No matter how cutting-edge your technology is, how good your manufacturing operation is, how tight your financial goals are or how progressive and proactive thinking your organizations management techniques are, you still must have a sales mechanism in place, or else everything is useless.
Sales invoice is a tool that a company uses to converse with clients about the money that are due in exchange for goods or services that have been sold to them. A sales invoice must have following information:
- Items/services the customer has purchased
- Purchase Quantity
- Discounts, if received
- Total amount he owes.
Additionally sales invoice should cover a brief summary of the terms and conditions of the transaction, such as the tolerable lag time between the sale and the payment. Please note that this is from the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice.
All across the globe, companies generate sales invoices depending upon their annual sales figures. Data is the main part here, which is been used for calculating the annual profits and sales patterns of any company. These data’s are the backbone for any company and it also helps in providing the forecast for the upcoming month which help production, procurement and other allied department to set their targets.
Importance of Sales Invoice Automation
- Elimination of possibilities of manual error.
- Manpower costs can also be lowered as the job is efficiently done by automating the entire sales process.
- With the above process, the invoices can be digitally shared with other firms and clients who can further edit the data anytime for their suitability.
- With sales invoice processing company gets ample benefits like flexibility, reduction in file size, and the ability to edit.
Apart from above there are many benefits of sales invoice automation which ultimately leads to the growth and profit generation for the organization and thus, this is extremely helpful for the company in many ways.
Steps Involved in Sales Invoice Processing
The process is explained with the help of a flow chart or rather we say it a flow diagram. In the above process we have shown how sales invoice process works.
Problems and Challenges faced in Sales Invoice Processing
Today we have noticed a radical change in the functioning of accounts and sales department. With latest upcoming technology, companies try to earn and maximize their profits through various schemes like capturing discounts, penalty avoidance and focusing of low labour cost and improving the efficiency of employees.
Efficiency is the Golden Rule for the growth of any organization. Organizational success depends mainly upon efficiency from internal processes to labour performance to cash flow. Two key metrics of efficiencies in this segment are as follows:
- Time to process an invoice
- Cost to process an invoice
A study shows that average processing time of an invoice is around 4 days and average cost to process on invoice is approximately Rs 150. As per a survey by E-Payable benchmark series, best average processing time of an invoice is around 2 days and best average cost to process one invoice is Rs 100 approx. (Source: The E-Payables Benchmark Series: AP Strategies for Success, Aberdeen Group)
We hope sharing this data will help you in understanding about the significance of sales invoice processing system in any organization.