What is Invoicing Software?
Invoicing software programs are tools that allow business owners to send professional invoices to their clients, who can then pay those invoices directly online. Invoicing software also lets business owners manage contacts, record sales and expenses, and run reports to get an idea of their business’ success.
How Can Invoicing Software Benefit My Business?
If you’ve ever received an awkward invoice made in Excel, then I don’t need to tell you how professional invoicing software can benefit your business. Invoicing software helps business quickly send professional invoices online. The perks of invoicing software include:
- Quick online payment from customers
- Tracking sales and expenses
- Viewing past invoice history (so you can market to existing and future customers)
- A professional business image
The last benefit is priceless. A good invoice template presents a professional image and allows you to promote a trustworthy, legitimate, and put-together brand. And believe it or not, there are studies that link strong invoice design to faster-paying customers.
Invoicing Software vs. Accounting Software
Invoicing software is great for small businesses which 1) already have accounting software and are looking to increase their invoicing capabilities, or 2) are so small that they don’t need full accounting software yet and can get by with basic bookkeeping features.
While invoicing software has a lot of benefits, a good accounting program should do what invoicing software does and more. (Accounting software also offers bank reconciliation, a chart of accounts, and reports that are important for legitimate businesses who pay taxes to the IRS each year.)
This is not to say that you shouldn’t look for invoicing software. We just want you to know the difference between the two and to understand that invoicing software is not a long-term solution for your full future financial management needs.
Common Features to Look for In Invoicing Software
Most invoicing software companies offer similar core features, including:
- Recurring invoices
- Multiple invoice and estimate templates
- Template customizations
- Basic expense tracking
- Contact management
- Items management
- Basic time tracking
- Basic project management
- Sales reports
- Unlimited sales tax rates
- Multiple currencies
- Mobile apps
- Payment gateway integrations
Higher-level invoicing software companies will often offer the following features as well:
- Client portal
- Advanced invoice customizations
- Project-based and service-based invoices
- Snail mail invoicing options
- Thank you notes and receipts
- Send late fees and invoice reminders
- Full inventory tracking
- Developed time tracking
- Job costing
- Large amount of reports
- Mulitple languages
- Ample integrations
How Much Will It Cost?
A full featured invoicing software can cost anywhere from $0-$20/mo. If the program you’re looking at is in the $30/mo range, you would be better off buying full accounting software.
Many of the free invoicing solutions on the market today are fairly limited, so if you choose one of these, make sure you wouldn’t be getting more a better deal in terms of features by increasing your budget or choosing free accounting software instead.
Do I Need Integrations?
Absolutely. While accounting software offers a large array of features, there is one type of integration you won’t be able to live without–payment gateways. Payments gateways allow you to accept payments for invoices online, which is a must for a successful invoice-sending business.
As your company grows, you will also find yourself outgrowing the financial management capabilities of invoicing software. You’ll either need to upgrade to accounting software or integrate with accounting software that offers a complete chart of accounts, a bank reconciliation feature, and double entry bookkeeping.
It also never hurts to have integration options for things like contact management and email marketing.
Choosing Specific Invoicing Software
Now that you have a basic understanding of invoicing software (what to expect in terms of price, which features to look for, etc.), it’s time to actually pick one! At Merchant Maverick, we’ve spent countless hours researching and testing the best accounting software programs on the market. Read our comprehensive reviews for more information or take a look at this comparison table of the highest rated invoicing software companies on our site.
And before you commit to a software provider, be sure to take advantage of any free trials the company offers. Most invoicing companies offer a 14-day or 30-day free trial of their software, no credit card required.
Have fun shopping!