What Is Invoice Management? The Role, Forms, and Process of Effective Invoice Management

Vũ Khôi

Author at Wotech Electronics Blog

Invoices and documents are essential records of a company's financial transactions, purchases, investments, and commercial exchanges. For that reason, invoice management plays a very important role in tracking and controlling a company's operations and business situation. In this article, let's explore the concept, methods, process, and the top effective e-invoice management software trusted by many businesses in today's Industry 4.0 era.

What Is Invoice Management?

The Concept of Invoice Management

An invoice is a document issued by the seller requesting the buyer to pay for the goods listed on it, with their quantities and unit prices. Once payment has been made, the seller confirms it on the invoice by signing or stamping a "paid" mark. Invoices therefore also serve as a receipt or proof of payment.

Building on this definition of an invoice, for the buyer, invoice management can be explained as the work of registering, collecting, backing up, and storing invoices in an archive system; for the seller, it is the process of creating, issuing, and processing invoice payments to serve the company's financial and accounting management. Through the invoice management process, a company can easily look up, reconcile, compare, and extract detailed information about the financial transactions it has carried out, and understand its internal financial situation comprehensively and accurately.

The Role of Invoice Management in a Business

An invoice functions both as a commercial document and can double as an accounting or tax document. It is therefore an extremely important type of record, both from a financial management standpoint and from an accounting and tax management standpoint for organizations and businesses.

Effective invoice management brings a business many benefits, such as:

• Saving resources (time, staff, and opportunity cost).

• Making it easy and quick to look up and reconcile invoices and data.

• Ensuring transparency for the business.

• Anticipating storage-related risks (loss, fire, or damage) and legal risks related to financial transactions.

Forms of Invoice Management

By Invoice Type

• Sales invoice management (direct invoices): Managing transaction documents that record the purchase and sale of goods and services when selling goods or services domestically, exporting to non-tariff zones, and in cases treated as exports (for organizations and individuals declaring and calculating value-added tax under the direct method); when selling goods or providing services domestically, and when selling goods or providing services between organizations and individuals within a non-tariff zone (for organizations and individuals in the non-tariff zone).

• VAT invoice management: Managing the invoice type for organizations declaring and calculating value-added tax (VAT) under the deduction method for the following activities: (1) selling goods and providing services domestically; (2) international transport activities; (3) exporting to non-tariff zones and cases treated as exports.

• Managing other invoice types: Includes (1) managing stamps, tickets, cards, insurance premium receipts, etc.; (2) managing air freight charge receipts, international transport charges, bank service fee documents, etc., in accordance with international practice and relevant laws; and (3) managing documents printed, issued, and used like invoices, such as internal warehouse release–transport slips or warehouse release slips for goods sent to agents.

By Format and Management Method

• Manual invoice management: Managing traditional paper invoices by manually entering and exporting information into the company's books. With traditional paper invoices, invoices should be carefully preserved and managed in an invoice ledger. However, manual storage and a lack of clear organization can make it difficult to control and locate invoices.

• Electronic invoice management: Managing invoices created on computer systems and stored in the memory of regulatory authorities as required by law. In the era of the Industry 4.0 technology revolution, digitization is an inevitable trend for this work. Quickly grasping the e-invoice management process and using management software is therefore an urgent requirement for any business today.

The Invoice Management Process

A Guide to Basic Invoice Management

An invoice management process is considered effective when it ensures accuracy and tight coordination at every step. Below is the basic process that helps a business carry out this work in the most sensible and effective way.

• Create the invoice: Provide complete information (seller details, buyer details, order number, etc.)

• Adjust information and issue the invoice: Edit the invoice information to match the contract or the customer's request; then create and print the invoice issued to the customer.

• Store the invoice: Record it in the books or back it up in the company's system for later reference. This is the foundation for the business to control its accounting and financial activities effectively and accurately.

• Report on invoices: Prepare invoice reports periodically (weekly, monthly, quarterly, or annually) to evaluate business performance and handle issues promptly when problems arise (discrepancies in revenue or expenses, sales contract disputes, etc.).

A Guide to Electronic Invoice Management

Compared with traditional invoice management, how does the e-invoice management process differ? To answer the question of how to manage e-invoices, this article will suggest a method for managing input e-invoices and introduce effective, secure management systems for businesses.

Overall, the e-invoice management process still includes the same steps as the conventional process. In e-invoice management, the stage businesses need to pay the most attention to is input e-invoice management. Under Clause 1, Article 11 of Circular 32/2011/TT-BTC, e-invoice storage must meet the following requirements:

• For the seller and buyer of goods or services using e-invoices for bookkeeping and financial reporting: Store e-invoices for the period prescribed by the Accounting Law; if the e-invoice is created from the system of an intermediary organization providing e-invoice solutions, that intermediary organization must also store the e-invoices for the period stated above.

• For the seller or buyer that is an accounting unit, and the intermediary organization providing e-invoice solutions: Back up e-invoice data to information storage media — for example, USB drives, CDs and DVDs, hard drives — or perform online backups to protect e-invoice data.

Both the provider or business (seller side) and the customer (buyer side) must store in parallel the original invoice file (.xml) and the visual representation of the e-invoice (.pdf, .png, .jpeg) in compliance with the law on storing accounting documents (10 years).

Top 3 Popular E-Invoice Management Software Today

SimERP Invoicing E-Invoice Management Software

Odoo is one of the enterprise resource planning (ERP) software packages pre-programmed and ready for businesses to download and use. With 1,000+ features covering all business needs — such as Sales, CRM, Project management, Accounting, and Inventory — the open-source Odoo ERP software, with its comprehensive solution suite, flexibility, and high security, now attracts more than 5 million users worldwide.

Among the default modules provided by SimERP, the Invoicing software is a leading e-invoice management solution suited to small and medium-sized businesses. With the Invoicing application, managing company invoices has never been faster or easier. From contract management, recurring invoices, and invoice issue logs to payments — everything can be done right in the Invoicing app on SimERP.

Key Features of Invoicing on the Odoo ERP Platform

• Automatic invoicing based on sales orders, delivery orders, contracts, or time.

• Easily create invoices from quotations already sent to customers.

• Send professional invoices directly to customers with a single click.

• Automatically email invoices as PDF attachments, or print and mail them.

• Online payments with automatic tracking through a variety of payment gateways such as Paypal, Ingenico, Buckaroo, Stripe, Authorize.net, Atos Worldline, or Adyen.

• Eliminate the hassle of sending reminders for late or outstanding payments.

• Track bank transactions and invoice payment status.

• Easily analyze sales based on the invoice database.

Notably, with SimERP, businesses can try the invoice management software free for 30 days with the SimCRM package. Register now to experience the Invoicing application on SimCRM's accounting software platform!

MISA meInvoice E-Invoice Software

MISA meInvoice e-invoice software lets customers manage e-invoices easily and effectively thanks to features such as:

• Downloading issued e-invoices

• Automatic online storage on the system to ensure information security and safety.

• Lets the business download invoices at any time in XML or PDF format.

• Supports both download modes: individual invoices and batch downloads.

• Looking up and searching e-invoices

• Search with pre-set filter criteria in the software, such as status: not yet issued, being issued, issuance failed, and issued.

• Search with optional fields such as: invoice issue date, invoice code, issuance status, and invoice delivery status.

• Viewing e-invoice reports

• View and print statistical reports related to e-invoice management activities at the business: invoice usage reports and statistics on issued invoices.

• Records the history of invoice information updates so all relevant parties can check and verify information.

KiotViet Software

KiotViet is software that strongly supports invoice printing features, flexible invoice template customization, and large-volume invoice management for businesses. Some notable advantages of KiotViet's invoice management software include:

• Unlimited storage of all invoice types on a cloud computing platform.

• Classifying invoices by payment method: cash, card, and bank transfer.

• Easy invoice lookup with criteria such as invoice number, time, customer information, and invoice value.

• Multi-channel invoice management, with invoices classified by each individual sales channel.

Summary

It's fair to say that invoice management doesn't demand a high level of specialized expertise, but it does require significant resources when a business must handle a large volume of related documents. Applying e-invoice management software to the company's operations is therefore an inevitable trend, especially in the Industry 4.0 era. We hope the sharing above has provided useful information to help your business understand invoice management methods and choose the software solution that fits your company's needs.

To get your questions answered and receive further advice on implementing e-invoice management software at your business, leave a message in the comments below this article or contact SimERP right here!

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