The 7 Best Invoice Software Options for Small Businesses

Invoicing software will help your business get paid faster. The right software gives you the tools you need to enable customers to pay on time. You’ll also track sales and billable hours with ease, improve your cash flow, and save tons of time in the process.

But not every invoicing software solution has the same features. Also, some have a steep learning curve, which can be a problem if you don’t have a lot of free time to play around with your new software before using it.

At the end of the day, you need the best invoicing software for your business—not necessarily the most expensive or feature-rich product on the market. Your software should suit your invoicing needs, budget, and user style.

Let’s dive into your options so you can choose the best invoice software for your business. In this article, we cover what invoicing software can do, the different types available, and leading options for small businesses.

What Is Invoice Software, and Why Do Small Businesses Need It?

Nearly half of the invoices produced in the US go overdue. Late payments force small businesses like yours to waste time tracking down overdue payments. You also risk cash flow challenges.

But with invoice software, everything changes.

Invoicing software generates invoices and sends them to clients for you. Then, your clients can pay right away, which helps your business get paid on time.

With most types of small business invoicing software, you can also send out automatic payment reminders. Your software should also enable you to request a partial down payment and generate estimates for new projects.

These features make it more convenient for your customers to pay you, encouraging on-time payments. Plus, it reduces your accounts receivable team’s workload. Or yours if you handle your company’s incoming invoices.

Basically, the software removes the need for cumbersome paper invoices. It does this by digitizing the invoicing process. That means you won’t have a paper trail (unless you choose to print out all your invoices). But what you get instead is far more sophisticated. It’s tax-prep and accounting-friendly and easier to manage.

With invoicing software, invoice and payment tracking is automatic, which will save you a lot of headaches when it’s time to do your taxes.

Even better, the best invoice software for small business will integrate with your accounting software. When these tools talk to one another, everything is streamlined.

You can also opt for a platform that comes with accounting features. These can help with everything from expense tracking to cash flow management.

All in all, invoicing software is a useful tool for small businesses. And, if you want to modernize your billing processes and say goodbye to the problems that come with overdue invoices, it’s essential.

The Benefits of Using Invoice Software

Let’s look at the main benefits of invoicing software for small businesses.

Enables Customers to Pay You Faster

Probably the best thing about small business invoicing software is that it helps you get paid faster.

Late payments impact your cash flow. They also make it difficult to create an effective budget because you can’t predict how much cash you’ll have on hand.

Additionally, if a large percentage of your customers pay late, you could have a cash flow problem.

What happens if you don’t have enough to cover labor costs, rent, and other business expenses? Will you have to take out a business loan to pay your bills?

The reality is that overdue invoices can create cascading issues. You might have to spend money on interest charges to cover the revenue you’ve already earned. Or, you could up incurring late fees. 

There’s also the time wasted on chasing payments. According to a survey commissioned by QuickBooks, mid-sized companies in the US waste 14 hours a week, on average, tracking down unpaid invoices.

Invoicing software might not eliminate all your late-payment headaches, but it will reduce them. How? By encouraging clients and customers to pay on time.

• With software, your customer receives a professional-looking invoice with a clear due date and a call to action to pay now.
• You can set up convenient online payment options, such as credit card payments or paying via a bank account transfer.

Just imagine this scenario: one of your clients is sitting at a table at their favorite café waiting for their lunch to arrive. They get an email from your business with their invoice, the amount due, a due date, and a convenient button to pay online.

They have a few spare minutes before their meal arrives, so they decide to pay now and cross one more thing off of their to-do list. They click the payment button, enter their payment information, and that’s it!

With a paper invoice, your client has to find the time to sit down, write out a check, update their accounting books, and mail the payment to you. That’s going to take a few days, and if your client is busy, it might take weeks before they pay the invoice.

It’s pretty easy to see: when you remove payment friction for your clients, you make it far easier for them to pay you on time.

Frees Up Your Time with Automation

But the best invoicing software doesn’t just streamline payments for your customers. It also helps you save time. First, when your invoices are paid by their due date, your business doesn’t have to throw away time calling clients or sending out emails.

Second, the software uses automation to handle manual tasks. You can automatically send invoices to customers that have a recurring bill. You can also set up automatic payment reminders—reminding clients who haven’t paid yet that their invoice is due. Then, you can send out another reminder if it goes past due.

Because your software is taking care of all these communications, your business spends fewer hours each week making sure clients pay their invoices.

Provides Tools That Enable Smarter Decision-Making

A lot of the leading invoicing software options for small businesses come jam-packed with useful features that simplify accounting and financial management.

You might be able to track things like which customers pay consistently, what products or services sell the most, and where the bulk of your business income comes from.

Imagine how useful this information can be for making business decisions. For example, you’ll know what service (or product) is your best seller. Then, you can tailor your marketing messaging to highlight that service and attract new customers.

Leads to Fewer Invoice Errors

Researchers have found that 61% of late invoice payments occur because of incorrect invoices.

With software, past payment and client data are stored for you. As a result, you’re less likely to make mistakes when creating invoices. That prevents errors from turning into one more reason why your payments might be held up.

Also, the software can calculate the balance due for you, so there’s no risk of calculation errors.

If a client does identify an error, you can easily fix the mistake. Your software will send them a new invoice online in a few minutes. And you don’t have to generate a new paper invoice and mail it to them.

The bottom line is that digitizing the invoice creation, sending, and payment processes makes everything move faster.

Offers All the Benefits of Cloud Software

Another advantage is the cloud. All of the best small invoicing software platforms are cloud-based, which means your data is stored on remote servers.

That means two things:

1. You can access your invoicing software from anywhere and on any device. As long as you have an internet connection, you can send invoices, process transactions, and check to see what’s been paid. You can do all this from your laptop, mobile phone, or another device—and you don’t have to be in the office to do it.
2. Your data is backed up on the cloud. So, if your laptop is stolen or your office hard drive breaks down, your and your clients’ data aren’t lost. It’s all stored safely on off-site servers managed by your invoice software provider.

The Different Types of Invoice Software Available

When browsing the different types of invoice software for small businesses, you’ll notice there’s a wide range of options. Some are simple and budget-friendly. Others are more complex and expensive.

Let’s look at your options so you can figure out the type of invoicing software that would be best for your small business.

Free Invoicing Software

Some software products are available for free, and they do a good job if you’re just looking for something to generate invoices and send them to clients.

There’s usually some caveat, however. For example, you might only be able to send invoices to a limited number of clients, or integrations might be limited.

But if you’re a small startup on a shoestring budget, free software might be a good way to get started.

Invoicing Software with Bookkeeping Features

As a business owner, you’ll need some type of accounting software to help you manage your books and handle expense tracking. If you don’t already have accounting software, you can opt for invoicing software with accounting features.

While not quite a full accounting solution, a basic solution might be ideal. You won’t spend time trying to learn features you don’t need. It’s also budget-friendly.

Invoice and Billing Software

Another option is robust invoice and billing software. Something that won’t fulfill your accounting needs, but will go far beyond your standard invoicing solution.

These invoicing solutions will have useful billing features, such as the following:

• Subscription billing
• AR (accounts receivable) management
• AP (accounts payable) management
• Estimate management
• Project management
• Client management

For businesses that need to spend a little more time nurturing clients, like general contractor businesses and landscaping companies, a feature-rich invoice and billing solution can work well.

Full Accounting Suites

But what if you want it all—an advanced invoicing solution and an accounting system? That’s where full accounting suites come in.

They’re more expensive, and there’s a steeper learning curve. But if you put in the time to learn how to use them (or have an accountant on staff), they are a powerful tool for growth.

How to Choose the Best Invoice Software for Your Business

Choosing the right invoicing software for your small business will ensure you get all the benefits of this technology without overpaying or wasting time on features you don’t need. But figuring out what’s best can be a process in itself.

Here are some of the factors you should consider when comparing invoicing systems:

Integration Needs

Will you need your invoicing software to integrate with your accounting system? What about your sales channels, payment gateways, and your customer relationship management (CRM) system?

Being able to integrate with other systems is going to save you a lot of time in the long run. Think about what software you use now or might purchase in the near future. Then, verify that your invoicing software can work with your other business apps.

Software Budget

Invoicing software can help you save money because it can lead to faster payments and more on-time payments. But you don’t need to get one of the most expensive solutions to achieve those benefits.

If you’re a new business, it’s okay to start small with a free or low-cost invoicing solution. You can always switch to a more comprehensive system later on.

Ability to Scale

If your business is on a growth track, you might be worried more about scaling than saving a few bucks a month on your invoicing and accounting software.

Consider your growth needs. Decide if you’d be better off with a more comprehensive system now so you don’t have to piece together multiple systems down the road.

Industry

Another factor is the needs of your industry. For service-based businesses with multiple employees, invoicing, time tracking, project management, and estimate generation are all part of the game.

If that’s the case for your company, you might want a more comprehensive invoicing and billing solution.

For very small companies, solopreneurs, and freelancers, a simpler solution that’s easy to use might be a better fit.

The Top 7 Invoice Software Programs for Small Business

Fortunately, small businesses have plenty of options to choose from. That means you should have no problem finding software that fits your invoicing needs like a glove.

Here are 7 of the best options on the market today:

1. Zoho Invoice

If you’re looking for a free yet robust invoicing program, you’ll enjoy Zoho Invoice. It comes with professional invoice templates, automation, and built-in time tracking.

It does, however, have a few limitations. You can only send 1,000 invoices a year, and you can’t integrate with non-Zoho accounting systems.

Learn more about Zoho Invoice.

2. Invoice Simple

Looking for a simple invoice solution that does the job without unnecessary complications? Then you may want to check out Invoice Simple. (Full disclosure: Invoice Simple is owned by the same company that owns Inside Advisor.)

Invoice Simple is designed to make it easy and quick to invoice from the web or your phone. Professional invoices can be created in with lightning speed and sent from anywhere.

Invoice Simple even has a free invoice generator you can take for a test drive if you’d like to see how it would work for your business.

Learn more about Invoice Simple.

3. FreshBooks

FreshBooks is another user-friendly option with unlimited invoices. The good news is the basic plans are affordable. With this software, you can:

• Create professional invoices in a couple of minutes.
• Track outstanding invoices.
• Generate estimates and proposals.
• Automate recurring billing, late-fee additions, and notifications. 

You also have access to accounting features, making it super easy to create your balance sheet, profit and loss statements, and other financial statements.

The downside: it’s not budget-friendly if you have more than a handful of clients. If that’s true for you, consider starting with a more feature-rich system.

Learn more about FreshBooks.

4. Bill

Bill has both accounts receivable software for invoicing and accounts payable for managing business payments. You can also opt for unlimited cloud storage.

For growing businesses that spend a lot of time paying suppliers and  tracking incoming payments, Bill is worth exploring.

Learn more about Bill.

5. QuickBooks Online

QuickBooks is one of the most well-known accounting systems for small businesses. It comes with rich invoicing features, integrates with payroll, and automatically tracks business income and expenses. And, with four different plans, this is a system that can grow with you.

If you want invoicing and accounting in one and have the budget for it, consider QuickBooks.

6. Invoicera

Invoicera is one of the best invoicing systems for service-based businesses with a team of contractors or employees. It’s loaded with features, including tools for staff management, invoice template customization, online invoicing and payments, estimate management, and time tracking.

You’ll pay more for the extra features, but if they can help your business succeed, this software is worth checking out.

Learn more about Invoicera.

7. ZipBooks

ZipBooks gives you all the bookkeeping tools you need to run a small business, as well as invoicing and billing tools. It also helps you make smarter business decisions with a suite of business intelligence tools, including an invoice quality score and a business health score.

Learn more about ZipBooks.

Help Your Business Grow with Streamlined Invoicing

Whatever you choose, the main thing is to ensure it has the features your business needs.

From the ability to create invoices on the go to being able to organize and track expenses, the best invoicing software can make managing your invoices a breeze, which means you’ll have more time to focus on growing your business.

Here are four things you can do today to get started:

• Decide your budget.
• Identify what features are essential now.
• Create your short list of the three to five platforms that are a good fit for your company.
• Request a demo and quote from each.