Accounting Best Practices, Fifth Edition

4–5. Issue Electronic Invoices through the Internet

The traditional invoicing process is extraordinarily wasteful in terms of the effort and time that goes into creating and issuing an invoice. It must be created and inserted into an invoice printing batch, which in turn requires the use of a customized invoice with prepositioned fields and logos, plus a review of the printed invoices, stuffing into envelopes, affixing postage, and mailing. Even then, there is a risk that the invoice will be lost in the mail, either due to a problem at the post office or because the recipient’s address has changed. Further, there are delays at the receiving company, while the mailroom sorts through the mail and delivers it internally (sometimes to the wrong person).

Some of these problems can be avoided through the use of e-mailed billings that are delivered through the Internet. There are several ways to do this. The least-recommended approach is to post the invoices on a company’s own Web site. This means that customers can access the company’s credit card payment system at the same time they access their invoices, which results in accounts receivable that are collected with inordinate speed. However, this approach requires customers to access the company’s Web site in order to find their invoices, which they are not likely to do (especially because this will result in their immediate use of funds to pay for the invoice). In addition, this requires an interface between the accounting database ...