Invoice automation: How automated invoicing works

• Invoice automation is the process of using software to automate invoice processing, reducing manual tasks and errors.
• Automated invoicing frees up professional services businesses to focus on more valuable business tasks and spend more time with their team.
• Automated invoicing software provides a range of features that go beyond basic automation, such as customizable templates, automatic payment collection, and detailed reporting.
• By implementing automated client invoicing using Ignition, professional services providers can improve efficiency, save time, and get paid faster.

As a professional services provider, it’s time to put your days of spending countless hours on manual data entry, manual invoice processing, and chasing down clients for payment behind you. Invoice automation is a game-changing option that improves your accounts payable processes, saves you time, and boosts your cash flow.

Read on to explore what invoice automation is, how it works, and the myriad benefits of using automated invoice processing software. You’ll learn not only why traditional paper invoicing is no longer the best option, but also the key differences between your average invoice automation and genuinely great invoicing software automation. Ultimately, it can vastly improve your business processes.

Invoice automation, also known as automated invoice processing software, is cutting-edge technology that aims to streamline the entire invoicing process. It involves using specialized software to create, send, track, reconcile, and report on invoices with minimal human intervention.

Invoice automation software can create invoices automatically based on preset intervals or triggered by specific events, such as your billing schedule, when your client signs, or when a project is completed. You don’t need to set yourself reminders to invoice clients anymore.

Once the software generates the invoices, it can automatically send these by email, again saving time and effort. What’s more, the automated invoice processing solution can also send reminders to clients at set intervals for overdue payments, ensuring timely payment and helping maintain positive cash flow.

When invoice automation is integrated with your accounting software and a client makes a payment, invoice automation can reconcile the payment against the invoice, saving the need for manual processes.

Invoice automation software can generate reports on outstanding invoices, paid invoices, revenue trends, and more, providing valuable insights into your firm's financial health.

By eliminating many of these repetitive tasks, automation clearly makes invoicing much faster and more efficient.

With automation, invoicing becomes a set-and-forget process that allows you to focus more on strategy and other critical business tasks, such as business development, client communication, and spending more time with your team.

Ignition's invoicing capabilities, for instance, take the hassle out of getting paid by collecting payment details upfront and automating payment collection from the moment a client signs your proposal. This means no more awkward client conversations or wasting time chasing down payments – Ignition automates the entire invoice process for you.

In fact, Ignition customers save an average of more than nine hours a week on billing, invoicing, collecting, and reconciling payments. It’s simply a more efficient invoicing process.

Indeed, one client, Oyster Hub, gained back more than 100 hours of administrative time and grew its business by 40% during the pandemic by automating invoicing, payment collection, and workflow.

Marie Phillips, Founder and CEO of Connected Accounting, likewise saw amazing improvements. “Using Ignition has probably saved me anywhere from 10 to 20 hours a month, not having to prepare engagement letters, track payments, call clients, review invoicing, approve invoicing,” she says. “All of that is gone.”

Research backs up their claims. A recent article in FinTech magazine entitled Automation in the workplace is an opportunity, not a threat, cited a study from the Institute of Management Accountants (IMA) and Deloitte that found controllers in the United States spend almost 70% of their time at work performing manual tasks. However, when they implement automation, they save an estimated six hours or more per week.

Still, too many professional services providers continue to rely on traditional – read: mostly manual – invoicing. This means you’re still creating and sending paper invoices by hand, using Excel, a basic word-processing tool, or worse, pen and paper.

It’s an outdated, time-consuming, and often error-prone exercise that involves manual data entry of client information, creating and sending invoices, tracking payments, and reconciling accounts. This approach can lead to inefficient processes, inaccuracies, and delayed payments, all of which can negatively impact both your cash flow and your overall business performance.

Automated invoicing works by integrating with your existing systems, such as your accounting system or payment gateway. Integrations with Ignition include Xero and QuickBooks Online, which let you leave the invoicing and reconciliation to the software as soon as a client accepts your proposal.

Zapier also offers the ability to connect your preferred applications to Ignition to further enhance your workflows and improve your business's efficiency.

Once you have your tech app ducks in a row, the first step in automated invoicing is collecting payment details from your clients upfront. Ignition's software, for instance, makes it easy for clients to pay automatically using a range of payment methods, such as credit or debit card, direct debit, preauthorized debit (PAD), or automated clearing house (ACH) – depending on where they are. Once a client's payment information is securely on file, the invoicing process begins.

With Ignition's automated invoicing capabilities, you can invoice a client immediately or schedule an invoice for a future date. (This means you’ll never forget to invoice a client again!) You can also set up recurring invoices, reducing the time and effort required to invoice clients regularly. This feature can improve cash flow (as we explain below) by making sure you get paid on time, every time.

In addition to automating and streamlining the invoicing process, automated invoice processing also provides valuable insights and data for professional services providers.

For example, by automating the invoice data capture and entry process, firms can quickly and easily access detailed information on their invoices, such as payment status, due dates, and payment history. This allows firms to more accurately track their cash flow and make more informed decisions about their finances.

What’s more, automated invoice processing software can often integrate with other financial tools, such as accounting software or payment gateways, further streamlining financial operations and improving overall financial management.

Of course, not all invoicing software is created equal. There are a number of areas to consider when choosing the best invoicing software for your firm.

• Payment collection: Average invoicing software may allow for only basic payment collection methods, such as credit or debit card.
  
  Other invoicing software, such as Ignition, goes the extra mile, offering a variety of payment collection methods, including direct debit, PAD, and ACH. This allows for greater convenience and flexibility for clients and can help make sure you receive timely payments.

• Customization: Rudimentary invoicing software may have limited customization options, such as basic invoice templates.
  
  Next-level invoicing software provides a range of customizable options, from personalized invoice templates to branding. This allows your firm to tailor your invoicing to your unique needs. It may also come with other customizable templates, such as proposals and engagement letters.

• Automation: Although all invoicing software obviously uses automation to some extent, the difference between good and great invoicing software is that the great products allow you to ‘set and forget’, with peace of mind, whereas some of the basic products still require some manual intervention.

• Integration: In all likelihood, you have an existing tech stack. So, you want invoicing software that offers seamless integration with your other business tools, such as accounting software, client relationship management system, and project management tools. This further helps refine your invoicing and payment processes and allows you to consolidate your tools and data, making the most of your technology.

• Customer support: Excellent customer support is a critical component of any software product, including automated invoicing software. A good software company provides technical product documentation, troubleshooting guides, and curated product training content that aims to help users learn and get the most out of their invoicing software. These resources ensure you can navigate any technical issues that may arise and use the software to its fullest potential, ultimately leading to a more successful and productive experience.

If you're ready to take your invoice payment process to the next level and unlock the full potential of your professional services business, watch an online demo of Ignition. Experience firsthand how Ignition can help you streamline the way you process invoices and revolutionize the way you do business.