Getting paid for your services promptly is vital to business success. And for many online businesses, this involves composing an email, sending a bill, making sure you have the correct account information, and keeping track of responses. It’s time-consuming, but how to set up an invoicing system is the question.
Rather than sending individual emails asking customers and clients to pay, an automatic invoicing system can handle most of the work for you. Having one will streamline the process and make getting paid much quicker.
If you’re not sure an automatic invoicing system will work for your business, you’ve come to the right place. In this article, you’ll learn the reasons and advantages for doing so. We’ll also answer your frequently asked questions about setting up a well-organized system.
Why You Should Create an Invoicing System for Your Online Business
There are many reasons why an invoicing system will immensely help your online business. Invoicing software is much quicker than writing individual emails to clients asking them to pay, saving you valuable time. The software can also make accounting much easier, as all the data is in one place, which can cut down on costly errors.
How Invoicing Software Can Make Your Online Business More Efficient
Instead of writing emails, the invoicing software can do it for you. Some of them allow you to use templates and presets that you can modify for your specific needs. There’s no need to create something from scratch unless you wish to.
You can even send out multiple invoices at once. The days of sending them out one by one and manually addressed to different clients are gone. Instead, all you need to do is create a client database, and the software will make sure they’re sent to the right clients.
Having all the data in one place allows you to access it with a few clicks. There’s no need to keep any records on physical paper. Just open your statistics and files, and you can find anything you need to create a proper invoice.
In addition to customer data, the software can also track payment cycles, records, and more. It makes reporting very convenient.
In contrast to sending out snail mail and faxes, digitized invoices are cheaper as well. You don’t need to go to the post office or buy a fax machine. You save time and money that you can use on essential jobs and equipment. For instance, you can use the money you originally dedicated to snail mail to get better software for other business operations.
Choosing the Right Invoicing Tool
There are plenty of invoicing tools out there, each with its unique advantages and characteristics. How do you go about picking the right one then? Let’s look at some of the features you might be interested in.
Easy Payment Options
Your tool should have easy payment methods for your clients and customers. From PayPal to accepting debit or credit cards, your payment platform should have these options. Online businesses tend to avoid physical payments such as cash and checks and opt for cashless payment systems instead.
Your customers can pay you sooner by implementing PayPal, Venmo, and credit/debit card transaction support. If you don’t mind paying a tiny fraction to get money instantly, then you’ll have your payment in the bank immediately. This is easy, convenient, and saves you time.
Other invoicing systems allow bank and wire transfers. If you prefer to use wire transfers, you should get software that supports it.
Budget and Payment Plans
Using the software often requires you to pay, especially when you’re looking at premium versions. However, the paid versions differ in how you pay to use them. For example, some invoicing software companies charge you a flat fee per month. Others allow you to pay according to how many invoices you send out each month. Still, others rely on the number of clients you have to determine your fees.
Depending on your needs and budget, you should choose the software that fits you the best. You should also note that some versions are free or come with free trials, which are a great way to try before you buy. Of course, you can stick with free software, but those are often limited.
If you own a small business, you can always go for the cheapest plan, which might work well for your current needs. Then, when your online business starts growing, you can upgrade your plan.
Fast, Flexible Invoicing
With templates, you can create the right invoice and look professional at the same time. In addition, a well-made invoice will give your customers and clients a good impression of your business. This, in turn, will encourage them to pay you faster.
The payment terms should be visible and clear. You can’t write in confusing language, as it will frustrate the customer. With concise payment terms, you can accelerate the process immensely.
Should your client have financial issues, you can be flexible and offer a payment plan. Your software should be able to configure a personalized payment plan quickly. This isn’t ideal, but you should be adaptive when the situation requires it.
With fast, professional, and flexible invoicing, you can save time and give others a good impression. As a result, your clients are more likely to return for more, and you’ll experience growth. The time can then be spent in other ways that help your business grow, too.
Cross-Platform Connectivity
Some invoicing tools come with mobile apps to accompany the web-based version or program. As long as you have a high-speed internet connection, you can send out invoices anywhere around the world. You can be at the pool or jogging and still send them to your customers.
When you’re done outdoors, you can seamlessly transition to your computer and continue handling invoices. Don’t let your location and circumstance limit your workflow.
Strong Encryption
Your customer data and everything else should be encrypted with solid protocols. This will ensure your and others’ privacy. In addition, you should look for an invoicing tool that has strong encryption. Without it, hackers can steal your information or that of your customers. And then there’s no telling what they might do with it, as there are many possibilities ranging from identity theft to committing crimes in your name.
Expense Billing
In some industries, expenses are incurred when working for a client. You can charge a client for expenses, and your invoice can be modified to reflect this. You should look for software that allows you to bill expenses incurred while working for clients.
Integration With Other Tools for Running Your Business
As there are many invoicing systems, they differ in their number and types of features. Some can handle accounting, cash flow management, and more. Others are strictly for invoicing and billing.
If you prefer having as many accounting features as possible, then pick the tool that boasts many of the ones that can benefit your business. These have the benefit of letting you handle almost everything in one place.
However, if you choose the latter option (strictly invoicing and billing), make sure it integrates with other accounting software or tools. If your online business uses multiple tools for various tasks, it helps if they can integrate with your newest invoice software. Integrations allow you to stay in one place as well.
It might take some time to learn how to integrate your software, but once done, it’s worth your time. You might not have to leave one program for another anymore.
FAQs
What's the Proper Invoice Format?
While there isn’t a single invoice format that solves everything, it should contain the following:
- Your name
- Your business name
- Contact information
- Services provided to the client
- Costs incurred
- Client name
- Client information
- Invoice number
- Total
- Payment due date
- Accepted payment methods
There’s also room for policies in case you need them. For example, you can add late fee policies to charge clients an additional fee if they don’t pay on time.
With this information on your invoice, it’ll be clear to the client what you require, what they need to do, and when and how they should pay you. Ensure you enter only the correct information, as the wrong information can be misleading and slow down the payment process.
How to Make a Professional Invoice
A professional invoice can be created using an invoicing tool. These tools have templates and preset that allows you to craft invoices in no time at all. If it doesn't automatically include the features and sections you need, you can still make one from scratch with the same software.
If you’re not sure what an invoice should have, look at the list above and compare it to a few templates. You should have a good idea of what should go on the invoice.
Invoice Details – How Much Do You Need to Put In?
An invoice should have as much detail put in as possible. However, this doesn’t mean you must write long descriptions. Keep everything short but precise, so you give the exact information but don’t overwhelm the customer with jargon. Avoid adding unnecessary words just to appear ‘professional.’
How Can Invoicing Software Help?
They help make the process even faster and automated. You can set it up and let the software do most of the work.
Recommendations
Freshbooks
Freshbooks is a popular invoicing tool, particularly with freelancers and small businesses. Few programs can compete with Freshbooks when it comes to helping users save time with invoicing. In addition, it comes with many features and functions.
What We Like About Freshbooks
- Detailed reports
- Easy to use
- Team collaboration tools
- Mobile app
Cons
- Mobile app is less useful
- Lower degree of customization
- Little setup help
QuickBooks Payments
QuickBooks Payments is great for accounting, e-commerce, and much more. It’s better for mid-size and larger businesses due to its powerful functions, but it fits right in with offices of all sizes.
What We Like About QuickBooks Payments
- Predictable pricing
- No monthly minimums
- Good for professionals
Cons
- Limited invoice customization
- Slow deposit times
Zoho Projects
A powerful tool for sole proprietors to mid-size companies, Zoho Projects is easy to learn how to use. It also has a free plan for a single user and five customers.
What We Like About Zoho Invoice
- Deep customizability
- Good reports
- Excellent mobile app
Cons
- Doesn’t integrate with other Zoho apps
- Some functions need developer skills
Make Invoicing Simple and Quick
How to set up an invoicing system takes some knowledge and time since there are many choices out there. But once you know how, you can save a lot of time and money. These systems also help your online business grow.
Which system is your favorite? Do you make your own invoices? Let us know in the comments section.
