As a business owner, you love getting paid. But what about the actual billing and invoicing process? Unfortunately, if you want to get paid, you need to send (and oftentimes chase after) invoices. It’s a tedious but necessary part of running a business.
Accounting automation, specifically automated invoicing and billing, can help uncomplicate and streamline this process. But more than that, it can help grow your business.
Here’s four ways how.
#1 Put Your Capital Toward More Productive Use with Accounting Automation
Efficient capital allocation might seem complex, but the concept is simple: when you save money on your billing process, you’ll have more money to put toward growing your business.
Which begs the question—how much money can you save through accounting automation and automated invoicing?
Of course, the answer to that will vary from business to business. But let’s take a look at the statistics. SCORE, a non-profit organization dedicated to helping American small business owners succeed, did its own analysis of small business accounting. It found that 46% of small business owners spend over $5,000 a year on accounting and taxes, with 28% spending over $10,000, and 16% spending over $20,000.
That’s a lot of potential savings that could be put to much better use.
Of course, those are the broader aspects of accounting costs. What about just billing and invoicing costs? A report by SAP Concur found that it costs $12.90 on average to process a single invoice. The report’s recommendation? Automation, which it found resulted in a 29% reduction in average invoice processing costs.
Another report by IBM subsidiary Sterling Commerce had an even stronger finding—44% cost savings on accounts receivable invoices through automated electronic invoicing. It also mentioned another cost you may not have thought about—fines from tax authorities. Automated invoicing had 37% fewer errors compared to manual invoicing. And fewer errors means a lower chance of getting audited by the IRS.
The bottom line is this—if you’re not using automated invoicing and billing, you’re leaving money on the table.
#2 Stop Wasting Time and Work on Growing Your Business Instead
Time is money. But while wasted money can be earned back, wasted time is lost forever. There aren’t any formal statistics on exactly how much time small businesses spend creating manual invoices, but you can get an idea by simply asking yourself the following questions:
- How much time do you (or your staff) spend on the entire billing process (including invoice creation, follow-up, reminders, late fees, etc.)?
- If you spent less time on billing, how could you use that time to help hit your business growth goals?
At the end of the day, that’s the power of automation.
#3 Improve Your Cashflow and Hit Your Business Growth Goals Faster
How much better would your cash flow be if every one of your clients paid on time? Maybe you’re one of the lucky ones, but most small businesses aren’t so fortunate. Here are a few sobering statistics:
- $825 billion in unpaid invoices (~5% of US GDP!) is the total estimated owed to US small businesses
- $84k is the average of unpaid invoices for small businesses in the US
- 81% of small business invoices are 30 days past due
- The average small business only has 27 days of cash reserves
- It takes an average of 21 days for small businesses to get paid
Looking at these statistics, it’s easy to see why a US Bank survey found that 82% of small businesses in the US fail because of poor cash flow management. Cash flow truly is king—without you, you can’t grow your business.
Automated invoicing and billing software has many benefits. Here are a few ways automation can help your billing process:
- Ensures you won’t send invoices late by mistake
- Makes it easy for your customers to pay through a self-service online payment portal
- Allows you to send reminders before and after the payment due date
- Reduces invoicing errors which avoids double-work and lengthier processing and payment times
#4 Retain More Customers and Boost Your Business Growth
Everyone knows that customer retention is important—but how valuable is it? A study by Bain & Company found that a 5% increase in customer retention could translate to a 25% increase in profit. That means putting effort into customer retention has a 500% ROI!
Simply put, better customer retention equals better business growth.
So, how can automated invoicing improve your customer retention? The answer is professionalism. The more professional a customer perceives your business, the more likely they will remain your customer. This makes intuitive sense—just ask yourself, would you want to keep doing business with a company that didn’t seem professionally run?
Automating your billing is an easy hack to instantly raise your business’ credibility in the eyes of your customers. First, it helps you avoid the negatives. Mistakes on your invoices and sending late invoices are a surefire way to damage your business’ reputation. Reduce or avoid these mistakes by removing as much of the potential for human error out of the equation as possible.
Next, the positives. Every single interaction your business has with its customers affects their perception. A display of professionalism even in a seemingly minor way, like billing, can have an outsized effect on their perception and ultimately, whether they choose to continue using your products or services.
Biller Genie Allows You to Stay Focused on Growing Your Business
Growing a small business is hard enough. Let Biller Genie help you succeed by automating your invoicing and accounts receivable. Not only will you free up time and money, you can improve your cashflow and your business’ reputation. Our software also integrates and syncs with popular accounting software for small business, like QuickBooks Desktop, QuickBooks Online, and Xero, making it a natural extension to existing accounting automation.