Managing a business online requires a lot of skills, additional effort, and knowledge. From managing stock to shipping, all of the tasks should be done with the proper action of paying close attention. Among these tasks, the most important task you can cherry-pick is to deal with the transaction process with the related parties. The invoicing system is the most essential thing to handle the transaction with all necessary and legal documents and is like a whole nine yards!
If you are selling physical products or services, invoicing is probably an important task for you on a daily basis. You might be using an invoice template where you need to fill in all information manually every time you want to create an invoice. Despite that, you might be using an automated system to generate all of your invoices!
Since you are selling your products online, WooCommerce is one of the most popular, customizable, open-source eCommerce platforms built on WordPress. Therefore, to deal with the invoice system, you need to have a proper idea of how WooCommerce invoice systems are set in motion.
What is an Invoice?
An invoice is a commercial document that itemizes and records a transaction between buyers and sellers. The document emphasizes the details of agreed terms and conditions as well. It includes the service or the products purchased with discounts and taxes. It also includes order numbers, notes, terms and conditions, and available payment information in case of credit purchase.
Invoice Management System
The invoice management system is a structured platform to manage all the invoices and related documents shared between the buyer and seller during the transaction process.
There are multiple steps involved in the transaction process – starting from a customer deciding to purchase a certain product/service; to come to mutual terms between the buyer and the seller.
Further creating a purchase order with the quoted pricing rates, discounts, shipping rates, etc. Once this PO is verified by the seller as well, the invoice is generated dictating the final terms and conditions. The generated invoice is shared with the financial department and the customer at the final stage when payment is made.
On many occasions, sellers go through such situations when a customer rejects a completed order. In such cases, a generated invoice is needed to postpone and this causes troubles at the end of a financial year while closing books.
To avoid such issues, it is advised to cross-verify the orders for the ordered products or services and the orders should be approved by the manager. It is also recommended to specify whether it is possible to link the invoice with the existing suppliers or not.
It might seem a little complex, but the invoice management system is rather a walk in the park. Preparing manual invoices by the sellers needs extra effort while replacing manual invoicing with e-invoicing makes the whole thing like anyone can do it with their eyes shut.
WooCommerce Invoice System
Generate invoices with Woocommerce Invoice System. WooCommerce itself is a very powerful plugin that helps you create online stores pretty easily. But if you are looking for more than what is provided by WooCommerce out of the box, you can go for coding only if you are good at it. WooCommerce is such a plugin that is very flexible and it can be extended with other compatible plugins.
Benefits of e-invoicing
Electronic invoicing is the processing of sending or receiving digital transactional documents between buyers and suppliers with the help of electronic mail or any automated software. An electronic invoicing system should wholly be electronic so that data from the suppliers can be integrated directly into the buyer’s system. The benefits of e-invoicing are mentioned below-
1. Faster Payment and Improved Cashflow
While processing an invoice manually takes a lot of time. Creating a PDF of an invoice, printing, and sending it to the buyers for approval takes time. There’s also the possibility of the invoice being lost. On the other hand, electronic invoices are accessible on the buyers’ system and can be routed faster for acceptance. Since the invoices are created on time, it improves the cash flow.
2. Enables Online Invoice Payments
Instant payment policy does not work for all businesses. To deal with any business, having debts and credit payments is a day-to-day practice. To get the payments from the debtors faster, an invoice management system automatically or via email can be quite helpful in this scenario.
3. Easy Communication with the parties
To process a complete transaction, multiple types of documents are required. While maintaining manual setups, it was very strenuous to share each document manually. Since no particular records are kept in this way, this doesn’t reflect a reliable method.
However, with the help of this method, it is much easier to look into the invoice history from the customers. It is also unchallenging for the customers to contact the sellers like a flash.
4. Access to old invoices and recipients
Since the electronic invoicing system is equipped with a supplier’s portal, it allows the supplier to track the invoice status and payment information. This supplier portal also facilitates by giving access to old invoices and recipients which is very essential to evaluate financial year outcomes.
5. Reduce Costs
The adoption of e-invoicing helps suppliers to reduce the costs associated with printing, processing, delivery, and types of paper needed. Electronic invoicing increases accuracy which means it determines fewer customer service and less time is required.
6. Fewer disputes and rejected Invoice
When a customer decides he is not responsible to make the payment due to something that might not be true or accurate with the invoice is regarded as a disputed invoice. Invoice disputes and rejections are time-consuming and costly and they can lead to late payments. But with the help of an e-invoicing system, an invoice is sent to the customer end, decreasing error rates caused by manual data entry. Accordingly, the potential of invoices being rejected is also diminished. Real-time availability of data with tax authorities will lead to a reduction in fraud.
7. Improved Customer and Supplier Relationship
Since e-invoicing has a faster processing time and has fewer payment issues, providing a higher level of customer support is easy as pie. The result is a higher rate of customer retention.
To improve and strengthen the relationship between customers and suppliers, an efficient payment method is a must need. This will render improved customer satisfaction and a more streamlined supply chain.
8. Facilitate Automation
The benefits of e-invoicing for buyers are greatly enhanced if the e-invoicing solution comes equipped with a supplier portal. It enables suppliers to track the status of invoices as well as the approval and payment information. Suppliers can see if their invoices have been received, which have been approved, and which have been submitted for payment. As a result, the need for follow-up calls is markedly reduced.
9. Shorten Payment Cycles
E-invoicing allows suppliers for faster processing which in return, shortens the payment cycles. To get an early payment, suppliers are always ready to offer discounts. This facility brings more clients and hence shortens the time period.
10. Carbon footprint
E-invoicing genuinely eliminates the need for paper. In addition, no energy is wasted in producing and transporting e-invoicing documents.
11. Better Account reconciliation
Every customer’s challenge is the reconciliation of the invoices issued to the customers against the payment received. Customers can create completely a new invoice by attaching multiple invoices and can make a single payment. Moreover, such payment amounts and payment methods can be mismatched from the original invoices due to various reasons, such as customers claiming deductions due to damaged goods.
For example, a supplier may issue 3 invoices and each has a payment amount of 2000 USD and may receive a single payment of 5000 USD. In this case, the supplier has to contact the customer to clarify details about the payment.
In brief, customers can send detailed information of the invoices paid with the payment to simplify account reconciliation.
How WP Ever Accounting Plugin helps you Manage Woocommerce Invoice System
WP Ever Accounting is not only an invoice generation plugin but also it deals with tracking income and expenses, maintaining the cash flow of multiple accounts in multi-currencies. The invoice generation becomes a doddle when you have options to create items, customer and vendor profiles. WP Ever Accounting facilitates you by selecting necessary information from the listings and helps you generate invoices in a sec! You can also manually add order number, invoice number, note, and terms and conditions while generating an invoice. WP Ever Accounting also gives you the option to customize invoice templates.
Add Invoices using WP Ever Accounting
Invoices help you to keep legal records of your sales by tracking the number of goods sold, date of sales, how much money was paid. Invoices include both taxes and discounts when necessary. WP Ever Accounting allows you to add invoices so that you can keep track of your sales more effectively.
How to Generate Invoices
To add invoices based on your sales; first of all, go to Sales and click on Add Newstyle=”font-weight: 400;”> from the Invoices page. By clicking on Add New the following page will appear where you can add invoices-
To add invoices, you need to select a customer from the list. If your customer is not enlisted, you can add a new customer directly from the invoice generation page. In general, when you want to add invoices, the currency that appeared in the invoice is the default currency.
But you can choose a currency from the drop-down menu that you have added before. If the currency that you want to select for the invoice is not enlisted, you can create the required currency from the invoice too.
By inserting the necessary information and adding item/s, you can submit the invoice you want to generate.
Adding items to Invoice
Adding items to the invoice is the most significant undertaking. The price of items in the invoice can only be determined by adding items. While choosing items, you can choose multiple items from a drop-down list.
While adding an Item, one has to deal with the following price entities-
- Select Item
Item name holds the name of the items. This field gives an option to edit the name of the item.
- Price
This field holds the individual price of each item. Provided that, the currency of the item will depend on the currency chosen. Suppose, the default currency is set to USD but the currency chosen while creating an Estimates is GBP. Therefore, the price will be converted to GBP at the time of adding items. The total amount will also be generated as the chosen currency.
- Quantity
This field holds the number of items. If multiple items are selected, each of the item’s quantities can be changed.
- Tax
This field holds the taxation on the items. Tax can be either inclusive or exclusive.
- Discount
Discount has two types- Percentage and Fixed. If a fixed is selected, the discount amount will be calculated as fixed. If the percentage is selected, the discount amount will be calculated in percentage.
Few other popular plugins deal with automatic invoice generation such as WooCommerce PDF Invoices & Packing Slips, WooCommerce PDF Invoices, WP invoicing, etc. These plugins handle the Woocomerce invoice system and can be printed from the order page.
To sum up, the purpose of invoicing is one of the most essential tasks to run an authentic business store. Businesses need to create invoices so that suppliers can be sure of getting paid from their clients. It just makes everyone’s life easier and simpler.
Related Reading: 6 Best WooCommerce Accounting Extensions to Grow Your Business