cXML stands for Commerce eXtensible Markup Language and it is a standard format of electronic data exchange. Implementing this markup language aims to enhance seamless electronic communication between trading partners.
Computers are able to read and interpret the data in the documents and invoices and allows it to move forward with processing. This is due to the consistency and specific structure of the data in cXML. The cXML data format is considered to be more advanced and flexible than EDI or other modes of electronic data exchange.
Following is a discussion on how the cXML invoice works:
| Advantages | Disadvantages |
| cXML mode of electronic transmission is highly flexible and uses standard data format, which leads to documentation consistency. | The business has to incur massive costs when implementing cXML. Further, software, integration, and staff training costs may outweigh the benefits. It is not suitable for small businesses. |
| This technology supports real-time data monitoring. Hence, it helps with better data visibility and decision-making. | cXML is focused on standardization of the data set and structure. It is not easy to customize tailored invoicing solutions. Furthermore, it is not suitable for businesses with special invoicing requirements. |
| There is no need to use paper when using electronic invoices such as cXML. Hence, it is environmentally friendly. | There is a heavier dependence on third-party service providers when using cXML. This means that any downtime in the service might lead to operational problems for the business. |
| This technology is easy to understand as humans and machines can easily read data codes and structures. Furthermore, there is no human intervention in the process of sending invoices. This means that there is a higher pace of accuracy and reliability. | |
| Overall, the execution of the billing function is quick when using cXML. This leads to enhanced efficiency of the collection department. |