What is invoice management? Effective invoice management process

1. What is invoice management?

Invoice management includes registering, collecting, backing up and preserving invoices on the storage system. For the seller, this process includes creating, invoicing and processing payments for the financial and accounting management purposes of the business.

Through the management and reconciliation of invoices, businesses can easily look up, compare and extract detailed information about financial transactions made. At the same time, businesses can also grasp the internal financial situation more comprehensively and accurately.

2. The role of invoice management

The invoice acts as a commercial document, but the invoice is also used as an accounting document or tax document. How to manage invoices effectively brings many important benefits to businesses as follows:

• Optimize resources in terms of time, manpower and opportunity costs.
• Support the process of looking up and checking invoices, making data processing quick and easy.
• Ensure transparency in business activities of enterprises.
• Prevent risks of storing invoices, avoid loss or loss due to fire or failure, and meet legal requirements related to financial transactions.

3. Invoice management process

3.1 Basic invoice management

Invoice management steps need to ensure accuracy and close alignment between stages for maximum efficiency. Here is a basic process to help businesses do this job reasonably and effectively:

• Invoice creation: Provide full information (seller, buyer, order code, etc.) to create invoice.
• Adjust and invoice: Edit the information on the invoice to match the contract or customer's request, then invoice to the customer.
• Store invoices: Take notes in books or back up to the business's system to look it up when necessary. This is the basis for controlling accounting and financial operations accurately and effectively.
• Prepare invoice reports: Prepare periodic invoice reports (weekly, monthly, quarterly or yearly) to evaluate business activities and promptly handle arising issues such as revenue and expenditure differences, purchase and sale contract disputes, etc.

3.2 E-invoice management

E-invoice management is similar to regular invoices. However, in this process, it is extremely important to manage and control input e-invoices. According to Circular 32/2011/TT-BTC, the storage of electronic invoices requires the following requirements:

• For sellers and buyers of goods and services that use electronic invoices to record accounting books and prepare financial statements: Electronic invoices need to be stored within the time specified by the Law on Accounting. If e-invoices are generated from the system of an intermediary organization providing e-invoice solutions, this intermediary must also store e-invoices during the above period.
• For sellers, buyers and intermediaries providing e-invoice solutions: It is necessary to back up the data of electronic invoices to information storage tools such as USB, CDs and DVDs, hard disks or perform online backups to protect the data of electronic invoices.

According to the law on storing accounting documents, both suppliers (sellers) and customers (buyers) must simultaneously store the original file of the invoice in .xml format along with a copy of the electronic invoice in the form of images (.pdf, .png, .jpeg) for a period of 10 years. This ensures compliance with the law's regulations on storing accounting documents.

4. 5 ways to manage electronic invoices for businesses

4.1 Create a new email to receive/send invoices

To avoid confusion between types of jobs, businesses should create a separate email to send and receive electronic invoices with customers and partners instead of using generic email.

Advantages:

• Easily manage and classify electronic invoices, minimize the possibility of missing invoices and confusion with other emails
• Accountants can easily manage and download electronic invoices to serve other accounting operations.

Cons:

• Authenticating information when requested by customers can take more time because the professionalism of the system is not high.
• Potential risk of data loss in case email account is lost or locked
• It is still necessary to perform manual accounting and statement steps on accounting software, which can easily cause errors when entering data.

4.2 Print e-invoice emails for storage

Once created or received from a supplier, e-invoices can be printed directly on paper for easy storage and manual management. However, data on e-invoices will be stored simultaneously both in emails and paper documents.

Advantages:

• No need to create new emails to send and receive invoices from customers and partners
• Avoid the risk of data loss when there is an email problem because the data is stored as a paper document.
• The implementation of this solution is simple, convenient and time-saving.

Cons:

• Printing is expensive and requires large storage space
• Accountants have difficulty looking up and checking the validity of invoices, at risk of being lost
• E-invoices also face the challenge of checking validity because there is no formal solution to do this.
• Accountants continue to perform manual statements and accounting, leading to errors in the data entry process

4.3 Save photos of e-invoice emails on computer

After creating an e-invoice and receiving it from a supplier, many businesses often store photos of invoices in a separate folder on the accountant's computer for easy tracking.

Typically, invoices are sorted and stored by day, month, year, vendor and invoice number to make search and retrieve more convenient.

Advantages:

• Easier to implement, manage and store e-invoices.
• Suitable for small or micro businesses and has few invoices arising in the purchase of goods and services.

Cons:

• Does not support simultaneous operation on multiple invoices.
• The manual process is time-consuming and complicated.
• Unable to filter and search invoices by provider.
• Checking invoices by eye can lead to errors.
• Risk of losing invoice data when the computer crashes.
• It is necessary to manually enter data into accounting software, which can easily cause errors.

4.4 Make excel files to list invoice emails

Excel is a popular software in managing and controlling invoices and other tasks of many businesses. When using e-invoice management solution, accountants can easily enter data from e-invoices via email to Excel spreadsheets to track and attach a lookup code link to the mailbox. After that, accountants can import data from Excel to accounting software and check and compare with the original invoice.

Advantages:

• Suitable for most accounting operations.
• Easily look up and classify invoices according to many different criteria such as supplier, date of purchase, type of goods or service.
• Especially suitable for small-scale businesses.

Cons:

• Manual input from email to spreadsheet and then into accounting software can lead to many errors and shortcomings.
• Time consuming when the number of bills is too many
• Finding the original invoice on the email and the corresponding information on the spreadsheet often takes a long time and risks leading to inconsistencies between different data sources.
• There is no solution to automatically check the validity of invoices

4.5 Using invoice management software

E-invoice management software is considered the most effective solution in overcoming the limitations of previous methods of managing and storing e-invoices. At the same time, this is also the most optimal form of management today.

Advantages:

• Save time and reduce the workload of accountants in receiving, classifying, comparing and checking invoices
• Limit errors in manual input.
• Automatically check the validity of the input invoice, including business information, invoice and digital signature in the invoice.
• Update data automatically and regularly, synchronize with business accounting software used.
• Easily search, look up and account for invoices when needed.

Note: To ensure efficiency in e-invoice management, businesses need to choose a provider of software and solutions with high reputation, using modern technology and support from a professional team with experience in finance and accounting.