Why is Invoice Management so Important?
Updated: Jan 16
The importance of invoice management
If you work within a law firm or large commercial organisation, you’ll understand how difficult it can so often be to manage and monitor invoicing. Especially if billing and collections are split over two business areas, controlling cash flow and, particularly, invoices can become increasingly challenging. But why is invoice management important?
What is invoice management?
When we talk of invoice management, we’re referring to the internal business process of sending and receiving invoices for goods & services either provided or obtained to or from a business; ensuring said invoices are paid or payment is received, and a record is kept for further reference.
And, especially as a business grows, invoice management can easily become complex and challenging - often requiring specialist tools and software to appropriately complete the many tasks required within this process.
This is because invoice management encompasses the following tasks & activities:
New client research, validation and on-boarding
Client relations & communication
Creating, sending & receiving invoices
Payment support for a variety of payment options
Currency conversion (if necessary)
Payment reconciliation & reporting
Why is invoice management important?
Every business, big or small, long-established or fledgling start-up, relies on cash flow to succeed; ensuring payments for goods and/or services are received in good time which, in turn, enables you to pay staff or subcontractors on time, purchase necessary equipment or software, and invest in training where required.
It’s this that makes invoice management so important.
So, how can this process - arguably one of the most important processes of any thriving business - be made easier and less complex?
Making the invoicing process easier
One of the key ways you can make the invoicing process easier for your accountant or accounts department is by automation; automating confirmation emails, remittances or deductions in your ERP system.
Alongside this, receiving automatic updates from credit rating agencies enables you to adequately manage risk without taking valuable time away from your team.
Setting up clear and relevant payment terms & conditions is also a vital part of the invoice management process - providing new clients with an understanding of what’s expected whilst outlining when and how invoice should and can be paid - which, in turn, will help to encourage adequate cash flow.
To help businesses achieve a smooth and hassle-free invoice management process - supporting teams to monitor and report on vital metrics, we’ve created CreditForce; award-winning credit management software designed to optimise cash flow by offering intelligent solutions that address collections, risk and working capital management.