Invoicing explained
Invoices are a critical element in business. In simple words, it is a commercial document that helps maintain records of a transaction between a buyer and a seller.
An invoice tells your client how much they owe you, when the payment is due, and what services you provided.
If goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available methods of payment. Types of invoices may include a receipt, a bill of sale, a debit note, or a sales invoice. Invoicing is the best way for expense tracking.
Invoices have traditionally been recorded on paper, often with multiple copies generated so that the buyer and seller each have a record of the transaction for their records. Currently, computer-generated invoices have changed the scenario. They can be printed on paper on demand or sent by email. Electronic records also allow for easier searching and sorting of particular transactions or specific dates.
Invoices track the sale of a product for inventory control, accounting, and tax purposes. Many companies ship the product and expect payment on a later date, so the total amount due becomes an account payable for the buyer and an account receivable for the seller.
What is an invoicing software?
If done manually, invoicing can consume a lot of time as well as money. There is always the chance of error as humans are prone to mistakes, and small misinformation in your invoice can result in severe loss.
This is where the role of invoicing software comes into play. Invoicing software is a piece of program that can automate the invoicing operation at your business.
Why Do You Need an Invoicing Software?
Invoices are a critical element in business. In simple words, it is a commercial document that keeps records of a transaction between a buyer and a seller.
An invoice tells your client how much they owe you, when the payment is due, and what services you provided.
If goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available methods of payment. Types of invoices may include a receipt, a bill of sale, a debit note, or a sales invoice.
Invoices have traditionally been recorded on paper, often with multiple copies generated so that the buyer and seller each have a record of the transaction for their records. Currently, computer-generated invoices have changed the scenario. They can be printed on paper on demand or sent by email to the parties of a transaction. Electronic records also allow for easier searching and sorting of particular transactions or specific dates.
Invoices track the sale of a product for inventory control, accounting, and tax purposes. Many companies ship the product and expect payment on a later date, so the total amount due becomes an account payable for the buyer and an account receivable for the seller.
Read more about – How to write invoice payment terms
Benefits of using an invoicing software:
- It is easy to use
Filling out all the invoices through hands can be really tiring. As a small business owner, when you take the help of an online invoicing system, all that hard work which you get to do every month will be done automatically just by the click of a button. You only need to put up your customers name and other information, and automatically the details will be shown, every time you wish to invoice your customer.
- There is no risk of invoices getting lost
When you send invoices with the help of a regular platform; it carries higher chances of losing your invoice. If something like this occurs, you will be filled with the question, of why your clients or customers did not think of paying you yet, even when the other side, did not get to receive your invoice in the first place. Even if your invoice makes through, your client will either forget or will not be able to find your invoice, when they themselves will be filled with piles of paperwork.
Therefore, in the case of online invoicing application, it helps in eliminating both of these problems and creates a backup of your invoice copies, for future reference. This will reduce the chances of having your invoices to get lost amidst other documents.
- The capabilities are enhanced
When you have an online invoice application that has an inbuilt tracking system, it will allow you to stay notified whenever your client receives your invoice. Hence, the client will have no reason for not paying you up when the time comes. A digitalized record of your invoice will be saved, and you will never feel the doubt in your mind that, whether or not your client received your invoice.
- Helps in saving money
When you stop invoicing physically and sending them to your customers, it will help in reducing the wastage of paper, ink, and money. How? When you have an automated invoice generator, the amounts of cash you have spent on pens and papers will be reduced as you will only be required to send an invoice through your email, where there is no envelops, paper, pens, and other things are involved. This helps in saving not only your money but also the time.
Who should use an invoicing software?
- If youre a freelancer, small business owner or an enterprise owner and you want to keep up with the competitive business environment.
- If you want to attract and retain clients to grow your business and stay in the market for long.
- If you want to find out ways to save money and time. If increasing productivity and convenience holds utmost importance for you, online invoicing software will help you to streamline the entire invoicing process.
Scaling your entire business might sound a far-fetched dream initially, but there is a step you can start with. It is improving your invoicing process. An improved invoicing process will lead to an increase in the cash flow and business productivity.
Sadly, creating invoices on paper and excel sheets arent the most efficient way of improving invoicing process.
A cloud based billing software is a way to go for businesses.
We have carefully created a list of the top 9 free invoicing software:
Lets have a look.
- Due
Pros: Due is a completely free time tracking and invoicing tool. It also includes a calendar and reporting tools to keep users organized and on task. Users can upload their companys logo to use on their invoices and then embed the invoices into the users site; thus, allowing clients to make online payments. There is no setup fee and Due.com is available in more than 100 countries. It also supports the majority of their tax systems.
Cons: There are some limitations to billing flexibility on this platform – it is not possible to set up hourly billing, for example.
- Zoho
Pros: Zohos invoicing naturally integrates with their own suite of products, but it also integrates with many other applications, including Dropbox, Google Drive, PayPal, Stripe and OneDrive. Great for desktop and mobile, Zoho is an excellent place to start.
Cons: Zoho has a forever free plan but only for those who have fewer than 5 customers to invoice.
- Wave
Pros: Wave Accounting offers a completely free invoicing tool. This tool is ideal for managing both personal and small business finances. Wave offers free tools for invoicing, accounting and payroll as well as receipt scanning.
Cons: No dedicated project- or time-tracking features. Also, theres no comprehensive mobile app.
- SlickPie
Pros: With SlickPie you can easily create and send invoices to your clients. It’s time and money saving tool, it also reduces the paperwork.
It can create professional and highly customized invoices, track expenses of your business, recurring invoices to my regular clients, auto-payment reminders to late payers at zero cost. It integrates with great other software Dropbox, Stripe, PayPal and all Major credit cards.
Cons: It does not have a payroll integration. The User Interface is good but there arent enough charts.
- Invoicera
Pros: Invoiceras free forever plan allows three clients plus unlimited invoices. The upgrades Invoicera offers would work very well for small businesses, and each premium plan allows a 30-day trial period, so this software could be optimal for a growing business.
Cons: User interface is a bit complicated. Getting everything filled out can be confusing and navigation is a bit tricky. If youre not used to these kinds of apps, take it slow or you will mess your invoice up.
- Freshbooks
Pros: Freshbooks offers a delightful user experience that enable freelancers and SMBs to quickly invoice customers and get paid faster. Team collaboration tools, time tracking, and estimate functionality are great add ons.
Cons: Poor reporting functionality, limited features in the estimates tool. Late Fees feature could use more options.
- Invoicely
Pros: Invoicely is free, simple and secure invoicing for small businesses. Invoicely is a strong contender in the billing space and it has strong reporting and currency support functionality. There are wealth of features even at the lowest paid tier. It also supports multiple countries and currencies.
Cons: Theres no custom branding for free version. Invoice customization could be better. Time and mileage tracking are minimal.
- Sighted
Pros: Sighted offers easy invoicing, integrated global payments, expense recording, CSV Excel downloading of all of your data and more, all using top-of-the-line security. The starter plan is free forever, and offers 20 invoices and quotes a month for a single user and 10 clients.
Cons: Many users don’t like how the “issue” and “due” date appear in the invoice. The software doesn’t allow you to manually enter a date.
9. Profitbooks
ProfitBooks is a powerful billing system that helps you create professional and beautiful invoices and get paid faster while taking care of financial accounting in the background.
ProfitBooks adds power to the simple invoicing with time-saving features like:
- Unlimited invoices
- Managing Unlimited contacts
- Tracking your payables & receivables
- Collecting online payments
- Sending invoices in multiple currencies
- Tracking business expenses
- Managing taxes
- Inviting staff and accountants
- Exporting data to accounting softwares
- Getting in-depth financial reports
Moreover, with Profitbooks, you can customize your invoice as per your branding.
As we believe that your invoice should be as unique as your business!
- Design it the way you like
Upload your company logo, show/hide items or change columns names.
- Choose from pre-designed templates
We have carefully added various invoice templates according to the industry type.
- Add custom fields
You can capture additional details like vehicle number, sales person name, etc using custom fields.
- Manage Business Expenses
Record your day-to-day business expenses and manage payables with ProfitBooks.
- Save Time With Automatic Tax Calculations
Taxes are calculated automatically to give you peace of mind and keep your accountant happy.
- Take Better Decisions With Detailed Sales Reports
Sales reports give you actionable insights so that you can improve the performance of your team and make more profit.
Watch how Profitbooks invoicing software works:
What’s more, you can test drive our software for free.
Join thousands of businesses who trust ProfitBooks for managing their finances.
Get a FREE trial today.
