For product-based businesses, invoicing plays an indispensable role in facilitating transactions and maximizing operational efficiency.
Simply put, product invoicing is the process of creating a sales order and accepting payment for tangible goods.
Let’s explore some more in-depth ins and outs of invoicing systems.
The invoicing process, the journey of a product from order placement to payment, involves a series of well-coordinated steps that can be broken down into three key stages:
1. Order Placement
2. Invoice Generation
3. Payment Processing
Automating these steps at the point of purchase creates a seamless, user-friendly shopping experience for customers.
Invoicing systems have evolved beyond mere software solutions; they’ve become a keystone in the order-to-cash process. Their range of benefits serves both customers and your company’s team members; they improve customer satisfaction by enhancing front-end experiences, and they alleviate operational burdens by streamlining back-end operations.
Your company’s customers expect convenience and accessibility when engaging with online platforms. Invoicing systems make your company more appealing by providing:
While front-end benefits cater to customers, invoicing systems also polish up back-end operations:
Choosing the best invoicing system for your company depends on the scope of your business. Here, we’ll compare two of the most popular payment processing software options and in what contexts they work best.
Shopify is a full-service E-Commerce solution that allows companies without internal storefront platforms to build storefronts and process payments. It’s an outstanding product invoicing solution for businesses of any size that don’t require sophisticated customizable connections or reporting. Also, it’s ideal for all transaction volumes, is simple to set up, includes convenient shipping tools and savings, and includes inventory management tools.
Stripe is a tech-focused payment processing software that easily integrates with many outside tools and platforms. It’s best for companies that already have an internal platform who need more sophisticated integrations for operational and reporting purposes. This software is most advantageous for medium-to-large transaction volumes, providing a variety of payment options for customers, a more expansive global reach, and competitive pricing for international payments.
Before you decide on an invoicing software, you should review your company’s business requirements. This is a documented list of non-negotiable features that a system must contain for the business to scale and operate. These vary by business, but are vital to ensure compliance with governing authorities. It’s important to consider all avenues of a business when identifying business requirements, such as:
Businesses have to collect several data points—customer data, order data, and product information—for regular ongoing operations. Without that data, the company can’t carry out its obligations to customers.
Insightful reporting from your company’s invoicing software of things like margin analysis, sales by region, sales by service line, and product costs, helps you analyze performance and make informed choices.
Companies often make the error of overlooking compliance requirements when choosing an invoice solution. But failure to meet compliance obligations can lead to penalties and legal trouble, so check if the invoicing software has sales tax collection and reporting, integration with sales tax software, and sales by state and locality for income tax filings to avoid legal issues later on.
Invoicing systems go beyond routine transactions to become a catalyst for operational efficiency and customer satisfaction. Their customer-focused features and robust back-end tools smooth your company’s processes and inform your decisions. And, by aligning with business requirements, these systems contribute not only to the bottom line but also to the overall growth and stability of your business.
Proper use of these systems is key when preparing for long-term operations. If you have questions about implementing an invoicing system, or would like help choosing the best one for your business, please reach out.