Charlotte Davis

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What Is an Invoicing Software

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Every business has certain needs where their billing and invoicing operations are concerned. For the most part, we’ve left behind the days when everything was done on paper.

Today, the paper trail has been replaced with a trail of digital breadcrumbs. Finding the best invoicing software for your business can help make the billing and invoicing process much simpler.

In this article, we’ll take a closer look at invoicing software and how it relates to other types of accounting software. Not only will you learn what invoicing software is, but also what to look for to find the perfect accounting software for your business. Let’s get into it.

What is Invoicing?

Before we take a look at invoicing software and how it helps with your accounting and financial processes, let’s define invoicing.

Simply put, an invoice is a document presented to a buyer so the seller can collect payment. It details all the costs and payments involved, such as delivery costs, material costs, and labor costs.

Human beings have been creating invoices for thousands of years, with some of the oldest known invoices consisting of stone or clay tablets.

What Can Invoicing Software Do for You?

Invoicing software has a lot to offer to both new and established businesses. The right invoice software can help your business:

  • Create Invoice Templates for individual clients
  • Create invoices more simply and efficiently
  • Simplify and even automate recurring invoices
  • Keep track of which accounts have been paid, and which are in arrears
  • Process online payments using the same invoicing tool

Of course, invoicing software has a lot more to offer, but we’ll take a closer look at all the features later on.

Types of Billing and Invoicing Software

All invoice software isn’t equal, and there’s quite a large difference between invoicing software in general and accounting software as a whole.

The three main types of invoicing software are:

  • Cloud-based – All the software, as well as your business and customer data, gets stored online. You can access this type of online invoicing software anywhere as long as you have your login details and access to the internet.
  • Invoice generators – This type of invoicing software has one job, and one job only, to create invoices and send them. Often, they may be free invoicing software and have very few additional features.
  • Business accounting software – Accounting software generally has a far broader scope than simple invoicing software. It may allow you to create invoices and invoice templates, receive online payments, create receipts, and even balance accounts. It’s worth noting that this type of software comes in two different types:
    • Modular – Modular software allows you to buy different parts of the software, depending on what you need. I.E., You may pay for the invoicing and billing modules without paying for the account ledgers and automated follow-up messages. This setup means you pay only for the parts you use.
    • Full package – Package software offers a bundle of all the different tools that the program has to offer. You pay a lump sum for all of the modules, even if you only use a part of the software.

Invoicing Software Cost

The price for invoicing software can vary significantly, depending on the type and versatility. At the most basic level, invoice software may be free, while more advanced invoicing software can cost anything from a few dollars a month to several hundred dollars a month.

If you choose to use modular billing and invoicing software to handle your invoicing process, you’ll probably pay between $8 and $10 per module. Again, more established online invoicing software platforms may charge more.

Paid Vs. Free Invoicing Software

Not all invoicing software is equal. We’ve all had to settle for a free invoicing solution, but you should know about the potential differences before you do.

After all, the right invoicing software can mean the difference between creating professional invoices or looking like an amateur. Let’s take a look.

paid vs free choice

Free Invoicing Software

You can access entirely free invoicing software, which even allows you to create unlimited invoices. However, very rarely will it have capabilities other than to create invoices.

This type of invoicing tool typically also requires you to do recurring invoices by hand rather than offering an automated system.

However, there are exceptions to this rule, and some free software may offer you an abundance of tools. It’s best to take each invoicing or billing software on its own merit.

When looking for the perfect invoicing solution, beware of so-called “free” software that only offers you a free trial period. Sometimes, you only find out that the software itself isn’t free when you register.

While trial periods may be handy when you’re testing out different paid software types, the software isn’t truly free in these cases. If your business isn’t ready for paid invoicing software, it’s best to read the fine print and focus on the truly free options.

Paid Invoicing Software

Paid invoice software generally offers more features to help get your billing and invoicing system on the right track. Examples include automatic payment reminders, automated recurring invoices, and payment tracking.

As mentioned earlier, the price for this type of invoice software can vary significantly. And, while the features on offer can make even a relatively high price tag worthwhile, there are other considerations.

Paying a high price tag, then only using two or three of the features in a software package can mean that you’re operating at a loss. Always take the time to find out what you’re going to use and if the invoicing software you’re looking at is worthwhile for your business.

Modular Invoicing Software

Business owners who want to move on from free software, but don’t require all the bells and whistles of premium software, might want to consider modular invoicing software.

As mentioned earlier, modular invoice software allows you to create professional invoices without paying for features you don’t need.

For instance, if you only want the most basic invoice software, you can pay only for the basic invoicing module.

However, you can pay specifically for those integrations if you want to accept online payments from payment methods like PayPal or Zapper. Perhaps you want to better track outstanding invoices, inventory management, or project management features, or you want expense tracking, then you just pay for those modules.

This may be the way to go if you want great online invoice software at a manageable price without paying for features you don’t need.

Invoicing Software Features

Invoicing software comes in many shapes and sizes, and different features often affect the price of your invoice software. When you’re choosing invoicing software, this may be one of the main considerations. Let’s take a closer look:

Next to the ability to generate invoices, creating and saving customer records is one of the essential features of online invoicing software. While not all free invoicing software offers this feature, most offline invoicing software and paid software does.

Naturally, the number one feature that all invoicing software has in common is the ability to create invoices. However, not all invoice software allows you to create unlimited invoices. Free software may limit the number of invoices you can create and send each month.

Most affordable invoicing software allows you to create and send not only invoices but receipts as well. This makes it easier to keep your business records up to date while simultaneously ensuring that your clients get the documents they need. Some types of invoicing and billing software also allow you to automate receipts.

One fantastic feature that many business owners love is the ability to customize invoices. Examples include adding a custom header and footer, incorporating the business logo, and choosing a font that your business uses.

Most of the best invoicing software options give you the option to integrate different payment methods. Incorporating options for paying with PayPal, Zapper, and other popular payment methods can simplify the payment process immensely.

Card payments are a popular means of paying for things these days, and the best types of invoicing software and/or billing software allow you to accept credit card payments online.

Not everyone knows how to generate invoices from scratch without a lot of input. Many kinds of invoicing and billing software offer a wealth of templated invoices and receipts. These templates simplify the invoicing and billing process immensely because you simply need to enter the correct information into the marked fields.

Except in the case of the most basic free software, invoicing and billing software generally allows you to choose the currency that your client prefers. While you may be based in the US, some clients may prefer to pay in Euros. This feature allows you to accommodate any kind of client easily.

Most paid online invoicing software and billing software platforms allow you to keep track of various analytics. From seeing which part of the payment process you struggle with most to how long clients take to make payment. If you’re using multiple currencies, you might even be able to track which currency contributes the most towards your cash flow. Knowledge is power, making this a valuable feature.

Benefits of Invoicing Software

Now that you know what invoicing software is capable of, let’s take a closer look at the benefits it may offer your business.

Invoicing software and, in some cases, online invoicing software, in particular, can help you to:

  1. Save money – Invoicing software allows you to eliminate a large percentage of postage and printing costs, especially if you send invoices digitally.
  2. Save time – Thanks to invoicing features like pre-saved product pricing, auto-billing, and the option to schedule recurring invoices, invoicing software saves time.
  3. Seems more professional – You can create high-quality, professional invoices in a short period. This means that invoicing software can help your business to look more professional.
  4. Keep better track of your cash flow – Not all, but many types of invoicing software integrate your receipts and invoicing system seamlessly. This enables you to keep better track of which invoices have been paid and track your cash flow accordingly.
  5. Make it easier for clients to pay for products and services – When you use invoicing software to send invoices, it enables you to accept payments online. This link to online payment platforms and customers’ credit card payments means you get paid faster, and clients can pay with ease.
  6. Make tax reporting easier – Because most quality invoicing software groups invoices for individual clients, and accounting features may include analytics, it becomes easier to find and attach relevant files for tax reporting.
  7. Build your brand – Thanks to the customization abilities of most types of invoicing software, it can make it easier for both large and small businesses to establish their brand. Incorporating your logo and other customizations ensures that your client knows your brand from top to bottom.
  8. Work from anywhere – Most online invoicing software has a cloud-based backup. This means that no matter where you are, you can access your software as long as you have the login.
  9. Make automatic backups of everything – Except for certain types of free software, most invoicing tools automatically make a backup of all your invoices, receipts, etc. This means that, unlike a physical invoicing system, you never run the risk of losing the proper invoice document for any transaction.
  10. Be more versatile – Most online invoicing software is easy to use, meaning that anyone can use it. Thanks to pre-saved templates, even people who struggle with financial documents can use them with ease. Furthermore, the ability to swap between languages and currencies means that you can easily work with a diverse array of clientele.

What is the Best Invoicing Software for You?

When you’re trying to choose the right invoicing and billing software for your business, there are many different aspects to consider.

After all, every business is unique, and business owners need to ask themselves some questions before choosing an invoicing software. Below, I’ll run through some useful things to consider before choosing an invoicing software.

Do you have a stable internet connection and power grid?

We love online invoice software and think it has many advantages. But, if you live in a less developed area or one that’s regularly affected by natural phenomena, then an online or cloud-based invoicing software might not be the right fit.

It’s better to choose and download offline invoicing software and be able to serve customers who come into your store than to have them wait till the power or internet connection is restored.

What do you want from your invoicing software?

Invoicing software has a very narrow scope, but it’s part of a larger set of invoicing and billing software that can perform a myriad of accounting processes. Small businesses often have far fewer needs in this regard, except in certain cases.

So, to ensure that you’re getting what you need, rather than falling for a sales pitch. Here are a few questions to help you decide:

  1. Do you need to send unlimited invoices, or do you only need a certain number each month?
  2. How many clients do you need to account for? Is your client list likely to expand exponentially in the coming months?
  3. Do you want the software to create recurring invoices automatically, or are you okay with doing them by hand if you get to pay less?
  4. Do you need to create secondary payment documents like statements and receipts using your invoicing software?
  5. Would you like to include project management and inventory tracking tools in your financial software?
  6. Are payment integrations like credit card processing vital to your business?
  7. How important are templates and customization? Are you okay with basic invoices, or do they need to highlight your business’ branding?

These are just a few of the questions that can help you discern what you want from your invoicing software. In most cases, small business owners know their business best and will be most likely to know what they need.

If an employee is in charge of the invoicing and financials, we’d suggest talking to them and discussing these questions. That way, you can determine exactly what your company needs to operate at peak performance.

How much can you afford to pay for invoicing software?

Budget is one of the greatest considering factors for small businesses and businesses in general. Before you start looking for invoicing software, you should nail down how much you’re willing to pay to send invoices and perform other financial tasks.

If you have a very small budget, you may want to consider using the best free invoicing software that you can find. If your budget is larger, it would be worth your while to find an affordable paid service.

It’s also worth considering that you may not want to spend your possible budget fully. Just because you can spend $1,000 a year on invoicing and billing software doesn’t mean you have to.

Once you’ve calculated your budget, your business needs, and whether you need offline invoicing software or something more cloud-based, you’re ready to start the search.

Examples of Invoicing Software

We realize that with all the different kinds of invoicing software on the market, knowing where to start can be complicated. So, we’ve made a list of examples featuring some of the most popular invoicing software apps on the market.

Zoho Invoice

1

Zoho Invoice Logo

Zoho Invoice

 Expert Review

Very Good 10

Zoho Invoice Website

The Zoho Invoice software is entirely free and allows you to manage a broad array of financial tools and documents. Zoho as a company offers far more than merely invoicing and might be considered modular software.

Some of the modules are free, while others are paid, and they run the gambit from helping you manage inventory and cash flow to tools for managing your payment cycle or helping you get paid faster.

Zoho Invoice, specifically, is a fairly comprehensive program considering you don’t need to pay for it. One fantastic feature of this company is that they have mobile apps for most of the different software modules, including the invoicing software.

This invoicing software allows you to create high-quality invoices in over 15 different languages. You can also toggle between 11 different currencies, so your clients get invoiced in their currency of choice.

The invoices are fairly customizable, and you can incorporate your logos and branding with ease. It also allows you to create and customize financial reports, templates, and quotes. This software also has a tab specifically for managing tax-related fields like tax rates.

It’s worth noting that the payment process is simplified by the ability to connect different payment platforms, as well as integrations for other software and apps.

You can also create an organizational profile for your business, as well as comprehensive customer data for your clients. Finally, in addition to all the basic invoicing tools and requirements, you can view reports of payments received, expenses, and more.

Zoho Invoice Logo

Zoho Invoice

Quickbooks

2

Quickbooks Logo

Quickbooks

 Expert Review

Very Good 10

QuickBooks Online Website

Timely is my top choice for best tracking-time apps for small businesses, and I have a whole list of reasons why I love this software

nlike the other examples listed here, Quickbooks online invoice software doesn’t have a free version. However, you can access a 30-day free trial before deciding whether to pay for the software.

It offers three different payment levels, and all of them build on the basic features. The most basic program allows you to send customized invoices and quotes, capture and organize receipts, track income, expenses, and VAT, and generate financial reports. It also allows you to connect to your bank so you can receive payments easily.

The paid versions of the software offer expanded features, like:

  • Budget management
  • Employee, project, profitability, and time tracking
  • Recurring transactions and billing
  • Multiple currency invoicing

This software is fantastic but not necessarily worth more than some of the free software types listed here. It’s worth noting that this platform has apps for both Android and iOS, so you can create invoices anywhere.

Quickbooks Logo

Quickbooks

Invoicely

3

Invoicely Logo

Invoicely

 Expert Review

Very Good 10

Invoicely Website

Invoicely is another fantastic software that offers both free and paid versions.

The free version allows you to accomplish many of the essential invoicing tasks, and the paid version expands on them.

Unlike some of the other free services, it allows you to create and save up to three clients and to have multiple businesses. Thanks to a handy integration, you can also receive payments via PayPal and bill in multiple currencies.

Invoicely is available on both desktop and mobile browsers but also has apps for Android and iOS. No matter where you are, you can create and send invoices, so your clients never have to wait.

It also offers a fair number of customization options in the free mode, including the ability to incorporate a logo and a background image.

If you upgrade to the paid versions of this software, you can create quotes, have team members, and receive payments using various other platforms. Finally, the paid version allows you to track time, mileage, and other expenses.

Invoicely Logo

Invoicely

Invoice Generator

4

Invoice Generator

Invoice Generator

 Expert Review

Very Good 10

Invoice Generator Website

Invoice generator by Invoiced is a 100% free online application that allows you to create an unlimited number of invoices. You only need to sign up; then, you can make as many invoices as you like.

Its features are somewhat limited, and the invoices are truly basic, but it’s an excellent starting point if you want hassle-free invoices.

It offers a simple invoice template to which you can add a logo, as well as all the necessary details you need for any invoice.

You can access your account, and create invoices, from any type of web browser, including mobile. It doesn’t have a mobile app but is fully optimized for mobile.

Invoice Generator by Invoiced doesn’t create invoice backups if you download your invoices, so ensure that you always upload all your invoices to a cloud backup of your own.

However, you can also use their new Invoiced network to send digital invoices and receive payments via bank transfer or credit card.

There are hundreds of other invoicing software options out there, and these are just a few examples of well-known and popular software. These aren’t comprehensive reviews, just a quick list of some useful features.

We’d recommend looking into different options carefully (using the list you created of features you could use) and seeing which of them offers you what you need at a price you’re willing to pay.

Invoice Generator

Invoice Generator

Final Thoughts

Invoices are an integral part of any business, and human beings have been creating them for thousands of years. From clay tablets to papyrus and later printed invoices, it’s only fitting that this pillar of business keeps evolving with the human race.

Whether you’re a small business owner, or the chairman of a veritable empire, invoicing and billing software can make your life easier.

From the wonders of automated billing and recurring invoices to the fantastic branding opportunities provided by customizable templates, this type of software has a lot to offer.

And there are very few limiting factors where this type of software is concerned. Perhaps you live in a place where the internet connection suffers regular interruptions. Not a problem; simply choose invoicing software that has an offline platform as well as an online one.

Maybe you have great internet, but your computer doesn’t always work well, and you’re worried about losing your records or not being able to access the software. That’s not a problem either, just opt for a cloud-based invoicing software, then you can access it from any computer or possibly even a mobile device.

Perhaps your concern is financial rather than technical? Not to worry, some great types of invoicing and billing software are 100% free!

This article has covered the basics of invoicing software, some of the main features that you can expect from this type of software, and looked at how to find the right software for your business. But accounting, invoicing, and billing software is a broad field. If you have any questions that we didn’t answer, please feel free to reach out to us or drop a comment below.

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