Invoicing is how businesses bring in revenue, making it an important part of the day for accounting teams. To help streamline the process, we've surveyed over 1,000 working Americans and identified the biggest issues businesses face when it comes to sending and receiving invoices. Let's see how business owners, freelancers, and workers with extensive invoicing experience weighed in.
There are many reasons why a business might run into problems with invoicing. First, we'll look at the biggest issues across different industries.
When we asked respondents about the invoicing issues their companies most commonly experience, their top 3 problems included:
Companies within the finance, food, and health care industries were the most likely to have missed payment deadlines because of invoicing issues. The tech industry followed closely behind, with nearly 40% reporting missed payments. Respondents also reported struggling with the following:
Almost a third of respondents said errors in data entry and calculation were a problem. It's an especially frequent issue for those in food and hospitality, and it can also be a costly one; bad billing data costs U.S. businesses an astronomical $3 trillion a year.
Invoicing issues don't just result in missed revenue; they also waste time. We determined workers spend an average of 44 minutes a week (38 hours annually) fixing invoicing problems. Those working in the finance sector wasted the most time: 50 hours a year!
Late invoices are common in the U.S., with over 80% of our respondents saying their company has lost revenue because of missed payment dates. Workers who handle invoices extensively also said it usually takes over three months to recover this money. And according to another recent Skynova study, invoicing errors cause 61% of late payments.
Because of all the problems associated with invoicing, it was also worth finding out how businesses keep track of their invoices and which methods work best.
Many businesses are trying to stay ahead of the curve when it comes to digital transformation. In fact, spending on digital transformation by businesses is expected to reach $3.4 trillion globally by 2026. Though we found 41% of companies use accounting software to keep track of invoices, some still rely on outdated methods, such as spreadsheets (29%) and manual bookkeeping (11%). The most common industries using outdated methods were:
Meanwhile, the finance, health care, and tech sectors were more likely to track invoices through accounting software and cloud-based invoicing software. These digital methods also had the highest percentage of effectiveness, according to our respondents, making them the top two best ways to track invoices. Those who used accounting software were also less likely to struggle with keeping track of invoices.
Given these invoicing issues, it's no wonder some industries are unsatisfied with their invoicing processes. Who's the most dissatisfied, and what process do they think would work best?
Overall, a majority of respondents (51%) said that they were unhappy with their current invoicing processes. Respondents in education and health care were the most dissatisfied (at 56% each), while those in marketing came in at third with 54%. Analyzing our data, it's clear that poor invoicing processes stretch across a wide variety of industries.
Professional accounting software and cloud-based invoicing proved to be the two most desired solutions to invoicing problems, with most respondents (64%) naming at least one of them as the best solution for their companies. Accounting software and cloud-based solutions can reduce the chance of inputting the wrong data, which might explain why it has such demand among those we surveyed. Their efficiency and ease of use could also be why more than 64% of small businesses in the U.S. use accounting software.
Bad invoicing practices can result in a loss of revenue and productivity, but these issues range from industry to industry. But across the board, many would like to see their company's invoicing processes updated and improved. Professional accounting software or cloud-based invoicing seem to be the methods they most want to see implemented in order to solve these problems.
Skynova helps small businesses get paid quicker and easier. Our online invoicing templates make generating invoices fast, simple, and effective.
For this campaign, we surveyed 1,009 employed Americans (business owners, freelancers, and workers with extensive invoicing experience). Among them, 51% were men, 47% were women, and 2% chose not to say.
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