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5 essential features of an invoicing software
The best invoicing software helps all types of businesses create, send, and track invoices efficiently from one centralized portal. This type of computer program or website is used equally by freelancers, sole traders, small businesses, and enterprises — in fact, anyone who needs a reliable way to bill clients and get paid on time.
With that in mind, there’s no one-size-fits-all solution because everyone’s needs are different, which is why we’ve already put together a list of the top invoicing software options to help you shortlist what works for you.
Without the right system in place, invoicing can quickly become a major pain point, from spending too long creating invoices to chasing late payments, or just juggling multiple ineffective spreadsheets and legacy tools.
What is invoicing software?
Invoicing software, which could also be an online-only portal, is far more than just a basic billing workflow that you could carry out with your favorite word processing app. These days, effective invoicing also includes payment collection, automation, and integration with third-party tools such as accounting software.
The best invoicing software removes manual work, improves accuracy, and more importantly, helps you get paid on time. So here are five essential features of invoicing software you should consider.
Fast, accurate and easy invoice creation
It might sound obvious, but any type of worker should be able to generate professional invoices quickly using templates that follow brand guidelines and saved client details for personalization. Removing some of the manual steps that used to be involved helps improve time efficiency and reduces errors.
By automating calculations and reusing templates, businesses can spend less time on admin. All it takes is an initial setup phase where common costs and calculations can be added, then it’s just a case of selecting them to generate an invoice in seconds. After all, invoicing isn’t the part of your work that generates cash, so why should you spend an unreasonable amount of time producing bills?
Online payments and automated reminders
Having an online payment processing tool built right into your invoicing software is a two-pronged lifeline. First, customers can pay invoices instantly without having to navigate to another website or app, using mobile wallets or open banking payments, and second, you can easily keep track of the entire process from one dashboard without signing up for different software for each step of the journey.
Customers should be able to pay easily and without any snags. But if they do forget, a friendly nudge via an automated reminder can save you time chasing them manually. You can set your own terms, for example, if a bill isn’t paid within 30 days, then the system automatically reminds your client to pay. You can’t underestimate the importance of getting paid on time — your cash flow will thank you later.
Third-party integrations and automations
With so many SaaS options targeting every type of business, it’s highly likely your stack will consist of more than one tech provider. Integrations that connect invoicing software with accounting tools, bank feeds, CRMs, or project management systems make it much easier to monitor the status of ongoing projects. Not to mention, disconnected systems can easily lead to duplicated data, errors, and wasted time — who wants to find an elusive mistake when submitting a tax return?
Better still, if you can leverage automation to your advantage, you won’t even have to log in for some processes. For example, issuing an invoice could move a project from ‘in progress’ to ‘complete’ in your project management software, and income with specific payment references might move that task into the ‘paid’ section.
Recurring billing options
Businesses that conduct repeat work will find it even easier to issue recurring bills, perfect for subscriptions where a regular direct debit might not be suitable. Recurring bills will use different references and payment links, so it’ll save you from accidentally reissuing an old invoice to a loyal customer and experiencing payment delays. If you’re not available on a specific day or you forget to invoice a client, the system can automatically handle this for you.
From the customer’s perspective, predictable charges help improve transparency and trust. Remember, invoices aren’t just a tool for collecting money — they’re a key interaction between you and your customer, so they should be as clear and simple for both parties.
Compliance, security and audit trails
Whenever you’re dealing with money, you’ll want to make sure you’re keeping records and running everything above board, whether that’s for meeting tax requirements, protecting sensitive data, or keeping clear records you can refer back to.
Audit trails are ideal for monitoring every step of the process, so you’re backed up with proof if a customer dispute or financial discrepancy is ever raised. With proper compliance in place, businesses can also share records with accountants knowing that sensitive customer and business data stays protected.
How to choose the right invoicing software
There’s no right or wrong way to choose invoicing software because every business is different. Freelancers might only need a cost-effective way to issue invoices, but larger companies could want integrations with other software they already use.
Budget might be an important factor in today’s economy, but don’t always settle for the cheapest option. Instead, look at value. If one option is more expensive than another but bundled with accounting software, then it could work out cheaper as a whole package.
You should also remember that evolving Making Tax Digital (MTD) requirements could mean you have to report more thoroughly or more frequently. On that basis, laying the framework with comprehensive invoicing software could be the right way forward.
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