Online Invoicing Software your Contracting & Construction Business Needs
The best online invoicing software should be chosen based on a few factors. For construction and contractors specifically, the best online invoicing software is FreshBooks, QuickBooks, and Zoho Invoice.
Online invoicing software is designed to simplify all the accounting and financial needs for both small and large enterprises. However, while a typical accounting tool has all the standard features covered, including profit and loss statement, payables and receivables, assets, liability, and equity balance sheet, the construction industry needs a more sophisticated approach. There are many additional layers of caveats and processes that you need to take into account.
Why general digital invoicing software doesn’t work for construction
To start off, the construction industry is probably the most legally intense sphere out there. With so many stakeholders, both direct and indirect, involved in the process, internal and external risk factors have to be taken into account.
The illustration above shows the general risk factors that can influence the success or failure of your construction business, and there is a high chance that each project will add a bunch more specific matters to the case.
When we dig into the financials, we find even more complications. For instance, a regular bookkeeper is typically responsible for checks, credit and debit charges, expenses, simple journal entries, and simple invoices. A construction bookkeeper also has to think about operations, sales, officer payroll time entries, complex journal entries, payment applications, bank draw requests, change order management, and job deposit tracking.
The same can be said about accountants. A regular accounting payroll includes payroll and state and federal reports. A construction accounting payroll also includes lines such as job costing, billable vs. non-billable hours, assets vs cost of goods sold, WIP report, SOV, certified payroll, etc.
If you’ve just started looking for the best online invoicing software for your construction business, the first step is to make sure that the tool understands your legal needs. An important reason why the legal compliance capabilities of the software must be taken into account is the annual changes/updates to the taxation system.
For instance, the IRS is planning to put the Tax Cuts and Jobs Act (TCJLA) into effect. As mentioned on their official website, it will affect individuals, businesses, tax-exempt and government entities. Because of these changes and the overwhelming pressure of legal compliance on the construction industry, more than 70% of small and medium businesses decide to outsource their tax preparations along with payroll, tax preparations, and audits. These services can be quite expensive for a business, and that’s where online invoicing software steps in.
When the tool is designed with the specifics of your industry in mind, it allows you to save money. Our top two choices, FreshBooks and QuickBooks, the leading online invoicing software providers in the world, are always quick to implement the new ways of doing taxes and keep you updated on legal compliance changes. Here are some more details to help you pick the best online invoicing software for your business:
FreshBooks is a reliable and easy-to-use online invoicing software that has gained massive popularity among businesses of all sizes. It is particularly useful for streamlining invoicing processes and time-tracking expenses. It is primarily recommended to small and medium businesses, but large enterprises can make great use of it as well, thanks to its customization options.
Using FreshBooks is easy as it doesn’t require any accounting experience. It saves you time by automating important routine activities such as client follow-ups, time-tracking, task prioritization, and expenses organization. It also allows you to set up recurring invoices, late payment tracking notifications and get notified when a client receives and opens the invoice you sent.
Apart from these, here are the benefits for the construction industry:
- Accurate financial estimates – FreshBooks estimating feature allows you to maximize your project proposal acceptance rate by presenting realistic estimates that will resonate with your clients.
- Enhanced communication – The mobile app allows you to stay in touch with your project stakeholders anytime, anywhere.
- Real-time collaboration with contractors and on-field teams – All the day-to-day project details can be uploaded directly into the software to help everyone stay on the same page.
- Multiple payment options – FreshBooks allows you to set up multiple payment methods so that each client will be able to pay conveniently, using their own currency.
Next on our list of the best online invoicing software is QuickBooks. Designed for small and medium businesses, as well as non-profit organizations, QuickBooks is an online invoicing software for construction and manufacturing spheres. Apart from the core feature set, the tool offers a number of more complex processes including advanced pricing, payroll, inventory management, and inventory tracking features.
Since both construction and manufacturing industries are packed with stakeholders, the tool allows to easily expand the list of customers, item lists, vendors, and team members up to a million list items. Moreover, up to 30 people can work on the same project simultaneously, which helps meet deadlines. Finally, precise cost estimations allow keeping regular client reports in check, avoiding stress and confusion.
Here are the QuickBooks benefits for the construction industry:
- Industry-specific reporting – This feature offers numerous tools and reports that provide detailed insights into a few industries, including construction and contractors.
- Detailed job costing descriptions – Dive into the details of each job cost, actual costs vs. estimates, profitability, and the profit and loss report.
- Optimized inventory management – QuickBooks allows you to keep your average costs in check by identifying and disallowing negative quantities in your inventory. Also, it will prevent automatic orders for items that have already been restocked.
The last candidate for the best online invoicing software is Zoho Invoice. Zoho Invoice is recommended to small and medium businesses. Being a part of the Zoho software corporation, the tool is great for companies that already use other Zoho services. All the tools can be integrated with each other and used to automatically pull relevant data, thus making digital invoicing a lot smoother.
Among other benefits, Zoho Invoices handles foreign currency invoices with decimal precision and allows customers to pay online using any popular payment method like PayPal. The Review feature allows you to take a look at all the important business operations on a single dashboard. The section provides details regarding products and services that sell better than others, which customers pay on time or have late payments, how long it takes a customer to perform a payment, etc.
Here are the Zoho Invoice benefits for the construction industry:
- Customized pricing – When bidding for a construction project, Zoho Invoice allows you to present your pricing information in a neat, organized manner, customized accordingly to your materials. The tool also gives you the ability to request advanced payments and procurement costs.
- Currency and language match – Regardless of your clients’ location, Zoho Invoice allows you to create custom invoices that will match both the currency and the language of your clients.
- Precise estimations – The software allows you to generate precise estimates for quick approval from the clients’ side. You have the ability to include details like terms and conditions, contractor, and subcontractor information.
While the above-mentioned tools are a great fit for the construction industry, it’s important to note that there is no definitive way to tell the best online invoicing software. The reality is that each business has its uniqueness and needs a personalized approach. When shopping for online invoicing software for construction businesses, make sure that the tool you’re looking at can keep up with, and adapt to, your company’s processes. Among other things, the most important feature of any tool is to seamlessly fold into existing processes, and not force you to make new ones.