How your small business goes about being paid promptly and collecting on funds owed can make or break your business. In 2020, the most cost effective way to collect money owed by your customers and clients is through a small business invoicing software.
Many small business financial tools may include an invoicing module, but is an integrated approach for you? Or would you prefer to continue using the accounting method you’re comfortable with? A dedicated invoicing software can help automate your invoicing and billing process.
Here are our favorite picks for invoicing options for small businesses and freelancers in 2020.
Not a small business? Check out our billing and invoicing software guide for additional options.
FreshBooks has a billing and invoicing tool that helps your small business create professional invoices in seconds. Customers have a number of ways to pay, such as ACH transactions, credit card, or Apple Pay.
Automated reminders and saved payment information are just a few of the ways the invoicing capability helps save you and the customer time. Flexible invoicing terms will also let your small business request deposits on invoices to help cover any expenses necessary to complete the job.
The biggest benefit of FreshBooks is what you get included for the price. Starting at only $7.50/month, their “Lite” package is a full suite of unlimited invoices, expense entries, estimating, and time tracking.
QuickBooks Payments is the smart online invoicing add-on for QuickBooks Online that includes a built-in payment processing tool. Capabilities include ACH bank transfers, the ability for customers to pay with credit cards right in the online invoice, and support for multiple currencies. While QuickBooks Payments does require a subcription to QuickBooks Online to be used, it has routinely been one of the most inexpensive small business accouning software options available.
QuickBooks Payments helps small businesses send professional looking custom invoices. You can choose from many templates and add your own company logo and colors. You can also customize line items to include details such as discounts and service rates. Billable hours can be added via your time tracking program.
QuickBooks Payments has no monthly or setup fees. Your small business will only pay a small rate per transaction:
invoicely is a forever free invoicing tool for small businesses looking to automate their existing invoicing processes. With unlimited invoices and absolutely no cost to your business, invoicely is a top choice to stay on top of your billing, all while looking professional and getting paid faster.
Taxes, discounts, and shipping can be generated as single line items, letting your invoice totals shows a detailed breakdown of waht is owed. All the calculating is done within the program. Attach your logo on to the statement, and your business will have a professional looking way of collecting what is owed to them.
The free plan will only include invoicing, so if your business desires any estimating, time tracking, or recurring statement capabilities, you’ll want to explore some of their premium plans. Invoicely lets your business easily upgrade, downgrade, or cancel at any time. From month to month, your business can adjust to the needed subscription level to suit your needs.
Xero is a small business accouning software with a strong invoicing module. The solution lets you set up repeating invoices, bulk send invoices, oncharge billable expenses, replicate previous invoices, and more. Xero also has mobile capability to let your workers outside of the office handle invoicing via their phones.
Xero is a complete accounting tool, meaning invoicing is only one of the many features included in the base product. Accounting with Xero gives a real-time view of your cash flow that is accessible from anywhere via Mac, PC, tablet, or phone. Xero also integrates with over 800 business apps. This helps specialize the solution to your industry, depending on if you need point of sale, time tracking, ecommerce, or more.
Users interested in Xero can try the program free for 30 days. The “Early” version only provides 5 invoices/quotes a month; you’ll need to opt for the “Growing” version at $30/month for unlimited invoices, quotes, bills, and bank reconciliations.
Zoho Invoice is the true definition of a small business invoicing software–simple layout, just enough features, and most importantly, easy to use! The solution doesn’t try to be a complete accounting software or anything you don’t want it to be. It’s straightforward to create a simple invoice. It also provides ways for you to customize your invoice templates, automate recurring tasks and reminders, and collaborate with clients in real-time to negotiate better terms and conditions.
If desired, Zoho Invoice integrates with Paypal and Stripe for payment processing. It can also work alongside any other Zoho app, such as Zoho CRM or Zoho Projects. This can come in handy when you are growing as a business and want a more efficient way of recording client communications and handling project management.
Best of all, Zoho Invoice is completely free to use when you are first starting out. You won’t be charged for the program if you invoice less than 5 customers a month, making it a completely risk-free software for freelancers. Pricing is further dependent on the number of customers being invoiced and the amount of users required.
Freedom Merchants is known as a payments integration tool that provides invoicing capabilities. While many invoicing tools focus first on invoice creation and distribution, Freedom Merchants focuses on arguably the more important part of invoicing a customer–collecting the payment.
With no coding skills required, Freedom Merchants helps your business create checkout pages for your customers. These pages can include invoice details and allow for customers to setup recurring billing for products or services you offer. The solution integrates with QuickBooks Online as well as QuickBooks Desktop. This means any invoices created and collected upon can be imported back into QuickBooks, meaning your accounting records are always displaying as accurate of information as possible.
If you’re wondering why your business should consider a 3rd-party invoicing and payment processing tool when QuickBooks already offers one, we’ve got you covered. For starters, lets compare their processing fees:
Freedom Merchant has significantly less expensive processing fees. These savings will add up over time–and with enough volume–will justify the $25/month fixed fee. Freedom Merchant also integrates with a number of other small business accounting software, giving you more flexibility in the event you decide to ever leave QuickBooks.
Small business invoicing software is designed to facilitate the creation and delivery of billing documents to customers. Invoicing solutions for small businesses provide automation features that help auto-complete data fields and calculate line items. Some solutions will also automatically generate and apply sales tax. These automation features will reduce the time it takes to run your invoicing process, which reduces labor costs, helps prevent under-billing, and increase customer satisfaction.
Small business invoicing software is usually a more simplistic, easier to use, and inexpensive version of a more robust billing and invoicing software. These solutions are targeted towards freelancers or small businesses with a smaller number of clients who may not need all the bells and whistles they find with other solutions. These options can also be small business accounting software that has an invoicing module, or be a stand-alone invoicing tool that integrates in with their accounting system such as QuickBooks or Xero.
Some of the top benefits of invoicing software for your small business include:
To automate your invoicing process, you’ll want to find a solution that meshes well with other applications. For example, an invoicing tool that also offers (or integrates with) time tracking and project management will allow you to flow through your work day at a quicker pace.
While these features may commonly be included in small business invoicing systems, they may also be marketed as project time tracking software, or simply time and billing software. Time and billing software is used for real-time and after-the-fact employee time tracking in order to facilitate client billing.
Time and billing may be best suited for businesses that rely heavily on capturing billable hours. Internally, tracking billable hours vs non-billable hours can give an oversight as to how profitable your labor resources are, or perhaps better improve your workforce planning.
A real world example of small businesses finding success with integrated invoicing and time tracking is within the professional services. If you are a law firm, you likely bill clients at an hourly rate for services provided. Before beginning client work, you’ll want to “clock in” to their project, and “clock out” when you’re done. Once your work has been completed, your time can be calculated against your hourly rate, which creates a dollar figure on your invoice.
In today’s age, all types of software can be accessed via the cloud. Small business invoicing software that runs online provides a cost-effective, scalable, and flexible way of handling any billing needs.
One of the most popular reasons people are moving to online small business invoicing software is for the accessibility it offers. Online programs are accessible just by logging in via a web-browser. As such, they do not require any sort of native application to work. This means you can use the software while at home, at a coffee shop, or wherever you have access to the internet.
This level of accessibility means your invoices are stored in the cloud. Employees can upload and approve invoices even if they are traveling. Invoices are also never lost, as cloud-storage offered by your software provider means they control any and all data storage and backups.
Other benefits of cloud small business invoicing software include subscription-based pricing, online payment processing, and reducing paperwork within your business.
The cost of small business invoicing software is dependent on the number of users, the number of invoices being created each month, any additional functionalities needed beyond invoicing, and any integrations required with other systems.
Most options targeted towards small businesses will have a starting price of $9-$25/month. This is typically a base-rate for a limited amount of users. Payment processing–either via credit card or ACH–will add to your overall monthly costs.
While becoming more rare, some software companies do sell locally installed versions of their solutions. This means you’ll pay a bulk cost upfront to buy the software outright. This is great for a company that does not want to worry about monthly payments. Small business options will start anywhere between $500 to $1,000 for licensing.
If your business prefers to go the locally installed route, you’ll want to be prepared for added fees. This includes implementation and training costs, which can potentially double the initial investment.
You also will need to consider the need for ongoing support and annual updates. These are usually optional to purchase, but without them, you’ll be left high and dry without a working solution if something goes wrong. Many businesses choose a subscription-based pricing model for the peace of mind that they can always get reliable support and updates to their software when needed.