Invoicing 2.0


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This post is about invoicing in Finland and how small businesses can save money by utilizing something I call Invoicing 2.0. There are not many Web 2.0 companies in Finland, so the new service I’m going to talk about is a warm welcome on the market.

The standard for e-invoices in Finland is Finvoice. According to list prices of Nordea (2007), sending e-invoices costs 0,60 cent / e-invoice and 5€ per month for the service alone. If you send 100 invoices per month, that’s 780€ a year. Of course they provide volume discounts to get the price down to 420€ a year, but you have to ask for the service separately. These calculations don’t include the setup fee 25€ and moving to volume discounts for 50€.

On the receiver’s side you pay 0,60 cent to receive the e-invoice.

Both parties have to pay for the transaction, too. Sender has to pay 15-20 cent and receiver 12,6 cent for the payment.

Converting to e-invoicing is often justified by the time and money saved in handling paper invoices. Most small business however, still handle invoices in paper-form for bookkeeping purposes, thus the paper cost is effectively transferred to the receiver side from the sender. If we forget the time issue here, the sender saves directly in letters and stamps, but looses in using the e-invoice service.

There is another option, which is cooking your own e-invoicing service. Many organizations send invoices in PDF form through email. Unlike e-invoices provided by banks, you don’t need any agreements or existing capabilities to send and receive e-invoices. Almost everyone has an email address and a computer capable of opening a PDF document. The drawback is in the ability to follow-up how the payment is progressing, i.e. seeing if the customer has…

  • seen the invoice
  • agreed that the invoice is ok
  • agreed that the invoice is ok before due date, if not, sending a reminder
  • paid the invoice

A lot of this often requires manual labour. Many small businesses who don’t have the resources or interest to pay for an electronic sales ledger have to invest the time in creating their invoices in some home-grown Excel sheets and then generating them as PDF files, opening up the email program and sending the bills away. This of course is labour small entrepreneurs should not be doing at all.

Invoicing 2.0 is about making this process much more easier by…

  • automating all the steps required for generating an invoice, sending an invoice as PDF, tracking the progress of the customer and archiving the invoice
  • making an easy to use interface to manage and generate invoices and customers
  • making it accessible through the web in a responsive user interface (AJAX etc., of course)
  • saving money by avoiding the bank costs on e-invoices

My friend Kim Forsman from Idoneus Solutions stepped up to the plate to fix this. As a small business owner like me, he was tired how hard it’s to use traditional invoicing software, how time-consuming it’s to use e-invoice services provided by banks and how expensive the e-invoicing service is. He created a service called Invoiced to provide a solution to small businesses to handle their electronic invoicing much more fluidly.

I started to use the service and it already saves me time and money. Not just productivity improvement, but it’s also incredibly good looking and fun to use.

So how much does it cost? 0€ for 5 invoices per month.

It’s basically free for an occasional private entrepreneur. If you want to send more invoices per month, you can buy invoice credits. You get discounts depending of how much credits you buy at once. Current price for 100 credits is 50€. If 5 invoices are free each month, that’s 47,50€ each month for 100 invoices. It’s also much faster to send invoices with the service because of the faster interface and the ability to send the same invoice to multiple customers at once. You get more for the money too, by having a web-based invoicing system for anyone in your company to use and the ability to remind your customers on unconfirmed invoices automatically.

If the invoice is due and you have to move it to some external collection service (perintä), you can do it directly through Invoiced by letting Lindorff Oy handle the collection. The availability of their collection service is free for Invoiced users, you only have to pay for the collection incidents. This is a service that small businesses don’t always have as easily available.

I interviewed Kim and he told me that APIs are coming, which means you could easily implement electronic invoicing capabilities to any online service you might be running. Localizations to other countries might be coming and the birds are whispering that Finvoice support might be right behind the corner.

Invoiced is a promising service. If you live in Finland and run a small business, go check it out.

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