All You Need To Know About Digital Invoice


A digital invoice is an invoice that can be shared digitally. These can be directly used in the accounting software. It is usually in the form of a word file or a PDF file or other times it can be just a scanned invoice. It is easy to understand and use since it is concise and present in digital form.

Benefits of digital invoice-

  • It frees one from the hassles of the manual handling of the invoice. Manual handling becomes a tedious task and increases the chances of error. In the case of digital invoices, the invoices can be processed and maintained systematically, in a simple, innovative, and reliable manner. The record of such invoices can also be maintained easily.
  • Maintaining the invoices manually in files and folders comes with a lot of cost in addition to the hassles. It would involve the cost of files, stamps, printing, envelopes, mailing, etc. However, these requirements are not involved in online mode. Digital invoices help in maintaining better control over these invoices.
  • The overall speed in the processing and related functions is increased which otherwise would have been slow in case of manual handling. The processes are performed online with a minimum human intervention which reduces the chances of error and also ensures that the work is carried out at a very fast pace.
  • It is easy to operate. The processes involved in physical handling become sometimes complicated and always requires the supervision of an expert with greater experience. However, in digital invoices, these processes can be easily done and no prior technical knowledge is required. It is simple and easy to operate.
  • The digital invoice has a shortened payment cycle. The long procedures of making an invoice, sending it to the purchaser, waiting for them to receive the same and initiating payment seems to be a very long procedure. However, with a digital invoice, the invoices can be sent directly to the portal of the purchaser and payments can be received as early as possible. Thus, digital invoices have reduced the payment cycles and made it easier for suppliers to get cash and other payments earlier than normal.
  • Concerning invoices, various accounts and databases are to be maintained which is to be regularly tallied or rechecked when the need arises. This process offline becomes very tedious and lengthy since the invoices have to be physically searched for in the files and folders with so many invoices. In the digital method, they can be easily fed and used for reconciliation as and when the requirement arises. This simplifies and eases the whole process of reconciliation.
  • It helps in improving relationships between suppliers and purchasers. Since the documents, invoices and payments are handled quickly and efficiently. This improves the relationships between them since all the transactions between will be processed fast leading to satisfaction of both the parties and thus, better dealing in the future.
  • Digital invoices lead to fewer disputes and rejected invoices. Since the record is maintained digitally and clearly, it can be extracted as and when the need arises. Thus, in case of any misunderstandings or doubts about the transactions, these invoices can be easily looked into and the doubts can be cleared as and when they arise. Also, the invoices are maintained and made in a proper format following all the rules and regulations. Hence there would be a very rare chance in which the invoices could get rejected. Thus, digital invoices lead to fewer disputes and misunderstandings.
  • It leads to customer satisfaction as well. Since the documents and the information is maintained online, a high degree of transparency can be ensured. This will clear the doubts of customers if any regarding whether the suppliers did any misconduct while doing the business or the transactions. Customer satisfaction, thus, is another benefit that these digital invoices provide.
  • Digital invoicing allows businesses to have a better online platform. Since it is known that all the processes, operations, and businesses have shifted their operations to online mode, the digital invoicing would complement the entire online processes of the business, such as making their online presence stronger and better. It will allow them to stand out in comparison to their competitors and grab a greater customer base.

Apart from digital invoices, new types of invoices are also coming,

  • Web invoices: This allows suppliers to directly upload the invoice on a portal which will be in the form of a pdf and can be directly downloaded by the purchaser from the portal. It has to go certain procedures of standardization and digital signatures by the parties so involved.
  • Smart invoice: This also allows in transferring the invoice from supplier to purchaser directly without the involvement of a third party. It allows in smooth transfer, i.e. B2B transfer without any further dependence on the third party.
  • Integrated invoice: In this, the invoice so generated can be opened by a respective party only after certain criteria are fulfilled. It cannot be freely opened by anybody. It involves integration between the parties involved in a particular invoice.

The digital invoice is very different from the electronic invoice.

  • A digital invoice can be easily understood by humans, which is not the case with the electronic invoices.
  • The digital invoice is in the form of a pdf or a word file. However, an electronic invoice is simply an invoice that can be shared among computers.
  • The electronic invoice is always digital whereas digital invoice may or may not be always an electronic invoice.

It is evident, how beneficial these digital invoices are. They are a revolutionary step in the payment mechanism. Along with providing greater efficiency, flexibility, transparency, they also help in the smooth conduct of business. This reduces the overall burden of the suppliers or any other parties involved in invoicing. It benefits the reduced cost and reduced hassle. Thus, more and more use of these digital invoices needs to be made so that the whole system becomes more reliable and authentic. Many digital invoice application that provides various benefits to the parties. These applications are reliable and provide better service, more security, and improved productivity.


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