What is Invoicing Software? Types, Feature Analysis, Trends, and Cost

Does creating invoices exhaust you?

It surely would. And we know when it comes to invoices, there are no ifs and buts because it has to be accurate. Nevertheless, even finance experts find it overwhelming as well. Not believing us?

According to an SEM survey, 82% of financial departments feel overwhelmed with the different invoices they receive. And they expect a solution to improve the daily process of invoices.

But that is also one of the reasons you are here, to know the solution. And we have a solution for that and it is invoicing software.

What is Invoicing Software?

Invoicing software is a tool that helps you to create invoices. It lets customers pay you instantly and streamline the billing process. The tool allows you to send professional invoices to suppliers/clients.

The invoicing software is cloud-based software, so all relevant required information like company’s name, invoice number, and date to create an invoice already exists. Moreover, it saves your time and money by offering paperless invoices.

However, do you know the best part of Invoicing software? It lets you generate an invoice in just a few clicks. Also. the software helps you to provide a better picture of business finance. So let’s understand it more briefly in the next section: what does invoice software do?

What Does Invoicing Software Do?

1. Create and customize invoice

   

   One of the primary reasons for using invoicing software is that it’s easy to create and has customization features. With invoice software, you can easily create a professional invoice anywhere and anytime.

   Moreover, the invoicing software lets you have access to information for generating invoices promptly and easily. You do not need to be an expert to create invoices; all you need is the necessary information mentioned below:

   • Customer’s name
   • Quantity of the item
   • Amount and price of the item
   • Payment terms
   • Sales tax
   • Discount (option)

     In addition, multiple transactions with one or several suppliers become easier with invoicing software as it saves every piece of information.

     Moreover, invoicing and billing software allows you to add personalization to the invoice by customizing it. With the customization, you can add your brand’s logo, font, brand color, and suitable size.

     The invoicing and billing software is the quickest way to send invoices directly to clients or suppliers through email. That also indicates that you don’t have to waste hours on paper or manage bookkeeping accounts manually.

     You don’t have to pile up a bunch of papers for invoices, and there would not be any mess in your business finance flow. Just a few clicks and your invoice is ready.

Also, the online invoicing software has invoice templates that allow contractors to create customized invoices in a few minutes. 

2. Facilities Payment and Billing

Invoice is all about billing and the payment process. The essence of an invoice is getting paid for your hard work. Now if we talk about invoicing software, how can the billing and payment process not be part of it.

The invoicing software makes the payment and billing process effective and effortless. How? To understand that, let’s compare two situations: before and after modern technology. Earlier, the contractor had to invest several hours to create invoices. Also, he has to assign different invoice numbers for diffraction.

In such a situation, writing the wrong amount or price changes is high. And humans tend to make mistakes, miss out on critical points, and eventually affect the business’s credibility.

But the situation is quite contrary after the arrival of modern technology like invoicing software. Such mistakes are pretty low because the software has all the data saved. So even though there will be mistakes, they can be changed quickly and sent right at that moment.

That shows the convenience invoicing software provides to the contractor. In addition, the software helps to set recurring invoices for existing customers.

The right invoicing software simplifies accounts and receivable management with its automation process. Moreover, The right invoicing and billing software like InvoiceOwl, QuickBooks Online, Zoho, etc simplifies accounts and receivable management with its automation process. Moreover, debit and credit card payments can be made with invoicing software.

Several invoice software has third-party integration for secured online payments, so billing becomes more accessible with other platforms like PayPal, Stripe, or RazorPay. In a nutshell, invoicing software allows accepting payments online.

3. Generate report

Invoicing software helps you to generate reports that offer you insightful information on your business finance and cash flow. It further aids in tracking payment, matching deadlines, detecting outstanding invoices, and even chasing payment.

You can export automated reports into PDF, word, and excel files. Moreover, you can analyze past data to get the number of sales invoices, due invoices, outstanding invoices, and the average time of the payment cycle.

The metrics will help make future decisions and give a picture of business metrics. You can even get insightful information on the ratio of your clients paying on time or late. The generated report is easily accessible and can be sent through email. Share or receive a file/ report in a few minutes.

In short, the invoice software helps to manage all transactions and records with the generated reports. It is quite clear that you will be able to get all relevant information like financial KPIs with invoice software. This led to faster and more effective business decisions.

After understanding what invoicing software does, let’s dive into its types for a more brief understanding of invoicing software.

What Are The Types of Invoicing Software?

Before adopting the top invoicing software for your daily contract task, it is vital to understand different types of invoicing software. There are three types of invoicing software mentioned below:

1. Online invoicing software

   The most preferred and used type of invoicing software is online invoicing software. The reason why it is so preferred one because you can access it anywhere and anytime. A contracting business is not just a business you can work in a cubical place.

   For example, a contractor needs to go out for work, and at that moment, a client from previous work informs them that work is done. To not delay (which also leaves a bad impression), the contractor sends an invoice to the clients right at the moment.

   It was possible because of online invoicing software like InvoiceOwl, which allows contractors to create and send invoices anywhere and anytime. The contractor does not have to worry about placing the right information and amount on the invoice.

   Moreover, a contractor with less knowledge of accounting software can create invoices by using online invoicing software. It is easy to manage; all you require is a device ( mobile or desktop) with internet connectivity.

   Without the internet, you cannot function in invoicing software, so it is mandatory to have a device with an internal connection, so your data is saved in the cloud. If you are looking for software with a dedicated system, you should opt for online invoicing software.

2. Offline invoicing software

   Another type of invoicing software is offline invoicing software. Many contractors misunderstand its paper and the old traditional invoice format, but there is a difference.

   The data is saved on your device in the offline invoicing software but not on the cloud. Several invoicing software offers an offline mode; mostly, they allow the download of invoices in Word, Excel, and PDF format.

   The contractor can edit and send the document to the client in this software. However, offline invoicing software lacks time as first they need to download, edit, and then send. The entire process is quite time-consuming and partially manual.

   Using this type of invoice software, you would not be able to automate the process, so you and your team must modify invoices and receipts manually. While performing this process, you don’t require an internet connection.

   However, a few invoicing software allow you to connect to the internet, make invoices and quotes, and then send them to the clients. Even they have the option of account payment and generating records. But all that data will be saved in the system, not in the cloud.

   It will be a one-time process, where you must fill in new information every time you generate an invoice. It may sound similar to online, but it is slightly different in storing data. If you are using software for a few invoices, you should opt offline.

3. Open-source invoicing software

   Open source invoicing software can modify as per your business requirement. It is programmed with source code which allows the contractor to change, review, and distribute software.

   However, it will be specially designed for the particular business and its needs. So, it is essential to know and be clear about your business needs. Do you know it can also be related to online invoicing software?

   Numerous online invoice software provides API documentation on their website in the context of information. You will also find codes for the developers. After you’re clear on which type of invoicing software you want for your business, it is time to discuss why you should use invoicing software for your business.

Features of Invoicing Software

Invoicing solution has a wide range of feature sets, pricing, and target users, but there are also standard functionalities that you will find in every invoice software. Following are those features:

1. Professional invoice

No matter how much effort you put into creating invoices manually, the chance of it looking professional will be less. But thankfully, we are in the digital era where we have solutions for minor to major problems. And invoicing software is one of the solutions. The software helps you to generate professional invoices just within a few clicks, much faster and with less effort

than required in a manual process. Also, the cloud-based system does not let you miss any relevant or important information you need for an invoice.

A professional-looking invoice will help you as a contractor to impress clients and win more contracts. Not just that, invoicing software offers to generate invoices clean, and you can customize them as per your needs to signify your business brand.

Hence, because of invoicing software creating a professional invoice has made access easier and simpler.

2. Customer data record

Having a customer data record that you can access quickly is no other a big relief for several contractors. Because managing customer data is not a piece of cake and is quite challenging for contractors. However, invoicing software makes it effortless.

Apparently, the cloud software saves and stores your customer data automatically, so you do not have to waste time doing repetitive tasks.

What else will you get from this feature? It allows you to summarize client purchase information. Therefore, you can extract information for the projects like customers’ data, and manage timesheets.

Invoicing software enables you to attach relevant files in one place. The database can easily be accessed, and you can search it with the search filters. And there is no need to have second thoughts about it because your records are secure and safely backed with invoicing software.

It will also boost the productivity of the business operations and improve finance flow. As the workflow will be streamlined, the relationship between contractor and client will be enhanced.

3. Credit card processing

The billing & invoicing software facilitates online payment process by providing a method for customers’ credit card payments. The payment process is a crucial step in the invoice process, and invoicing software makes it streamlined for you.

Invoicing software helps you to save time with its quick credit card process. It allows recurring billing and assists in securing customer management. Moreover, several invoicing software has auto-billing of credit cards, so the users would not miss any deadline or due payments.

4. Predefined emails

Outlook of bills and invoices are equally crucial as accurate invoices. Thus, predefined emails are part of the invoicing software. It provides you with pre invoices communicated templates which save your time.

Do you want to know another benefit of it? It helps you communicate professionally, and your work is done in half of the time you usually spend. It also lets you personalize your accounting process and represent your brand.

For instance, you have sent an invoice to your client. The client will receive an email stating,‘ Hi (your name) has sent you an invoice.

In this email, you don’t have to worry about conveying the right message as the automated feature will get the accurate message.

5. Multiple currency settings

Contract business is not limited and not restricted to locals. There are times when the contractors have to deal with outside materials. Now, imagine putting yourself in the shoes of a contractor who needs to send invoices. Will you spend hours calculating and converting the final amount?

No, you already have plenty of tasks to accomplish, so you will not like to spend hours converting the amount and creating another invoice for it. But by using invoice software, you do not have to waste those precious hours. Numerous invoicing software has multiple currency settings that allow you to convert an amount.

For example, you run a contract business in the USA, and a client from India has approached you for the materials. You agreed and also finished it. Now, you do transactions in dollars and clients in rupees, and both need to show the amount for the financial records.

The invoice software allows you to convert money into multiple currencies, so you don’t have to spend time calculating. Moreover, you can show the invoice as the official record.

6. The amount and tax report

One of the primary purposes of invoicing software is to eliminate extra work and reduce workload. However, managing amounts and tax reports is demanding and can be problematic sometimes.

However good invoicing software will allow you to perform an external system for tax reporting within the same invoice system. And you do not have to spend hours summarizing information for it.

The report will help to prevent unnecessary expenses and financial errors. It will also ensure that you have relevant tax information; by this, you will save time and effort. The report has all the insightful information so you can make well-informed decisions from it. How Much Should You Charge on a Rental Receipt Invoice?

The analysis is created by adding financial KPIs and necessary key business metrics. Moreover, the analysis will help you to shape your business better and make important decisions accordingly.

Why Should You Use Invoicing Software?

1. Minimized late payment

   You are managing a business. Whether it is small businesses or large businesses, you need to handle everything along with the financial flow of income and expenses. So we know you have to plan in business about the payments.

   And invoicing software is no other savior for it. Now you will be wondering if you will be able to get paid faster. Yes, it does, but most importantly, it does not let late payments. With invoicing software, you can minimize late payments by sending invoices promptly.

   You save half of your time if you use invoice software for recurring invoices rather than creating and sending them to the client manually. Unfortunately, thus, it does not allow you to have space for a late payment.

2. Reduced Error

   As we mentioned earlier, we humans tend to make mistakes, and that’s okay. But sometimes, it affects the business greatly and leaves a negative impact. Invoicing software is an automated process with a command function.

   It does not allow contractors like you to make a silly mistake or assign the same invoice again. Invoicing software decrease errors and helps you to notice what comes into the invoice. A clean and accurate invoice will help you impress and win more clients.

   It is beneficial for the long run especially when you will manage multiple clients at one time. There should be no room for error in such a situation because it will not affect one invoice but entire financial transactions.

3. Maintain professional image

   There are business standards and norms to be followed in every business. Whether you own a small or large business, you need to work professionally to get clients. Also, in the business world, a professional image is a must.

   An efficient invoicing and billing solution helps to improve a company’s reputation, leading to positive brand awareness and boosting sales. With invoicing software, you would be able to customize invoices and add your company’s logo and brand color.

   So, you do not have to redesign your invoice every time you are issuing. The invoicing software allows you to put the same design on your invoice and payment documents. That reflects your business brand.

   Moreover, the event of billing error would be reduced as you follow the standard format. Therefore, it will impact positively on your brand.

4. Less fraud and better security

   Several contractors do not opt for digital solutions because of increasing fraud and scams. Their concern is indeed right, and there is no denying that there are fraud and scams occurring in the digital.

   However, you will not find that case in the invoicing software. The best invoicing systems are backed with a high level of security features to ensure that your billing and invoicing operations are secured.

   Thus, your invoice software is protected from hacking or fraudulent activity. It also led to a billing and invoicing process with invoicing software being safe.

   For example, creating invoices manually and sharing them as email attachments to your clients is riskier than sending them directly through the software.

   This, too, will lead to gaining clients’ trust and an increase in sales. And let’s not forget, it looks professional too.

5. Streamline accounting and financial processes

   Best invoicing system seamlessly processes accounting and finance with its prompt invoicing process. With invoicing software, you can save time that is spent on payment and its follow-up because of the remaining feature.

   The invoicing software will help you resolve errors in a shorter time and streamline accounting and financial processes. Likewise, there can be increased cash flow and enhanced customer services.

How Much Does It Cost to Use Invoicing Software?

After knowing what invoicing software is all about, one thing that appears in everyone’s mind that is invoicing software cost. Questions like-

• How much does it cost?
• Is it affordable?
• What features do they provide at that cost?
• Is the cost worth using invoicing software?

Well, every invoicing software offers different features in the multiple price range. However, if you are looking for affordable invoicing software with a wide range of features, try InvoiceOwl.

It offers a free trial opportunity to use and create invoices. Moreover, the software is not only limited to invoices as it allows you to create estimates, purchase orders, and credit memos. You can control your finance flow with InvoiceOwl as it helps to

Latest Trends In Invoicing Software

1. AI and automation

   Artificial intelligence and automation technology are ruling in every sector, then how invoicing industry can be left? It is booming because of its quick solution on every stage and step.

   As the technology and its functions increase, invoicing is getting more automated. It also led to the possibility of fewer errors and incidences of late payments. Likewise, Artificial Intelligence will allow to smoothen cash flow, help to identify invoice fraud, and automate the reconciliation process.

   The AI will help send invoices faster and even if there is less connectivity. Also, it improves the automation process and cross-checks the information with its system. Moreover, the contract data of AI are used for 2 way or 3-way validation process.

2. Government-led Adoption

   The rising adoption of invoicing software is getting noticed and recognized. Even several governments have started adopting invoice software and spreading the word about it. But do you know what other message it passes?

   Government-led adoption of invoice software shows how reliable and efficient invoice software is. Countries like Mexico and Brazil have witnessed a high rise in e-invoicing because it saves time and has positive outcomes.

   The governments of Canada, New Zealand, Australia, and South Africa are urging compliance with e-invoicing requirements. As a result, the demand is increasing, which is why it is a part of a trend.

   For example, in 2018, the US Office of Management and Budget announced that every government agency would adopt e-invoicing.

3. Real-time economy

   Slowly and gradually, businesses have started acknowledging e-invoicing and its efficiency in the financial market. This has had an impact on the real-time economy. As the workflow of finance and cash flow increases, there will be an improvement in the economy,

   The real-time economy is one where the contractor would be able to validate data quickly, and the supplier would be able to respond simultaneously by using invoices. Then, the supplier can modify and send it again within 24 hours.

   It will reduce late payments and penalties, which will boost the entire sales process. It also helps you to close the deals quicker and receive payment.

4. Digitalize adoption

   Everything has turned digital and giving contractors a surreal experience. As digital technology and use are increasing, different and unique features are coming out.

   For example, you can make and do entire final transactions through e-invoice. Moreover, you do not have to be present at that place for the financial transaction, as everything can be done digitally.

   Digital adoption has made the invoicing process easier and easily available to everyone. A person with zero accounting background can make a professional invoice like a pro with it.

What Factors to Consider While Using Invoicing Software?

Using invoicing software is never a bad choice; it will be a fruitful investment for you. But some factors need to be considered before adopting your suitable invoice. Therefore, here is the list of aspects you require to consider:

1. Must be secure and safe

   Business and customer data are very crucial for any company. Whether you are dealing with one client or multiple clients, how can we miss it in invoicing software? The right invoicing software should be secure and safe.

   For payment, several contractors link their bank accounts with invoice software. Now imagine, it got hacked; you will probably lose all your money. Therefore, it is vital for your invoice software to be safe and secure to ensure that you do not lose any important data.

2. Fit your business context

   There is absolutely no point in using invoice software if it does not fit your business needs. It will simply waste your money and time and leave you with a complete mess. So, before choosing invoicing software for your business, check the context first.

   Check whether it is suitable for your business, how useful it is for your business, and what benefits you are getting from that software. Whether you use free invoicing software or paid software, several features like automated estimates, invoices, purchase orders, and payment systems should be there.

   Do pay attention to the invoice payments method because that method and inventory management are interlinked.

3. Easy to use

   Invoicing software is created to make contractors work easy; now, if the software is hard to deal with, what’s the point?

   The invoicing features and use of software should be easy and simple. Even a person who holds less knowledge about it or a layman can use it effortlessly. Choosing billing software as a small business owner with efficient invoicing tools can make your work easier.

   Also, ensure the invoice in the software are clear and expertly designed. A professional and effortless invoice is what every contractor is looking for.

4. Efficient customer support

   Invoicing software is a cloud-based platform, so there is often a high chance of bugs and issues. Nevertheless, contractors like you would not have the technical knowledge to resolve bugs and issues.

   You will require software with good customer support for a seamless workflow. There are plenty of tasks to achieve in your contract business, and an interpretation from the software would be the last thing you expect.

   The support can be in the form of tutorials, a knowledge center, and a chatbox. The customer service should be reliable and easily accessible to connect.

Common Issues With the Invoicing Software

Every software has its pros and cons; invoice software is no different. There are common issues like no global standard format and protocol faced by every contractor in the world. Let’s talk about it in detail.

If you have been running a business for a very long time, you will have noticed that there is no same format or global standard format of invoices. Yes, the information is the same, but the information’s placement is not the same.

For example, let’s take two countries, the USA and Russia. If you take invoices from the USA, you will find your company’s name comes first, whereas some invoices from Russia use invoice numbers first.

Both are equally important for invoices and are correct in their way. However, the style of the format is different, but all are acceptable.

But if you are looking for invoicing software that lets you accept online payments quicker and with zero error, try InvoiceOwl. The cloud-based software allows you to create and send an invoice, estimate, purchase order, and credit memo. How Much Should You Charge on a Rental Receipt Invoice?

We still have a section left to discuss the most frequently asked question regarding invoicing software. So let’s find out what are the most asked questions.