The 5 most useful features you need in your online invoicing software
For any business or freelancer that does client work over the internet, online invoice software is an essential part of the mix. The right ones not only make it easier to get paid, they keep you organized, efficient, and professional.
Not all invoicing software is created equally. Some platforms have features that cater to larger organizations, like team management and permissions, while other platforms cater to freelancers with features like freelancing contracts and a large invoice template library.
Whatever the case, there are certain essential features every online invoice software should have in order for you to get the most out of it. This article shares what those must have features are, why they’re so important, and how they can give you an edge that may mean all the difference.
1. Invoice creation and customization
Over 36 billion electronic invoices are sent every year and that number is growing by 10% – 20% annually. It goes without saying that your clients are used to and even expect to receive invoices electronically. The first and possibly most essential feature of an invoice tool is the ability to create invoices from scratch or from a template.
It doesn’t end there. Many companies have peculiar needs for their invoices. For example, you may have a specific way of numbering invoices or add certain information such as payment terms or notes to every invoice that you send out. Invoicing software for businesses should allow you to make the necessary changes to each invoice so it integrates seamlessly with your current workflow without forcing you to make drastic changes to the way you currently do things.
If you’re creating the invoice from scratch within your invoicing software then it should have an option that allows you to save the new invoice as a template. If you’re using an invoice template provided by the software, you should be able to save the changes you make so it’s easy to access, fill in, and send out to clients in the future.
2. Software integrations
In this day and age, businesses run on multiple software solutions. There are email marketing tools, payroll software, task management tools, shopping carts, etc. It’s important for the invoicing software your business uses to work well with other tools.
In addition to making sure your data isn’t siloed inside of one tool, it makes it easier to derive deep insights that can then be used to improve your business. Another benefit is increased productivity and efficiency because you don’t have to switch between multiple tools throughout the course of the day.
For example, Freshbooks is an online invoice software that has a lot of useful features. When used, it can eliminate a lot of other tools but it’s not the only software you’d need for your business. It has useful integrations with tools such as Gusto to handle payroll, Stripe to process payments, Hubspot for client management, and more. If the online invoice software you’re considering or currently use doesn’t have at least a few direct integrations with popular services then it may be time to look elsewhere.
3. Deep Reporting
Without the ability to access and interpret reports about your business’ activity, you’re flying blind. Any business that flies blind is going to crash sooner or later. Invoicing software for freelancers and businesses should have at least three different types of reports to make your life easier.
Invoice/payment reports. This is the most common report and for good reason. If you don’t know how much you’ve made and how much is still outstanding, it’ll be difficult to plan accordingly or even collect on overdue bills. Look carefully at how the online invoice software prepares and categorizes reports. Can you sort by timeframe, get a lifetime view, and refine the results based on criteria like outstanding and paid invoices?
Expense reports. In addition to the invoice reports, it should be just as easy to get a report of the expenses you’ve made. While recording expenses alone is useful, you should also be able to categorize those expenses. For example, is it a billable expense or an expense incurred during the normal course of business? Tools like Quickbooks make this type of reporting incredibly simple and you can drill down into the data to understand exactly what’s going on.
Tax reports. The tax reporting features aren’t a replacement for qualified tax advice from an expert but they will save you a lot of time and energy. Whether it integrates with tax software or has the basic features built-in, these reports will give you a quick overview of how much you’re paying in taxes and how much you still owe.
4. Payment Processing
Billions of dollars in payments are made online every single day. Your clients, even if they’ve not paid an invoice online, have likely made an online purchase. Paying you online directly through your invoicing software is a low friction activity. In addition to the convenience, it can help you get paid faster.
According to Freshbooks, adding an option to pay online with both a credit card and PayPal, reduces the time it takes to collect outstanding invoices by 20 days. That translates to improved cash flow and better relationships between you and your clients. This makes it an essential feature of an invoice tool.
When implementing the option for your clients to pay you online, look at the fee structure of the online invoice software you’re using. Do they handle payment processing for you for a flat fee, do you have to integrate another platform like PayPal or Stripe and pay a fee on top of their fees, or does the software handle it for free? Another thing to consider is how prominent the pay now button is. If it’s buried at the bottom of the last page of the invoice, your clients may not even realize it’s an option.
5. Automatic reminders and follow-ups
This is often overlooked yet very important in invoicing software for businesses. You’re busy focusing on your core business and trying to chase down delinquent clients can be a real hassle. At the same time, it can strain client relationships when you have to hold difficult conversations around payment.
Find out how your online invoice software handles overdue payments. Is it solely up to you to send out follow up messages to collect on overdue bills? Or is there an automatic system in place to do it on your behalf?
The best tools do two things really well. The first thing is send out reminders about overdue invoices at specific intervals. The software should have an optimal frequency and length of time in which it sends out these notifications. Of course, you can edit these setting to suit your business. Whatever you ultimately decide on, you should at least send three overdue reminders over the course of a few weeks. The second thing it should do is send you reminders about clients who haven’t paid their invoices and have been overdue for some time. This will help keep them top of mind so you can take more serious action if necessary. Tools like Zoho Invoices has this function built in and it can be turned on and off with the click of a button.
Invoicing software for freelancers and businesses is an essential part of growing an organization. It makes it easier to send out and track all of the invoices you’ve created. When used properly, it also ensures you collect payments on time.
Not all online invoice software is created equally. Some of them are missing important features that’ll make you wish you’d never signed up. This article has gone through 5 must have features every invoice tool should come with to make it worth your while. Of course, there will be additional features particular to your business but use this list as a starting point. If you’re still trying to find the perfect invoicing tool, be sure to explore the website and look at the brands on display while using the criteria outlined here to narrow down your options.