% of B2B paper invoices are paid later than the due date.

The frequency of delayed payments increased to an all time high of 90% in 2022.

According to Forbes Advisor, 75% of Americans are falling far behind on their credit card payments.

Now, a few other stats and numbers to get perspective on e invoices.

E-invoices will reach a CAGR of up to 20.4% by 2027.

PaymentsSource reports that 92% of electronic invoices are paid instantly as compared to 45% of paper invoices.

Companies that use electronic or software invoicing see a significant reduction of up to 49% in delayed payments and a 37% reduced in failed payments.

Clearly, we see a pattern here.

Electronic-invoicing cycles are faster. Let’s dig a little deeper to know how e-invoices help businesses get faster payments.

This e-invoicing blog will cover-

• What is an e-invoice?

• What is e-invoicing?

• Benefits of e-invoicing

• 6 Ways e-invoice will help you get paid faster

• Best e-invoicing software

Firstly, what is an e-invoice?

Unlike popular belief, e-invoicing technology is not a new one. Although, it’s significance and usage increased recently at an unprecedented rate.

The pandemic was definitely a catalyst in this process. Just like digital payments are becoming the new norm in the recent past, e-invoices are increasingly replacing paper invoices.

When the pandemic stuck out of the blue, companies and businesses saw digital adoption as the antidote to all economic stagnation.

American and European markets adopted e-invoicing back in 2014 and so, for them it was only a matter of scaling up an already existing infrastructure.

However, Asia Pacific countries took some time to catch up. Though initially there was a hiccup, today Asia Pacific is expected to grow to $4217 million by 2027.

Additionally, B2B will grow at 11% and B2C will experience a 7% increase.

In Countries like Singapore, Australia and New Zealand, e-invoicing was introduced as early as 2019.

Other technologically empowered countries like Japan, South Korea, the Philippines will introduce large scale e-invoicing adoption by the end of 2022.

Also, India and Taiwan implemented e-invoicing in 2020 and the Middle east countries launched e-invoicing mandates by mid 2020.

What is E-invoicing?

Electronic invoice is an electronically developed invoice that is exchanged between a buyer and seller in an integrated electronic format.

E-Invoicing fully automates the entire invoicing process from invoice capture, generation, payment, receipt printing, and payment collection.

In this process, data is read and routed directly from the seller into buyer’s Accounts Payable system.

A central cloud based platform serves as the conduit between the supplier and buyer.

An invoice thus generated is called an e-invoice and the process is called e-invoicing.

Benefits of e-invoicing

First of all, thanks to e-Invoicing, businesses can receive invoices in myriad formats from suppliers, even image-invoices.

Secondly, e invoicing platforms serve as a single place where all accounts payable information is available. This makes the entire invoice tracking process more streamlined and transparent.

A business owner or an accounts team can access, sync and transfer all data between different devices with zero chances of duplication.

Lastly, fully automated processes with minimal manual intervention helps to

• streamline the invoice processing cycles

• reduce man-hours

• eliminate human errors

• decrease turnaround time

• Optimum utilization of resources

• Increased efficiency

• Enhanced productivity

• Better customer satisfaction

When one automates repetitive and time-consuming tasks, the finance team will get ample time to focus on more value-added and strategic customer-centric tasks that can contribute to business growth.

Lastly, overall efficiency increases when business streamlines its processes. This results in optimal utilization of resources and hence enhanced productivity.

There is little doubt when it comes to transparency in automated processes. E-Invoicing is no different; there is better visibility and hence better end-to-end tracking!

Real-time tracking of invoice validation, approvals, and successful payments. Consequentially, this reduces duplicate payments or over payments, thus eliminating errors and miscommunications.

In short, e-invoicing simplifies the entire invoicing process.

7 Ways e-invoice will help you get paid faster

Do you know that up to 65% of all invoices are late payments and that a single payment cycle will take at least 35 to 45 business days to complete?

What does this do to an SME? Delayed payments are detrimental to cash flow and directly hinders business growth big time, ruin customer relationships, and stymie the businesses’ ability to pay suppliers and staff.

Delayed payments are as bad as failed payments because both disrupt the cash flow. Consequentially, it stymies the businesses’ ability to pay.

Nearly 50,000 businesses shut shop due to cash-flow issues, directly impacted by late payments.

Reasons for delayed payments

Did you know that it takes at lease 135 man hours per week and $170,000 per year to issue, process, track paper invoices.

Delayed payments further compound the financial team.

There are umpteen reasons why a paper invoice results in late payments. Listed below are a few of the reasons and disadvantages of paper invoices

• Deliberate payment failure
• Invoice wrongly delivered/ failed invoice delivery
• Get lost in the sea of invoices
• Inefficient & Time-consuming due to manual process
• Accounts Payable process & its challenges
• Extended DSO
• Cost per paper invoice is very high

However, there are ways to eliminate late payments, let’s see how e invoices help businesses fast-track payment cycle?

Prompt Notifications, Prompt payments

Globally, on an average, a person spends 5 to 6 hours on his phone. Sending your invoice over to your customer’s mobile is a great way to ensure faster payments.

Several invoice solutions have the option of sending e invoices via email or even text message.

By sending invoices digitally, businesses are enhancing the chances of customers seeing the invoice which helps in getting them paid as well.

Automated Reminders

Life happens and people may genuinely forget about payments. In such cases, reminding them is a great way to ensure faster payments.

Helping customers track invoices and due date is crucial for timely payments.

Businesses do not have to move a finger to send reminders.  Scheduling reminders is easier than setting an alarm! One click and VOILA! reminder set!

Text and Pay

The text and pay option is so easy that just buy clicking “reply” customers can make payments.

Enabling customers to make payments on the go is a great way to ensure faster payments.

Text and pay gives customers the power to make payments when they want, in the currency of their choice, and from wherever they want!

Payment links

Sharing payment links is also similar to the Text and Pay option. Here,  customer receives a payment link via mail, mobile application, WhatsApp, etc.

An embedded link or button on the invoice will take the customer to a secure checkout page.

They can enter all payment details safely and make payments.

Hence, Offering customers multiple payment options through which they can easily make payments at any time from anywhere is definitely an effective tactic to ensure timely payments.

More Payment Options

There is an increasing demand for convenience and flexibility. Offering clients different payment modes will increase the chances that they make payments on time.

Leveraging a payment solution that supports a gamut of payment cards-both credit and debit- will automatically ensure that payments are faster.

Most solutions and businesses support Visa and master card, but giving options to pay in all major card providers will eliminate one more hurdle to faster payments.

Automatic Payments

Most e-invoicing solutions come with scheduling automatic payments option.

Setting automated payments will ensure long-term customer relationships by relieving customers from the stress of tracking due dates and amount.

Businesses will have a steady stream of income and plan monthly revenue accordingly.

Storing payment information

Imagine having to re-enter the card details every time you shop online?

Annoying right?

A frequent buyer will have poor buying experience if he has to go through the painful task of entering card details every single time.

By digitally storing all payment information, you are making sure that your customer has the best buying experience in every way possible.

The Future of e-Invoices..

The root cause of late payments is definitely the time-consuming manual processes.

Thus, automated processes will inadvertently make the entire billing process more efficient, less time-consuming, and hence more cost-effective.

Transitioning to e-invoices will reduce your DSO, build better customer relationship, and thereby ensure greater business growth.

The Global electronic invoicing market will reach a staggering 752 million dollars in the next 5 years!

Best e-invoicing software

SmartInvoice is the go-to billing software for any business.

With it’s user-friendly and feature-rich mobile application, you can ensure that all your payments are timely and successful.

Benefits of SmartInvoice includes but not limited to-

• Comprehensive Subscription Management Solution
• Payment Gateway integration
• Real-time payment tracking
• Multi currency
• Eliminate manual errors
• ERP Integration
• Recurring and scheduled payments
• Automated Reminders
• Batch processing
• User-friendly mobile application
• Customized templates

Also read-

How digital payment can Transform your business?

What are traditional payments and Digital Payments- Definition, methods, benefits?

How digital payments are touching lives daily?

The pandemic has spurred the use of digital payment solutions in our daily lives. Not just businesses, but common consumers use digital payments more than ever to pay bills, send money, shop online and much more.

Digital payments are soon replacing traditional payment methods and for good reason. So, let’s ask ourselves-

why stand in long queues to pay your ward’s fees when you can pay via a mobile application or a link shared through mail, right?

This changing consumer preference is also causing disruptive changes in every business sector, from EdTech to Fintech, all are switching to the easier, quicker, and safer electronic modes of payment.

In this blog, we cover

1. What are traditional payment methods?  

2. What are electronic payment methods? 

3. How do traditional payment methods differ from electronic payment methods? 

4. What are the features of traditional and digital payment methods? 

5. What are the benefits of Digital Payment Solutions?

Let’s dive right in and explore each of these sections one by one. 

What are traditional payment methods? 

Any transaction that involves the exchange of physical money is called traditional payment method.  Just a decade ago, ours was a fully cash-dependent society.

After all, who doesn’t like the whiff of freshly minted currency notes!

The trust in traditional payment methods is overwhelming, which explains why despite the increasingly digitizing global economy, more than 55% of all transactions worldwide is still cash-based.  

Some Surprising Numbers

According to the YouGov Global Report 2021, in the UAE, a country that boasts more than 90% smartphone penetration, 39% of consumers preferred cash for all major transactions.

Surprisingly, going by the stats, physical money still, dominates the payment industry. 

Additionally, among the countries that prefer cash payments are Germany with a staggering 46% preferring traditional payments over all other forms of payments.

In countries like the UAE, India, Indonesia, Spain the number stands at 39%. 

Also, in the USA, Australia, and Italy 30% of consumers prefer traditional payment methods. 

 What are Electronic or Digital Payments Methods?

Any transaction that takes place via digital or online means come under Digital or Electronic payment methods.

There is essentially no physical exchange of cash or money. The payer and payee use only electronic mediums to complete the transaction.

In the last couple of years, Digital Payment industry was still in its nascent stage. It became a necessity, all thanks to Covid 19 pandemic that threw the world into a tizzy.

Hence, countries like India and the UAE saw its government fully backing Digital Payment industry by running Digital India Campaign and E-Dirham launch respectively.  

Now, Let us look at some numbers, shall we? 

In 2020, electronic payments accounted for more than 45% of global payments. By 2023, 1.31 billion people will prefer mobile payments.  

In the UAE, 2/3 of consumers prefer to continue digital payments even after Covid abates.

49% of people in the UAE prefer card to make payments, e wallet at 18%, cash at 12%, bank transfers at 11% and other modes at 10%.  

Digital payment solutions doesn’t necessarily mean that a transaction is devoid of any physical hardware. PoS machines or card readers are also required when one uses a card to complete the transaction. 

When you purchase a product from Amazon and you use a UPI to complete the transaction, it is a digital payment.  

What are the different Digital Payment methods? 

1. Banking Cards 

Do you know which was the first ever credit card? The Diners Club introduced by the American Express Company in 1958.  

In most developed and developing countries, people prefer card and other digital payment modes. Safety, convenience, security are a few reasons why people prefer card payments as a global payment solution. 

Did you know that there are applications simply to handle cards?  

2. USSD 

Unstructured Supplementary Service Data or the USSD. If one is to point out one drawback of electronic payment solution, it is perhaps the over-reliance on internet connectivity.

For several consumers, internet connectivity is still inaccessible or they are simply not aware of such advanced technology. 

But who said digital payments need internet connectivity anymore? Enter USSD and now anyone can make online payments without proper banking or internet facilities.  

3. UPI 

Unified Payments Interface or UPIs is a payment ecosystem that connects several bank accounts onto a single platform making banking, online transactions, bill payments, etc, an easy, safe, quick option for the end user.

Hence, a single application facilitates hassle free money transfer free between two parties.

Since UPIs are standardized across banks, it is far more reliant, safe and well-structured as compared with NEFT (National Electronic Funds Transfer) or RTGS (Real Time Gross Settlement) or IMPS (Immediate Payment Service) systems.

UPIs are fast becoming one of most popular payment methods globally. 

4. Mobile Wallets 

Mobile Wallets are essentially a wallet in your mobile. You can securely save your card details in your mobile and make payments on the go.

So, it is basically carrying cash in the digital format sans the risk of pickpocketing.

Additionally, you can add money to the wallet and then use that to make payments or transfer funds. 

Banks are distributing their wallets to reach and serve customers better. With the private companies also pitching in, digital wallets are getting all the fillip it needed in a post-covid world. 

Payit, Emirates Digital Wallet, Samsung Pay, Beam Wallet, Etisalat Wallet, Apple Pay, WePay are a few popular digital wallets in the UAE. 

5. Bank Prepaid Cards 

Prepaid bank cards, issued by banks have money pre-loaded in them.

Usually, it is for single use purposes or reloadable for future uses.

A KYC- complied account created by visiting bank’s website, is all that you need to get a prepaid card. 

 6. PoS  

PoS terminals or Point of Sale is a location where transaction or sale happens. A Card reader which can read your card’s details and complete the transaction by entering a PIN is all that is needed in a PoS terminal. 

PoS has now flourished to mPoS or the mobile PoS- that use a tablet or a smartphone, and soft PoS or virtual PoS that use web applications to complete transactions, both equally popular among consumers preferring a cashless payment system. 

7. Internet Banking 

When you complete transactions via your bank’s website it is called internet banking or e-banking.

There are hardly any bank today which doesn’t provide internet banking services to its customers. So, internet banking is at an all time high.

NEFT, RTGS, IMPS etc are a few options while internet banking. 

8. Mobile Banking 

Internet banking using a mobile is called mobile banking. Users can download bank’s own applications and and have a seamless experience of banking on the go! 

In short, the convenience of having digital payments including IMPS, NEFT, RTGS, and creating bank statements, making bill payments, transferring funds all in one single platform cannot be overstated. 

What are the Benefits of Digital Payments?

Digital Payments is not just another payment method anymore.

On the contrary, it is opening up several opportunities for businesses to grow quicker and tap markets more effectively.

Now, Banking is simple, thanks to the popularity of Mobile applications and online platforms. No one visits a bank anymore to transfer cash or pay bills.  It can all be done in an instant.

The world is surely at one’s finger tips. But a section of our society is falling behind in this increasingly digital world, our senior citizens.

They older generation may not be as tech-savvy as today’s youth. Hence, they still prefer and trust traditional payment methods.

Additionally, they have grown in a cash-only society and trust in cash is deep-rooted. Digital ignorance doesn’t help either.

Nonetheless, there are a host of reasons why seniors too should switch to digital payments.

Let’s explore them one by one

1. Better Security

Anti-social elements target senior citizens because they are vulnerable and physically weak. They cannot always defend themselves against a theft or physical attack.

There is risk in carrying cash. This is one of the major benefit of digital payments.

A digital transaction will be completed only with proper customer authentication and verification.

Also, banks use various security parameters like OTPs, cross-verification processes, Strong Customer Authorization, 3D Security, etc, to keep fraudulent transactions at bay.

2. Increased Convenience

Imagine your aged parent standing in long queues at ATMs or at a bank counter to withdraw a small amount of money? Not a very pleasant experience, especially in the heat and dust of a typical UAE climate.

However, that is exactly what an elderly has to go through every time they have to buy grocery or vegetables. So, how can we eliminate this hassle?

With Digital payment solutions.

They can do all day-to-day activities hassle-free within the comforts of their home.

No more worrying if cash in hand will suffice or no. No more sweating and panting standing in long queues to buy milk and groceries.

3. Easy Transactions

Transactions have become incredibly easy and smooth.

Slowly but surely, even for the senior citizens who were initially reluctant to adopt the digital payment solutions are now shifting to it after learning about it’s super easy transactions.

Mobile banking apps, introduction of UPIs and digital wallets have made buying and selling a seamless process for all parties concerned.

4. Multiple Payment Options

The host of payment options in digital payments is reason enough to switch to a completely cashless society.

From Debit and Credit cards to digital wallets, to UPI and Pay-by-link via WhatsApp/mail or SMS, digital payment options are easily accessible.

5. Offer Discounts

Banks provide cashbacks, rewards, discount vouchers, special rewards to encourage digital payments.

6. Contactless and safe

During Covid, everything became contactless, including transactions. In today’s changing times, consumers prefer Digital payment solutions because it was contactless and hence, more safe.

7. Super easy tracking

One of the best features of digital payments is the elimination of manual tracking.

So, maintaining budget, tracking spend history is no more as difficult as it was!

8. Transparent transactions

Real time tracking is easy and so is maintaining transparency because of the ease in data trailing

9. Reduced Operational costs

Collaborating with a card processor to give payment services to your customers is very expensive.

On the other hand, if you use electronic payment methods, such costs incurred are eliminated fully.

Let’s Conclude the benefits of Electronic payments..

Firstly, global cash transactions are on the decline.

This was practically possible because electronic payment integration due to fast digital adaption.

Secondly, harnessing the latest technology helps businesses to stay ahead in this highly competitive world.

Cash reigned supreme at one time but not anymore as businesses couldn’t rise to full potential because of cross-border and international payment difficulties.

All this has been easily solved by electronic payment methods. Nobody thought a day would come when cash can be replaced with a card.

Now, we are looking at a future when even card will be completely replaced with other electronic payment solutions.

Finally, yes the future looks cashless, card-less, and effortless!

Click on the link to know how digital payments can transform your business?

Are you a business owner looking to increase revenue?

Are you struggling to keep up with the changing market trends?

Don’t know how Digital Payments can Transform your business?

If you just said YES to the above questions, you are at the right place at the right time.

Did you know that 71% of SMEs have a website today and that more than 65% of consumers are shopping online?

Businesses should be where customers are. The secret for any thriving business is Happy Customers.  So, how can you make your customers happy and keep them coming back for more?  

In the post-Covid world, consumers are increasingly shopping online. When online shopping increased, so did the need for a safe and secure online payment solution!

What does Digital Payments actually help businesses achieve?  

1. Enhance your reach 
2. More customers mean more sales  
3. Diversify your consumer reach over multiple channels.  
4. Ensuring Secure transactions  
5. Enhanced productivity  
    

Covid and it’s disruptive changes..

Who said online payments or electronic payment services is only for large business enterprises? In the post Covid world, everything has changed. The pandemic transformed the way people conducted transactions. With a super contagious virus on the prowl, contact of any kind was dreaded. To stay afloat businesses had to rely on digital payments or online payment options.  

Even during the prolonged locked downs, we still had to pay rent, bills, and transfer cash, right? This is when businesses of all sizes and shapes realized the importance of electronic payments. For businesses, Digital Payment solutions came as a savior in a Covid-hit society.

The future of Digital Payments..

Now, let us look at the future of Digital Payments. Digital Payments will grow at 19.4% in the next few years. With big players like Apple, Samsung, Google leading the way, the electronic payment sector is going to explode!

High smartphone adoption rates, increase in e-commerce sales , greater internet access, are all reasons that led to this disruptive change in consumer’s payment preferences.

This colossal shift in consumer behavior patterns has forced even banks to get on the bandwagon of digitization. The International Settlements Bank report found that 80% of banks already provide some form of digital currency.  

When several businesses had to shut shop during the pandemic, many SMEs quickly shifted to the digital space. Besides, offering an alternative to cash payments to customers helped them serve more customers during a time of crisis.

Hence, businesses that provided an alternative payment method could tide over the pandemic-induced business stagnation.

Why limit your business when you can sell globally?

Small or big, why should any business limit its market penetration to a locality, region, or even country, when you can onboard customers globally with smart digital payment options?

Also, in countries like the UAE with 94% smartphone penetration, this disruptive shift from cash-based transactions to cashless transactions was so smooth that more than 55% of its population now prefer cashless payments.

Did you know that more than a third of global consumers prefer cashless payments for all future purchases.

Additionally, people find it ridiculous to spend a lot of time, effort, and resources skimming through products in a supermarket alley or standing in long queues to pay fees of their ward, when all of it can be done in under 20 seconds with a comprehensive digital payment solution. 

Digital Payment solutions integrated with a secure payment gateway can make our daily lives so much easier and painless.

In the digital era, business transactions are fast, quick, and extremely convenient, all with the booming and ever-growing digital payments solution providers.    

Now, we know why Digital Payments are a necessity in today’s world but what does Digital Payments actually help businesses achieve?  

  1. Enhance your reach  

Businesses should be where customers are, and customers are online. You can reach more customers with more payment options. For Instance, if you are a baker baking yummy cakes and cookies, Yes, your customers will drive all the way to reach your store for their favorite goodies.

But imagine the joy of serving your customers even better by delivering goodness at their doorstep. Giving them the luxury of ordering online and make payments hassle-free through QR scan or Pay-by-Link options via a user-friendly application.

In addition to this, you can reach out to all potential customers as well with your easy digital payment solutions. Delight your customers with an easy, fast, convenient payment option so that you are not just one of the options but THE option.

Give your customer the luxury of making payments in local currency and turn them into your brand advocates!

2. More customers mean more sales  

According to the Dubai Chamber of Commerce and Industry, the eCommerce industry in the UAE breached the 5 billion mark in 2021 and it is anticipated that there will be a 53% YoY increase.

This trend is not any different from other developed countries like the USA, France, Sweden, Finland, Italy, and developing countries like India, Thailand, and other Asian counterparts.  

Why limit your business to offline alone, when you can serve customers online and offline and increase revenue manifold?

3. Diversify your consumer reach over multiple channels.  

Every consumer is unique. As a business owner, serve your customers better by catering to their unique demands. A research-backed report by a leading advertising agency in the UAE, found that 73% of shoppers are omni-commerce shoppers. This means that their buyer’s journey will inl instore, direct mail, or even online experience.

They could be browsing for products online, visiting the shop during the consideration stage, and making the final buying decision after seeing a marketing mail with a link to make order and “Pay Now” options. To be able to give your consumer that Digital agility, your business must be powered with Digital Payment solution.  

4. Ensuring Secure transactions  

The biggest challenge while migrating to Digital payment solution is ensuring a secure payment gateway.   With technology gaining more and more power, cyberattacks, fraudulent online activities, data breaches, chargebacks are becoming commonplace. 

A robust Digital Payment solution should be PCI-compliant, 3D Secure authentication, and SCA-enabled so that your customers’ sensitive card details are safe and secure.  

5. Enhanced productivity  

Automating business processes not only saves time, effort, and cuts down operational costs, but will eliminate errors due to manual negligence.  

So, now that you have understood what Digital Payments can do to your business, what are you waiting for?   

Abzer’s Digital Payments Solutions are engineered to power your businesses’ specific requirements.  

Also Read-  Traditional Payments & Digital Payments- Definition, Options, Benefits