Guide to Choose the Best Invoice Software
Invoicing is an integral part of business regardless of whether you are a small business owner, a freelancer, or someone working accounts. If you spend a lot of time on billing, you will know how important it is to produce a professional invoice. One way to achieve this is to use the best invoice software. To ensure the invoicing part of your business goes smoothly, this article will discuss how to choose the best invoice software for your business.
What is Invoicing?
An invoice is a document that specifies what a buyer must pay the provider of services of goods based on the terms of the provider. Payment conditions show the maximum amount of time that a consumer must pay for the services or products they have bought from the provider.
Also, an invoice shows that a buyer owes money to a provider. That is why, from the viewpoint of a provider, an invoice for the sale of service or goods is called a sales invoice. From the viewpoint of a buyer, an invoice for the cost of service or goods is called a purchase invoice.
Types of Invoices
An invoice is not as simple as it seems. There are actually different types of invoices. Let’s get familiar with them:
The most common type of for small businesses is the standard invoice. A business creates it and submits it to a customer. The format of a standard invoice is quite flexible to fit various industries. The elements of a standard invoice are:
The name of a business and its contact info
The name of a client and its contact info
The number of invoices
The amount that the clients must pay the company for its good or services
Another commonly used type of invoice is the debit invoice. A debit invoice is also known as a debit memo. A company that raises the amount that a customer owes them, issues a debit invoice. Such invoices are helpful for freelancers and small businesses when they require minor adjustments later on. For instance, let’s say you have sent a customer an invoice mentioning the number of hours you will work. If you end up working more hours for their project, you can send a debit invoice to the client for the extra hours billed. Note that the amount on the debit invoice is positive in all cases.
A credit invoice that is also called a credit memo is issued by a business that should supply a customer with a refund or a discount. It may also be issued to correct an earlier error in the invoice. Different from the debit invoice, a credit invoice will always have a negative number. For instance, let’s say you are issuing a credit invoice to mention a $60 refund. In this case, the total on the invoice would appear as -$60.
Mixed invoices are a combination of debit and credit charges on an invoice. Here, the total number can be positive or negative. Small businesses do not usually need to generate a mixed invoice for their goods or services. Nonetheless, if you decrease the amount a customer should pay for one project and increase the amount they owe for another project, the mixed invoice can be useful in such situations.
A business creates a commercial invoice for goods that it sells to its clients internationally. Details of the sales that are necessary to identify the customs responsibilities for transborder sales are included in a commercial invoice. You can see the following information on a commercial invoice:
On large projects, an interim invoice is utilized for billing. Here, the business and the customer agree that there will be multiple payments. A freelancer or business will submit an interim invoice when they reach a particular milestone. Also, interim invoices assist small businesses in handling their cash flow when working on projects for a long time.
Pro Forma Invoice
Another commonly used type of invoice is the pro forma invoice. It is an invoice that is issued by a business before they provide services for a client. The information on a pro forma invoice includes the approximate cost of the services that will be done. When a project finishes, the pro forma invoices might be modified to precisely show the number of hours that a business has worked.
A business sends a final invoice to a customer when a project is completed. As you may understand, a final invoice is more detailed than other types of invoices. It typically includes the following information:
Common Mistakes in Invoicing
To get paid, you need to send an invoice for services rendered or products sold. This is such a vital step in your business. But sometimes you tend to rush this process. When there is haste, usually, mistakes creep up in invoicing. Check the mistakes below that you should avoid:
Not Sending An Invoice Promptly
That is the first common mistake that the majority of businesses make. You know that you should not wait for your clients to ask for the invoice. It is your responsibility. Also, note that the faster you send an invoice, the faster you will get paid. So the speed of the essence.
Failing to Mention Payment Due Date
Many businesses include uncertain terms on the invoices they send to clients. For instance, they specify the due payment date as “as soon as possible.” That would easily confuse clients. So, it is critical to specify the scheduled payment date on an invoice accurately. For instance, write it on the 7th of November.
Sending an Invoice to the Wrong Person
It is another common mistake that most businesses make. They prepare the invoice, send it to the point of contact of the client company. Then they wait for days to get the payment, yet there is still no result. Only when businesses contact the person they have sent the invoice to, they understand that it is a wrong person. So, everything will have to be done again. Make sure you double-check the name of the person you send the invoice to.
Not Showing Courtesy on an Invoice
Showing courtesy will make you better off everywhere. It is no different when it comes to invoices. Most businesses do not use words such as “Thanks for collaboration.” But it is certain that when you use such words, your clients will think of you as more thoughtful.
Not Following up
You may think once you send the invoice, it is done. Unfortunately, it is not that simple. Do not forget that many businesses send an invoice to a client and do not receive payment. Days, sometimes weeks pass, with no response. It is because they do not follow up. Basically, some customers are really busy remembering your invoice. Others are just, well, they want you to badger them. And yes, such clients do exist. Therefore, unless you follow up every few days, you will not get paid by some clients. Keep it in mind.
Not Making it Easy to Pay
You are interested in receiving the payment for the service you provided as soon as possible. But ask yourself for a second. Is it easy for your customers to make a payment? In other words, it does not matter how clearly you have made the payment methods. You need to ensure that your clients will be able to make payments with a click or two.
Not Proofreading Invoices
Many businesses leave mistakes on the invoice they send to clients. You probably have done the same, too. But do you know that it looks unprofessional? It may change the view of your customers about you. All you have to do here is to proofread your invoice once. That will be enough to send the invoice only once and seem more professional for your clients.
What is an Invoice Software?
Invoice software is a system that automatically creates billing for the provided services and products. A list is created in this software containing the products and services of your company. The respective prices of these services and products appear there, too. Then, the system sends it to your clients. An invoice software creates invoices on ready templates. These templates look professional, which makes the whole invoicing process more beneficial and easier for the business.
Why Should You Have an Invoice Software?
Until now, you may have more or less understood why you should have an invoice software. Let’s go deeper to ensure you know why you should use the best invoice software.
Generate Invoices More Precisely and Faster
As a business owner, you should already be aware of what should be provided on an invoice. You need to put an invoice number, details of the service or goods supplied, and date when the invoice was sent. Additionally, you will have to provide the name and contact information of the provider, name, and contact details of the client, costs, total amount, and payment details. You can do them all manually every time. Or the best invoice software can do that for you. Just ask yourself which is better.
Create Invoices Anywhere
Besides the above point, you can generate invoices anywhere, regardless of your location. All you need is an internet connection. At the same time, some of the best invoice software providers offer mobile applications, too. It means you can even create invoices through phones, also.
Integrate the Software with Primary Systems of Your Business
You perhaps did not know about the integration of invoice software to your vital systems. Bear in mind that the best billing software can be integrated into your full accounting system. Also, you can incorporate it into your inventory, payroll, and other modules utilizing just one source. It is even possible to incorporate some of the best invoice software to e-commerce platforms.
Must-have Features in an Invoice Software
Invoice software has multiple features. But some must-have features are mutual sides of the top invoice software. We will talk about them, too, so that you do not end up making a wrong decision.
Generating a New Invoice
This feature applies to all billing software. It allows you to create professional invoices that can be customized to fit your brand. Note that a decent software should be able to integrate information from projects, timesheets, etc.
Generate Client Records
A quality invoice software should allow you to access purchasing and personal information regarding customers. There should also be a centralized database with search filters. Through that, you should be able to access the customer database easily.
The accuracy of the data on your invoices is of paramount importance. The way they look on an invoice is critical, too. Predefined templates are, therefore, a significant feature of the best invoice software. They enable you to personalize your accounting besides saving time.
Credit Card Processing
Credit card processing is another beneficial feature of the top billing software. Do not forget that an invoice software should save you time by promptly implementing the payment process. It should also ensure customer management. Also, some software has the feature of auto-billing of credit cards. Here, you receive payment as soon as the payment due date arrives.
Send and Receive Information
Through this characteristic, you will be able to send quotes to your clients. It will happen thanks to the immense customer database, where detailed information of clients is available.
Availability of Multiple Currencies
This function allows you to integrate your invoicing and billing system with the remaining software systems of your business. This feature may be beneficial for accepting payment, handling taxes, creating receipts, and more. This characteristic is particularly critical for companies with international operations.
Invoice, Payment, and Tax Report
The best invoice software will not allow you to use an external service for your tax reporting. It will enable you to implement it within the same software. By this, you will not have to lose a lot of hours to summarize information.
How to Choose Your Invoice Software?
It does not matter if you are a freelancer or a small business owner. You want to get paid as soon as possible once you render a service or a product. For this reason, invoice software is significantly essential. Knowing how to choose your invoice software will aid you a lot in receiving timely payments.
Prioritize Your Needs
Before searching for the best invoice software, ask yourself, what are your specific needs. Maybe you need the best invoice software for small businesses. Why would you spend more on a tool with advanced features that you will never need? Keep in mind that when it comes to billing software, you want it to be as simple as possible. Try to get something that is quite simple but will satisfy all your invoicing needs.
Look Matters a Lot
You may think as long as the data on your invoices are correct, you will do well. But take into account that look matters more than you think. When your invoice has a pleasant look, it will showcase an image of professionalism to your clients. It will also show that you care for your clients and that you’ve taken the time. So, even when you get the top invoice software, take the time to ensure the invoices look good.
Make Sure You Choose Something Highly Secure
You’re already familiar with the crucial features that the best invoice software should have. Bear in mind that before everything comes security. If your invoicing software does not provide adequate security, all other advanced features will be meaningless. To ensure you are protected adequately, you should choose a provider who is well known in this area.
Get Software with Decent Customer Support
You should never underestimate the importance of good customer support. It will especially come to your help when you have questions or are just plain stuck. So, remember to get a provider who gives timely customer support.
Benefits of Invoice Software
An invoice software will support you with all invoice-related tasks. Additionally, the top invoice software should be able to deliver you other benefits.
Diminish Late Payments
The right software can make your invoicing and billing process more efficient. Thanks to this, you would be able to collect your payments on time. Note that this software will make your data and scheduling more organized. So, you will be able to increase your profitability by receiving payments on-time.
Diminish Missed Payments
The best invoice software will also help you minimize missed payments. It will be done through constant monitoring of the invoice processes. So, you will not miss collecting any of the fees.
Give a Professional Image
Quality invoice software will help you enhance your company’s reputation. Note that the best invoice software will support you with customized logos. It will help you present an organized approach to your customers.
Automate Accounting and Financial Tasks
When you start using top invoice software, you can reduce staff in the department of billing and invoicing. That will surely help you cut down expenses. It will also help you save time as you will not have to go after defaulters. A well-endowed software will take care of them all.
Diminish Fraud and Enhance Security
Some of the best invoice software offers enhanced security at the level of banks. That will protect you from all types of hacking. Needless to say, it is much safer than preparing invoices manually and sending them through the mail.
Average Cost of an Invoice Software
You can get invoice software in two types. They are the standalone and as a part of accounting software. Some people think that standalone invoice software is not useful. This is why accounting software is preferred when as opposed to a standalone invoice software.
In general, the prices of invoice software differ significantly. You can get a free tool that satisfies all your needs. Of course, it will be the best invoice software for small businesses. Also, you can get software that costs tens of thousands of dollars every month. The factors affecting the price of software are mainly the number of users and customers. In most cases, companies offer a starter/basic solution, or enterprise/pro software. In short, your costs should ideally not go above $1000 annually.
The importance of invoices to businesses is undeniable. Irrespective of the business type, you should ensure to make the invoicing process as smooth and easy as possible. That is why we recommend using the best invoice software for all your billing tasks. As you can see, there are many benefits of a well endowed invoicing software. Additionally, you would know what features to look out for in the software and how to choose the right one for yourself. Do not forget that you can select the best invoice software for yourself from Gygzy’s list of providers. If you liked the article, check out our page for more useful articles.