B2B transactions refer to buying and selling between businesses. An invoice is a record that serves as evidence of the transaction and contains all the relevant information, including the products, product codes, quantity, transaction date, etc.
In the past, creating an invoice required writing down the details of the transaction by hand on paper, then that document was handed to the buyer by the seller. However, thanks to technological innovation, you can now create bills online.
In this article, we will talk about everything you need to know about B2B invoicing and how billing has become easy and quick. Keep reading further to know what B2B billing is, the benefits of electronic billing, and how you can structure an online invoice.
What is B2B billing?
B2B billing or B2B invoicing is when one business demands payment for products or services offered to another business. It occurs when a supplier submits an invoice to a customer so they can get paid.
A B2B invoice includes the price of the goods or services provided to the customer. Invoices that contain the following information can serve as legal documents that can be used to demand payments.
- Names of the buyers and sellers
- Details and cost of the goods or services
- Payment terms and conditions
What Should Be Included in a B2B Invoice?
As the invoice is a legal document, it is important to take care of and mention specific details in it. Whichever B2B invoice type you use, make sure that it contains the following information:
- your company’s name, address, and phone number,
- the name and address of the customer,
- a detailed listing of the goods and services,
- per-item flat costs or hourly rates,
- billing date,
- payment deadline,
- subtotal,
- value-added tax (if applicable),
- total amount
- B2B relations.
B2B invoice templates
There isn’t a specific B2B invoice format that all companies must adhere to. You can organize your invoice however you want, as long as you make sure to include all the necessary details to get paid on time.
However, people who work in the B2B sector should pay particular attention to employing templates. It’s quicker, simpler, and more efficient to use a template because you’re likely to request and receive a lot of payments.
Benefits of e-invoicing
Online billing from Maxbill is great for businesses for multiple reasons. Here are two of the major benefits of electronic invoicing.
Collecting payments is faster
As a supplier, you would want purchasers to pay you as fast as possible. And if you are forming an invoice and writing down transaction details by hand, it will consume a lot of your time and energy.
Sending paper-based B2B invoices requires you to manually create invoices, send them out, and then wait at least 30 days for the check to arrive. Additionally, you’ll need to deposit the check and wait for the money to show in your account. That is a slow cycle for payments!
Do you know what happens when a month goes by without receiving payments? Well, if your cash flow decreases, it may affect your ability to continue operating. Additionally, it may affect your ability to pay for future business obligations.
If you use B2B e-invoicing, you can avoid the annoyance of having to wait for your payments. With e-invoices, you can produce invoices automatically through your ERP system and transmit them to your business partners with a single click. So, you can collect your money immediately, and the buyer can get the payment request in a matter of minutes.
Convenient to customers
Some of your clients might like using their business or credit cards to make transactions. Maybe they just want to avail the opportunity of earning rewards by using their credit card, or they might want to manage their spending.
Another hypothetical scenario can be that the buyer cannot write a check on the company’s behalf. In that case, the buyer may choose to pay you with their business card. A credit card payment is also practical for certain small business owners who prefer to keep their personal and business finances separate.
B2B e-invoicing enables your client to choose the mode of payment that is most suitable for them. Sending more e-invoices allows your customer greater discretion over how they can pay you.
Conclusion
Businesses daily do multiple transactions and need to form multiple invoices as well. It is important to make sure that the details on the invoice are mentioned properly because it is a legal document through which a seller can demand payments. As we now know how significant B2B invoicing is, improving it and making invoicing efficient also holds significant importance. And for quicker, easier, and more efficient invoicing, we have electronic invoicing. In this technologically advanced world, e-invoicing is on trend.
Interesting Related Article: “5 Strategies to Improve B2B Performance Marketing“
