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Accounting and Tax Tips Blog

Businesses can’t survive unless they’re making money, and invoicing software can help you get paid quickly and efficiently.  Some companies choose to implement their own invoicing systems, but DIY invoicing can become cumbersome once your company gets larger. The best invoicing software helps you receive payments quickly and efficiently with low transaction fees and user-friendly features. 

We’re covering some of the best billing software for freelancers to help you figure out which is the right option for your needs.  

How to Use Invoices

Businesses use invoices to bill for their goods or services. Each invoice includes pertinent transaction details, payment terms, and a description of the goods or services performed. 

You can make an invoice with nothing more than a spreadsheet, but the best invoicing software suites typically use electronic invoices. Electronic invoices make billing more convenient for customers, and you can track them much more quickly than traditional paper invoices. 

The best invoicing software even includes integrated accounting and bookkeeping software so you can seamlessly manage all your finances in one place.

Best Invoicing Software: What to Look for

Top-tier invoicing apps incorporate a host of features that make it easier for small businesses to manage their finances. These valuable features can help freelancers and small businesses stay on top of their billing without taking up a large amount of time. Here are some of the top features to look for in your invoicing software.

Automatic Billing

The best invoicing apps allow you to bill your customers for recurring charges automatically. If you’re working on a set salary, this can save you a significant amount of time. You can also choose to automatically charge your customer’s credit card to ensure you get paid on time, so you won’t have to wait for your client to submit the payment manually.

ACH Transactions

ACH transactions are a slower but more affordable way to get paid. Most invoicing apps charge a significantly lower rate for ACH transactions than credit cards. The difference often exceeds 2.0%, so it’s nice to have the option. Look for invoicing software that allows your clients to pay via ACH.

Payment Reminders

Some invoicing software allows users to set automatic notifications to remind customers about unpaid invoices. You can usually set reminders to fire according to your preferences, so you’re not locked into one particular schedule. Automatic reminders reduce your clients’ chances of missing a payment, and you’ll save time because you won’t have to chase people around to get paid. 

Debit and Credit Card Payments

Many customers prefer paying their bills with plastic, so your invoicing software should allow them to use credit and debit cards. You will typically have to pay a small fee to accept a credit card payment, so some businesses choose not to accept card payments. Unfortunately, this is a necessary expense in today’s all-digital world, so you’re probably doing yourself a grave disservice if you don’t give your clients the option to pay with their cards.  

Integration with Accounting Software

Save time and cut down on mistakes by choosing invoicing software that integrates with your accounting system. Many bookkeeping platforms also include invoicing features, so check to see if your accounting software has this capability. If not, make sure you choose invoicing software that automatically integrates with your bookkeeping app. 

Affordable Rates

You typically have to pay some kind of fee for the best invoicing software. However, the billing structure varies significantly between companies. 

Invoicing apps have a variety of fee structures. They usually charge some combination of monthly fees, percentage-based transaction fees, and flat fees. You should consider each platform’s cost structure and how you’ll use it to identify the most affordable option. 

Ease of Use

Most business owners don’t have formal accounting training, so the ideal platforms are very user-friendly. You want to choose a platform that displays are essential info about your business in an easy-to-read and digest format. 

The Best Invoicing Software:

There’s no one-size-fits-all answer. The right choice for your business will depend on your usage needs, budget, etc. However, each of these apps has excellent features, so that they might be an ideal fit for your business.

Wave

Wave is one of the most popular apps, and it’s one of our favorites. The easy-to-use platform includes fully-integrated bookkeeping software so that you can manage all your finances in one place. Wave’s free features include automatic reminders, recurring billing, and more. Users pay no monthly fees, and invoicing rates are very affordable. Wave charges 2.9% for credit card transactions with no flat-rate transaction fee. For ACH payments, Wave users pay only pay a 1.0% transaction charge. 

Quickbooks Self-Employed

Quickbooks Self-Employed isn’t as feature-rich as Wave, but it’s a worthy competitor. The platform is backed by Intuit, who makes Turbo Tax and other accounting software. The Quickbooks SE app is exceptionally user-friendly, and it even includes bookkeeping software. 

Intuit charges $10 per month for Quickbooks Self-Employed. Users also pay $1.50 flat for payments via ACH transfer, and credit cards cost 2.9%, plus 25 cents per transaction fee. 

Quickbooks Self-Employed is excellent software, but it’s a bit pricier than many of its competitors. 

Paypal Business

PayPal Business has an excellent built-in invoicing system. It has a wide array of top-tier features, including recurring invoicing, automatic client reminders, and more. Many businesses start out using PayPal in some form, and they often end up using the invoicing software for all their billing! It’s particularly popular with international clients because it offers built-in currency conversions for international clients. 

Users pay a 2.9% transaction fee plus 30 cents for every invoice on PayPal, and it doesn’t offer an ACH transfer option. You also might have to pay to get the money out of your PayPal account, but you can avoid the fee by selecting the slower, ACH deposit option. 

PayPal Business is okay for some online sellers, but some growing businesses may find it restrictive. The fees are on the high side, and paying a 1.0% fee for instant withdrawals is annoying. However, it’s a secure, trusted platform and an excellent option for businesses with international clients. 

Google Sheets / Office365 Excel

Spreadsheet invoicing is the most budget-friendly option. You can use spreadsheet apps like Google Sheets and Microsoft Excel to draft invoices and send them to your clients. This method has the advantage of being free, but it takes up more of your time. However, as your business grows, it may begin to have trouble keeping track of invoices. If you’re committed to using this method, develop a very organized filing system from the start, or you’ll run into problems down the road.

This method is also significantly less convenient for your clients. You’re sending them a bill with your payment information, and it’s up to them to figure out how to get you the money. Clients appreciate having the option to pay quickly with ACH or a credit card, so this is a notable drawback. 

Google Sheets has lots of free invoicing templates, so it’s easy to get started. Here’s one of our favorite free Google Sheets invoicing templates.

Keep More of Your Money

A solid invoicing system is fundamental to your business’s success, and the best invoicing software can help you get all your financial needs organized easily. However, it’s no substitute for a professional accountant or tax advisor. Shared Economy Tax can help you set up a professional-grade bookkeeping system so you can navigate the tax calendar with confidence. Sign up for a no-obligation chat with a Shared Economy Tax expert today to learn how we can help your business succeed and save. You can also access more fee tax tips by signing up for our newsletter using the form below.