There are SO many options out there when it comes to finding a good invoicing software for your small business. How do you pick one? What even makes a good invoicing software vs. a bad one? Read on to learn about what to look for and consider when you’re searching for a new invoice program for your small business.
So, What Can an Invoice Program Do?
Before you decide what you’d like your invoice software for small business to do, it would be helpful to know what it could do.
Features that good invoice programs can offer are:
- Invoicing (of course)
- Invoice templates
- Recurring billing/invoicing
- Automatic payment reminders for clients
- Ability to accept and process online payments using online payment software
- Direct deposit to your bank account
- Auto-pay option for clients
- Invoice and payment tracking (for paid and outstanding invoices)
- Sync with QuickBooks or similar bookkeeping software
- Mobile and desktop invoicing options
- Security for you and your clients
Not every invoice program offers the full complement of features listed above, but the best ones do.
As you start your shopping consider the following: Which of the above-named features would help your business run smoother and with less effort on your part? In your business model, which of those features do you think would help you build your business and get paid on time? Use your answers to prioritize which features are most important to your business and which you could do without.
Want to jump right to recommendations? Check out our guide to the Best Time Tracking and Billing Software.
Consider Your Business Model
How do you typically bill your clients? Do you charge an hourly rate and send invoices periodically? Do you charge set project rates with a couple of payments for the deposit and completion or do you ask for a monthly payment for large projects? Do you charge each client a flat monthly rate? Ensure the program you choose can flex to accommodate the way you do business.
Not sure about your business model? Revisit the basics in How to Create an Invoice to see what your billing typically looks like.
How Many Clients Can You Invoice?
Lots of invoice software place a cap on the number of clients you can invoice. This could be a problem, especially if you make lots of small transactions rather than tackling a few large projects each month. A client limit could also hinder you and create extra busywork – something no business owner needs!
Some invoice programs offer tiered plans that allow you to pay more to invoice more clients, and others offer unlimited client invoicing (or at least plans with unlimited clients). It’s great to have options but note that some unlimited plans get pretty pricey.
That brings us to the next question you need to ask yourself while shopping for invoice programs.
Does It Fit the Budget?
When you run a small or independent business, profit margins are often tight. Keeping operating costs low allows you to invest in your business so it can grow and take home more of what you earn. Especially when you’re an operation of one, software expenditures essentially come out of your pocket.
How much does it make sense to spend on invoicing software for small business? It depends. Subscription prices for popular solutions vary from $9 per month to $150 or more. Some invoice programs even offer free options, but you get what you pay for. Most programs that offer free or very cheap invoicing don’t usually include much more than basic invoicing. We recommend investing in an all-in-one business software, which will help you combine the right tools for the right price.
While you’re thinking about your budget, it’s important that you also consider transaction fees. These fees are often a percentage of the transaction, sometimes with an additional flat-rate transaction fee. Most programs charge credit card transaction fees between 2.5% and 3%, and often around 1% for ACH transactions.
To learn more about payment processing, check out How to Accept Payments Online.
Do You Need to Your Invoice Software to Work On-the-Go?
The ability to access your invoice software while on the go is helpful for some business owners, and absolutely critical for most. A lot of the time, you’re the only person responsible for the little things that keep your business moving forward and money coming in.
If you travel frequently for your work (or for fun) and/or go to clients to give estimates and work on-site, make sure that the invoice software you choose can be accessed on your mobile device.
Some great mobile apps for invoicing are:
- Invoice Simple – simple invoicing
- Quickbooks – invoicing and accounting
- HoneyBook – all-in-one invoicing and business management
All of the above are available for iOS and Android.
Great Invoicing Software Does More Than Invoicing
It’s also important to consider features offered that are not directly related to invoicing — those that go above and beyond what an average invoice program offers. Some programs, like HoneyBook, offer an all-in-one business platform that allows freelancers, contract workers, and other independent business people to run many of their business processes from one program. Combining these tasks and shifting from multiple platforms to run your business can save time and mental space, allowing you to focus more on your clients and your passion.
To decide what a good all-in-one invoice software program might look like for you, start by making a list of each of the business tasks you carry out on a day to day basis. This might includes things like:
- Writing proposals and quotes
- Managing client relationships and communication
- Creating and sending online contracts
- Tracking payments and sending payment reminders
- Managing team members or subcontractors
- Project management
- Tasks and to-do lists
- Scheduling meetings or sessions and managing a calendar
- Tracking expenses
You’ll notice none of those tasks have anything to do with the actual business, just the backend. According to Caitlyn Pearce, executive director of the Freelancer’s Union, freelancers are spending literally half their time running their businesses.
Try HoneyBook for All-in-One Invoicing and Client Management
Most invoicing softwares makes sending an invoice easier, but not all deliver additional automation and features to really streamline your business. HoneyBook focuses on giving you an easy way to invoice your clients from your computer or laptop using online invoices and manage the other parts of your business like contracts, communication, and bookkeeping — all in one organized place.
Ready to get paid faster and run your business from one place? Try HoneyBook risk-free for 7 days (no credit card required).
Still looking for tools for your business? Check out our review of the Best Software for Small Business in 2020.