In an October 25, 2010 article, computing.co.uk reports that retailer Tommy Hilfiger has recently opted to use e-invoicing, one of the standard tools used by online accounts receivable factoring service providers worldwide. According to computing.co.uk’s account: “The retailer said the solution will enable it to reduce the cost of its cross-border and domestic trading by automating customer invoicing processes. Tommy Hilfiger’s accounts receivable department processes on average 33,000 invoices per month from
4,000 customers. The retailer said that it wanted to improve profits by ensuring that all invoices are processed so they are paid on time and in full. An end-to-end audit of accounts receivable processes found that invoices cost about €1 (89p) each to print and post internationally and additional costs were incurred through lost receipts and time taken to rectify errors and chase up receipts.”
Computing.co.uk further reports that Frederick Kolff, vice president of credit management at Tommy Hilfiger, had the following to say about the move to e-invoicing:“As a result, our invoicing costs are reduced and our DSO [days sales outstanding] will improve. Equally important to us is that we can have a positive impact on the environment from e-invoicing owing to the huge amount of paper we will save.”
Electronic invoicing systems save time, money, and resources while reducing companies’ environmental impact dramatically. Of course, most small businesses do not have the resources necessary for effective e-invoicing. Accounts receivable factoring providers, however, use these very systems every day.
By switching from a traditional, in-house accounts receivable department to utilizing invoice factoring services, small businesses can reap the benefits of e-invoicing while also enjoying the significant advantages of accounts receivable factoring:
- Invoice payments in about two days,
- Accounts receivable management assistance,
- Limited credit risk,
- Collections assistance,
- Documentation and report generation and maintenance,
- And a marked reduction in accounts receivable costs.
