8 Invoicing Trends To Follow And Stay Up To Date In 2022Written by Ana Mladenovc on February 21, 2022
Did you know that we can trace the oldest invoice to 5000 BC in Mesopotamia, where merchants used to carve details of transactions on clay and stone tablets?
Officially, the oldest invoice in modern history was written by the famous painter Hieronymus Bosch, who used it to get payment from King Philip the Handsome, of Castile, in September, 1504AD.
Since the earliest of times, people used clay, bone, and stone to cast invoices and keep track of their transactions.
While today we don’t use bones nor clay to keep track of our finances, the habit of sending and receiving invoices remained.
Invoicing is obligatory for small businesses and freelancers since it allows them to get paid for their services, track their income and expenses, and declare their income to tax authorities.
Considering the importance of proper invoicing both for freelancers and businesses, I decided to take a dive and explore the most prominent invoicing trends for 2022. Let’s see where my research led me!
Trend #1: E-invoices will take the charge
Digitalization allowed us to streamline many time-consuming processes and focus our efforts on more meaningful things. Invoicing niche included.
Given it comes with a wide array of benefits, electronic invoicing is something that will experience exponential growth in the following year.
Here are just some of the reasons why electronic invoicing is more convenient compared to the paper one:
- Electronic invoicing is convenient. According to Millo’s research, there were over 1.2 billion freelancers around the globe in 2021. This means that one-third of the global population freelanced in the past year. Let’s say that each freelancer has around 20 to 30 clients every year. Imagine how long it would take them to send paper invoices to each of them? How much time and resources they’d lose just to get paid? Electronic invoices enabled us to streamline the invoicing process and organize our payments more efficiently.
- Electronic invoicing saves money. Electronic invoicing saves money since the cost of a single invoice drops to more than a half when using e-invoicing instead of paper and PDF invoices. The fact that we don’t have to print an invoice and use envelopes and postages put us at a severe advantage.
- Electronic invoicing is fast. Immediacy is another great benefit of e-Invoicing. Just like in other fields, digitalization of invoice processing significantly reduces time spent on their management and allows their better tracking and monitoring.
- Electronic invoicing is more accessible. E-invoicing is more accessible compared to its paper counterpart. Far from heavy folders containing tons of paper, digital documents allow for quick access with the same (or even better) safety level. With an e-invoicing system in place, we can access all our important documents regardless of our location, which improves our time management, and allows us to resolve any issue that may arise on the go.
- Electronic invoicing improves payment management. Electronic invoicing records payments allow us to track our spending and earnings more easily. When we have all the information we need to be documented and stored, there’s less chance for fraud.
Trend#2: E-invoicing will be mandatory
Besides being the preferred way of managing invoices, e-invoicing will be mandatory in many countries by the end of this year.
Given the benefits it brings, such as reducing the invoicing cost for 60% to 80% compared to paper ones, and the fact it decreases the time they need to get to the client, we can understand why is this the case.
Countries around the world are insisting on using e-invoicing systems. Brazil, for instance, is applying e-invoicing solutions across various industries, and Columbia introduced a new electronic billing model in 2019 that aimed to help over 800,000 businesses adopt the technology.
As for the U.S, it’s estimated that the U.S. government spends more than $300 million for paper invoicing in the goods and services sectors. Those expenses are motivating enough for government leaders to implement e-invoicing systems to save money.
In the EU, around 14 million companies are using e-invoicing systems, and the number is expected to grow at 10-20% each year.
Choosing electronic invoicing over paper methods enables businesses to address payment issues immediately, which strengthens professional relationships. Workplace productivity will also be improved given team members won’t be spending time on repetitive invoicing tasks.
Trend#3: Personalization will be desired
Believe it or not, personalization plays a significant role in our everyday lives. Statistics show that more than 70% of consumers are frustrated when the shopping experience isn’t personalized. 91% of them would rather go to the brand that offers personalized offers, tailored to consumers’ needs, and 90% of customers find personalization appealing. The same goes for invoicing.
Personalization of invoices allows both freelancers and companies to leave a good first impression and nurture the bond with their customers and clients.
Sending well-designed invoices allows both brands and freelancers to brand themselves and increase their recognition by their clients. Personalization of invoices also allows freelancers and companies to showcase their skills.
Furthermore, the personalization of invoices allows brands and freelancers to showcase their tone of voice. Invoices shouldn’t be bland – they’re an important step in business communication. While they should be formal, they also need to show brand and personality.
Lastly, itemizing your invoices shows clients you’re organized and what they got for their money.
Trend #4: Automation will take over the invoicing process
Automation is yet another invoicing trend that will stay highly desirable in 2022 as well. Automation allows businesses and freelancers to save precious time and energy, and focus their efforts on what they do the best.
Automation allows both freelancers and businesses to track financial interactions in a better way and decreases the chance for errors to a minimum.
Since reminders for late payments can be sent automatically, end users can easily keep track of and stay on top of their payment schedules. Thanks to automation, clients will be able to make automatic payments on specified dates as well.
Trend #5: Invoicing will meet blockchain technology
It seems like blockchain technology took over the world. Invoicing niche included. Blockchain technology will allow companies to streamline their invoicing processes by keeping track of all their transactions while eliminating the need for third-party interactions.
By incorporating blockchain technology into invoicing, companies and individuals will be able to send and pay invoices using both flat and digital currencies such as Bitcoin. Since blockchain is generally considered to be safer and more private than fiat currencies, the risk of fraudulent activities will be decreased. Lastly, as blockchain becomes more scalable, this trend will possibly disrupt the traditional invoicing system.
Trend #6: Invoicing will be run in the Cloud
Today, many technologies are operating from the cloud. The invoicing is not an exception to the rule. SaaS technology, particularly solutions made to help companies and individuals streamline their invoicing and accounting processes will become more popular this year.
Invoicing tools are convenient since they allow companies and individuals to become more organized, have real-time updates, and take immediate actions regardless of their location.
Furthermore, SaaS invoicing tools allow users to address payment issues promptly and resolve any obstacles effortlessly.
Lastly, there will be more SaaS solutions made for mobile applications, and we can expect that access to invoicing via mobile to become a standard requirement for customers and clients.
Trend #7: Tracking VAT changes will be a must in 2022
The ongoing changes in VAT rates worldwide forced everyone in the business world to pay greater attention when issuing invoices. While VATs were stable in the EU over the past few years, the Coronavirus outbreak and the impact it had on the global economy forced a series of actions from governments around the EU.
VAT changes and reductions come as a result of different economic recovery packages and they are subject to rapid change. For instance, Norway decreased the VAT from 12% to 6% for several industries including hospitality and tourism, and it has extended this rate cut several times.
Since VAT changes are happening constantly, and different VATs are applying to different industries in different EU member nations, VAT monitoring and management are a critical part of Business Spend Management (BSM).
Trend #8: QR codes will be revived
QR codes will experience a renaissance in 2022, making it one of the most prominent invoicing trends this year. QR codes were introduced in the late 2000s, and they were aggressively marketed as the rising trend in payment. However, they failed massively because companies found more effective ways to connect with customers. With the beginning of the Covid-19 pandemic, however, QR codes experienced a huge comeback as they helped many businesses including restaurants to reduce the risks of virus transmissions but they were also more used on physical invoices to improve data capture and processing.
Some countries are even going towards implementing mandatory QR codes such as India, Portugal, and Sweden. Sadly, this implementation poses a challenge for many businesses still using old legacy invoicing tools that aren’t designed to create and capture QR data.
Digitalization will take over every aspect of our life, both professional and personal. Invoicing isn’t (and shouldn’t be) different. While some businesses are still sticking to paper invoices, in the following year we are bound to see tendencies toward digitalization including increased use of QR codes, switching to e-invoicing, greater personalization, and operating on the cloud.