What to look for in an invoicing software: A small business guide

Guide6 mins read | Posted on December 14, 2023 | By Keerthana

Be it startups cheering on their first successful sale or enterprises aiming to up their profit thresholds, invoicing is a necessity for any business. Companies used to hire dedicated resources to handle bills and invoices manually, but with the advent of technology and automation, manual invoice management has become a thing of the past.

Today, with many online software solutions that can automate invoice generation, minimize invoice errors, improve cash flow and stay organized financially, saving a lot of time. However, with so many different solutions out there, how does one choose the right invoicing software that matches their business requirements? That's why we've put together a guide to help you understand what you should be looking for while choosing an invoicing software.

Offers customizable invoice designs

Every business has a unique personality, and when invoices reflect that, it adds credibility and professionalism to the service. A customized invoice sets itself apart from others and makes it easy for clients to recognize them from the pile of invoice emails, increasing the chances of getting paid on time.

Opt for an invoicing product that lets you add your business's logo and customize the invoices with a color scheme that matches your brand to enforce professionalism.

Facilitates hassle-free payment collection

When your business provides multiple payment options, you naturally need invoicing software that offers the same choices to your customers. Typically, it includes credit/debit card payment, UPI, net banking, ACH, auto-debit, and e-wallets, apart from cash and check.

When you send the invoice to your customer, the payment link should be made accessible right on the email, making it easy for them to pay immediately. If you've received offline payments for the invoices you've raised for your customers, you should be able to record them in the software. And the same should be possible for partial payments. In addition, your software should enable you to track the payments arriving from multiple modes via a central dashboard.

Automates payment reminders

One of the challenging tasks of any organization is dealing with late payments. With teams having to do detailed reviews manually, identifying and following up on overdue invoices is often time-consuming and resource-taxing. Not to forget, they also eat up your finances if left unattended.

Choose an invoicing solution that helps you catch up on late payments and ensures nothing slips through the cracks. The software should automate payment reminders and close unpaid invoices as swiftly as possible with minimal manual intervention.

Helps create quotes, estimates, and delivery challans

As enticing as it sounds to strike a deal, jump right into the project, and get paid, it's only practical to start your work with estimates. They help you draw up budgets, evaluate the business terms, get a grip on customer expectations, and plan accordingly.

Your invoicing software should let you create clear estimates and send them right to your customer for review and approval. Once your customer digitally approves them, you should be able to convert them into an invoice and record payments against the respective invoices along with the expenses incurred to serve the client.

Be it creating estimates, quotes, delivery challans, or similar forms, with the right invoicing solution, you only have to add the information once, and the software should be able to convert it into whatever format you require.

Supports multiple currencies and languages

With technology connecting the world, businesses are diversifying and catering to global customers. The last thing you would want in this setting is for your customers to miss out on critical information lost in translation. So, if you are a business with an international client base (or aspiring to become one in the future), choose an invoicing software that lets you send invoices and receive payments in multiple languages and currencies.

If you are selling to customers in different regions, you should comply with local invoicing regulations. Although in some countries there are no legislative invoicing rules, properly invoicing your customers does add to your professionalism in the eyes of your customers. So, the best option is to choose an invoicing software that automatically generates invoices that comply with the regulations of the countries you sell within.

Enables recurring transactions

You may have customers who purchase goods repeatedly, or you may start to offer ongoing services. To serve them efficiently, choose an invoicing software that supports recurring invoicing. You should be able to configure and schedule recurring invoices to be sent at predefined intervals automatically and run payment collection like clockwork, saving you time and hassle.

Provides insightful reports

Whether your business is a one-person show or has a full-fledged team, detailed business reports are crucial for making data-driven futuristic decisions. When it comes to invoicing, your finance teams need reports to ensure overdue invoices and late payments don't fall through the cracks.

An ideal invoicing software lets you generate, compile, and analyze critical business reports to monitor outstanding payments, payment failures, refund history, card expiry, and expenses. You should also be able to receive and share auto-generated reports through popular file formats such as PDF and CSV.

Offers powerful integrations

Verify if the invoicing platform integrates with all your other business solutions, such as your accounting software, CRM solution, and other tools. An integrated software setup ensures the seamless flow of data between apps, eliminating duplicate entries and other manual errors. For instance, an integrated workspace can automatically pull billing information stored in the CRM directly to invoices without manually entering them every time.

Comes with cross-platform connectivity

That six-inch smart rectangle in your pocket can run your entire business if you load it with the right apps. If you are self-employed and on the go, the ability to access your invoicing software from anywhere, on any device, is especially convenient. Choose an invoicing solution with a native app that lets you perform any business function whether you're on your desktop, laptop, tablet, smartphone, or even smartwatch.

Ensures data security

The invoicing process includes sensitive information about your company, customers, and suppliers, yet it is often an overlooked aspect of business when it comes to securing them.

When evaluating invoicing platforms, look out for the critical security features they offer and ask about their data privacy and security policies. What does it do with your business data? Which parts of your business data will they keep? Will they share it with third parties, and if they do, why and to whom? Ideally, payments made through the invoicing platform should be processed by the payment service provider with zero data collection and storage by the invoicing solution provider.

Check for PCI DSS compliance. If you store health-related information of your clients and have customers who are EU residents, verify if the platform is compliant with HIPAA and GDPR rules.

Additionally, ensure your invoicing software supports role-based access to prevent duplicate invoices and payment fraud.

Wrapping up

You should consider several factors when choosing the right invoicing solution for your small business. Opt for one that allows you to craft customizable invoices, automates payment collection, integrates with other business apps, offers insightful reports, and provides mobile accessibility. Ultimately, an ideal invoicing solution fulfills your current invoicing needs, fits within your budget, and has the flexibility to support your business as it grows.

If you are looking for a smart, scalable, and robust invoicing solution for your fast-growing small business, Zoho Invoice can be the right fit that checks all your invoicing needs. With Zoho Invoice, you can access a wide range of customizable and downloadable invoice templates, collect payments online, auto-scan receipts, manage expenses, track billable hours, collaborate with clients, and get insightful reports using any mobile device for free.

Start using Zoho Invoice for your business today and see it for yourself.

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