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Published: Jun 07, 2023 20 min read
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Invoicing software makes sending bills and tracking payments easier for small businesses. But there are so many options on the market today it can be difficult to determine the best fit for your company’s unique needs and preferences.

This guide will help you figure it out. Keep reading to find a complete list of the best invoicing software for small businesses and tips for choosing the right fit for your company.

Our Top Picks for Best Invoicing Software for Small Businesses

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Best Invoicing Software for Small Businesses Reviews

Pros
  • Easy-to-use interface
  • Offers an impressive amount of customizability
  • Strong mobile functionalit
  • Has a forever-free plan option
Cons
  • Doesn't integrate with Zoho Inventory
  • Limits you to 1,000 invoices annually

Why we chose it: Zoho Invoice is forever-free invoicing software with optional paid upgrades. It’s easy to use, offers tons of customizability and makes it simple to invoice on the go with mobile functionality.

Zoho Invoice is an invoicing app that your small business can use for free. It features paid upgrades for payment gateways and add-on services such as upgraded expense reporting. It also gives you the ability to enter expenses and create invoices on your mobile device at no additional cost.

Zoho offers a ton of options for customization so you can turn it into your ideal invoicing platform, regardless of what that means to you. The only major downsides are that integrations are limited, and some plans have invoice limitations that could be too low if your company sends out many invoices throughout the year.

Pros
  • Has a forever-free plan option
  • Free plan allows you to send unlimited invoices and estimates
  • Includes real-time inventory tracking
  • Features built-in payment processing (for an additional fee)
Cons
  • Custom invoice templates require a paid premium plan ($20 per month)
  • Processing fees can add up quickly

Why we chose it: Square Invoices has a free plan option that offers features commonly reserved for paid packages. It’s an in-depth app that makes it easy to create invoices without having to pay anything.

Square Invoices is the invoicing platform of the popular Square payment processing brand. This makes it a great fit for business owners already using Square point-of-sale systems and online payment processing, as these are nicely integrated into the Square Invoices platform.

You get access to a lot of valuable features from the free plan, including reporting and cash flow management tools, contract templates and e-signatures. Perhaps most importantly, the free plan offers users unlimited invoices. That’s difficult to find in other free small business invoice processing options.

The biggest downside to Square Invoices is that it only offers customizable invoice templates if you upgrade to a paid plan. There also aren’t any processing fee discounts available, even if you upgrade to a premium plan. These can add up quickly and eat into your profits.

Pros
  • Easily integrates with other QuickBooks products and hundreds of third-party apps
  • Has in-depth features for accounting, record-keeping and financial reporting
  • All plans come with seven days a week of phone and live chat support
  • Highly scalable
Cons
  • Plans have user limits
  • It's more expensive than other invoicing software
  • It may take time to learn how to use QuickBooks Online effectively

Why we chose it: QuickBooks is an industry leader in small business accounting as an all-in-one financial platform and includes excellent invoicing software with even the most affordable plan.

QuickBooks Online includes unlimited invoicing and automatically integrates the data from the invoices you send out into your accounting books. This can save you a lot of time as a business owner, and it’s one of the primary reasons why QuickBooks Online is the best all-in-one accounting solution on the market.

You will also get access to features such as inventory tracking, report customization and even 24/7 live chat support. The downside is that plans start at $30 per month and only go up from there. Plus, you may have to pay more if you want more than several users on your account. QuickBooks Online is expensive, but the price may be worth paying if you’re looking for an all-in-one financial platform instead of a stand-alone invoicing app. With so many features, it may take a little longer to learn how to use it effectively, but the depth of usage may be worth the extra time.

Pros
  • Client portal for communication and easy payments
  • Includes basic bookkeeping and accounting services
  • Integrates with major payment processors, such as Stripe and PayPal
  • Has a helpful mobile app
Cons
  • There is no forever-free plan option
  • Some plans have invoicing limits

Why we chose it: FreshBooks is very easy to use and highly scalable, an important feature for freelancers and small businesses. You can start with an affordable plan and only pay more when your business grows large enough to require additional features.

FreshBooks stands out with a highly intuitive dashboard and a mobile application that offers some of the best functionality on the market. It's also an invoicing software that comes with basic accounting and bookkeeping tools at no additional cost. That makes it a solid choice for freelancers and independent contractors who don’t require an enterprise-scale accounting solution.

The company doesn’t offer a forever-free plan, but prices start around $17 per month and you likely won’t need to pay more than that until your business grows and your accounting needs become more complex. So if you’re looking for an easy-to-use, scalable invoicing app, FreshBooks could be it. [https://www.freshbooks.com/pricing]

Pros
  • Supports 23+ payment gateways and 100+ currencies
  • Delivers comprehensive subscription analytics
  • Helps you discover new recurring revenue opportunities
  • Makes it easier to manage multiple types of subscriptions
Cons
  • Non-starter plans are very expensive
  • It's a complicated platform that may be difficult to learn

Why we chose it: Chargebee is one of the most powerful subscription billing services on the market. It also offers a competitive pay-as-you-go pricing model.

Chargebee gives you everything you need to optimize your subscription billing. The platform has powerful data tracking and analytics features to help you generate deeper insights into your optimal subscription billing practices. The platform also makes it easy to accept payments from a global audience.

Chargebee offers a starter plan that lets you pay $0 per month for your first $250,000 in cumulative billing and 0.75% after that. This will be the best option for most small businesses, as the next plan costs $599 per month and is likely only a fit for rapidly scaling startups.

That being said, there are so many features on the Chargebee platform, it can be overwhelming. You may have a hard time getting used to it, even though the company offers solid educational resources on its website.

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Other invoicing software for small businesses we considered

The best small business invoicing software for your needs may not be on the list above. Other solid options on the market may offer a better blend of features and pricing for your specific business. So with that in mind, here are a few additional business invoicing software options you may also want to consider.

Xero

Xero is a popular accounting platform that also supports invoicing. It stands out with an intuitive user interface and support for unlimited users. But it didn’t make the full list because of its subpar customer service and challenging financial reporting.

Pros
  • Every plan supports an unlimited number of users
  • The user interface is very easy to learn
  • Integrates with more than 1,000 third-party apps
Cons
  • There are some limits on invoicing for starter plans
  • There's no customer service phone number
  • Reports can be difficult to understand

Wave Invoicing

Wave invoicing is forever free to use and supports unlimited invoices and users. However, it’s not very scalable and can’t double as an all-in-one financial platform. It didn’t make the full list because other platforms provide more lasting value.

Pros
  • Offers a forever-free plan
  • Supports unlimited invoices and users
  • Allows you to create customized invoice templates
Cons
  • Limited as an all-in-one financial tool
  • There are no time-tracking features
  • It's not a very scalable invoicing software

Invoice Ninja

Invoice Ninja offers solid, free-to-use business invoicing software with support for recurring billing. However, it didn’t make the full list because of its limitations on clients and users.

Pros
  • Supports recurring invoices
  • Can import transactions from your bank
  • The forever-free plan includes unlimited invoicing
Cons
  • You can only invoice 20 clients on the free plan
  • Both free and pro plans only support one user
  • Won't work as an all-in-one accounting platform

Invoicing Software for Small Businesses Guide

Whether you want the best free invoice and billing software or you’re after the best all-in-one accounting software for your small business, it will be important to research your options thoroughly before making a decision. This guide is designed to help with that process. Keep reading to learn what you should know before choosing your invoicing software.

What is an invoice?

An invoice is a bill that a company sends to its customers. It includes an itemized list of goods and services provided and the prices of each. Invoices inform customers of the total amount they need to pay based on the products or services they purchased.

Invoices also play a big role in accounting. Companies and auditors use them to verify revenue, make financial projections and track inventory, among other purposes. Sending out accurate invoices quickly may even help your small business get paid faster. This is why it’s important to have the right procedures in place for creating, sending and processing invoices.

What is invoicing software?

Invoice management software is designed to make invoicing easier for businesses. It can automate repetitive tasks, complete invoices faster than a human and provide more in-depth insights into your customers and cash flow.

Some small business invoice software also comes with other features. For example, QuickBooks Online is technology marketed as an all-in-one accounting solution, but it also does invoices.

This allows small business owners to choose an invoicing platform that meets their needs. You can find invoicing software for small businesses that does everything for you for a higher monthly price or a simplified solution that’s available at no cost. There are many different options available, which gives you the ability to find a program that’s as affordable as possible while also giving you the features you want.

How does invoicing software work?

Invoice software for small businesses streamlines tasks related to the creation, sending and processing of invoices. You can use it in a few different ways.

For example, invoicing software will help you create and customize professional invoices that are tailor-made to your company’s needs. You can include your logo, auto-populate customer information and send customized recurring invoices to long-term clients. Much of the data entry can be automated over time as you use the same invoicing platform more and more.

Invoicing software can also make it easier to accept payments from customers. Many platforms include the ability to accept online payments from customers. Yours may even allow you to start accepting foreign currencies as payment. Most invoicing software also has built-in payment processing, often through third-party providers such as PayPal and Square.

When you use invoicing software for your small business, report generation also becomes easier. These programs can help you track past-due payments, analyze long-term billing data and generate new insights that may help you improve how you bill your customers.

When you put it all together, small business invoicing solutions can deliver many benefits to your company, including:

  • Minimized late and missed payments by helping you track outstanding invoices
  • Streamlined accounting and financial processes with third-party app integration
  • Simplified payments for customers
  • Improved professional image by creating branded invoices with customized logos and designs

How to make an invoice

Creating an invoice can be a bit challenging when you’re just getting started. You're not alone if you’re wondering how to send an invoice. Here are some quick step-by-step instructions to get you started.

1. Brand your invoice

You should always use branded invoices. These help your business look more professional and establish its brand identity for enhanced recognizability.

Billing and invoicing software make it easy to brand your invoices. You can include your logo on a template and add a professional header with more information about your business to create brand-enhancing invoices.

2. Include the date and when you expect payment

It’s also important to include both the date you’re sending the invoice to the customer and the date you expect to receive payment. When you use invoice automation software, those dates should auto-populate into your tracking platform. This will make it easier to identify missing and late payments so that you can take action to address them faster.

3. Provide a description of the products delivered

Next, include a description of the products and services you delivered to the customer before sending this invoice. You should include the price per item of each product, or in the case of services, perhaps a cost per hour if it’s not a lump sum, the number of units you sold or hours of work you performed and the subtotal for each line item on the invoice.

If your invoice includes a past due amount, make sure that is noted as such.

The goal should be transparency. You want your customers to be able to immediately look at this invoice and verify that they received (or are in the process of receiving) the items you’ve described.

4. Include payment terms

Now you’re ready to include the terms for the payment that you’re requesting. There are several different pieces of information you may want to include here, such as:

  • The payment methods you will accept (credit card, PayPal, cash, etc.)
  • Currencies that your business accepts
  • Penalties for late payments
  • Other conditions of payment, such as discounts for paying early

5. Add any other details you think are relevant

At this point, the invoice is largely made. All that’s left to do is include any other details that you think may be relevant. You can leave these as explanatory notes at the bottom of the invoice (most templates have a field for this).

Some companies use this space to outline the conditions under which a customer will be able to return or exchange their items. But you don’t necessarily need to put anything here if you don’t have anything relevant to say.

You may want to consider adding a thank you message to your invoice, as well.

6. Send the invoice and collect your payment

Now you’re ready to send the invoice to your client and wait for them to submit their payment for the products or services your company delivered. If you don’t want to have to worry about tracking down payments, you may want to look into factoring companies.

The best factoring companies will give you an immediate cash advance on invoices you’ve submitted to clients. In exchange, they charge a percentage of the total invoice amount, which will typically be under 5% total.

Advanced features to look for in invoicing software for small businesses

When shopping for invoicing software, there are some advanced features you may want to look for. These may be able to help you save money or streamline other aspects of your business that you might not have expected. Here are some examples.

Unlimited invoices

First, if you’re a business that sends out many invoices throughout an average month, you should look for invoicing software that doesn’t have limitations. Some online invoicing software places a cap on the number of invoices that you create. But some options don’t.

That being said, access to unlimited invoices is only beneficial if you need it. It may be helpful to look through your previous years of invoicing to assess how many invoices you're likely to send.

Inventory management

You may also want to consider invoicing software with built-in inventory management tools as well. This feature automatically updates your company’s inventory when an invoice for a product gets sent out.

For example, a car dealership might purchase 10 hubcaps from your welding and fabrication business. Those 10 hubcaps could be automatically deducted from your current inventory levels when you send your invoice if you choose the right software. It’s a feature that can save a lot of time but also one that probably won’t be necessary if you sell services rather than products.

Expense tracking

Some invoicing software options also include integrated expense tracking. This feature helps you categorize and track the various expenses incurred while running your business.

Expense tracking tools are commonly found in online accounting platforms like QuickBooks Online and Xero. So if you’re already using one of these platforms, you may not need to pay for the feature again. But combining your invoicing with your expense tracking may help generate meaningful insights for some types of businesses and could be worth considering.

Project management tools

There are also project management platforms with built-in invoicing software. These can be very helpful if you’re also looking for a way to improve how your team collaborates.

For example, Wrike is a project management platform with integrated time tracking for invoicing. It can also help you track projects with multiple contributors more effectively and gain more in-depth insights into productivity.

You don’t necessarily need to find invoicing and billing software that also acts as your project management platform. But it may be helpful to find an all-in-one solution that can do both to generate better insights and simplify your life.

Customizable financial reports

Finally, you may also want customizable financial reporting from your invoicing software. This is often a collection of tools that allows you to generate detailed financial reports based on a list of factors that matter to you.

Using the same software to manage invoices and create customizable financial reports could make it easier to generate these reports since all the data you need will already be in the system. However, it’s another feature you may already be getting from another tool, such as your accounting software, so you may not need to pay twice.

Invoicing Software for Small Businesses FAQ

What is a commercial invoice?

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A commercial invoice is a legal document issued from sellers (exporters) to buyers (importers) in international transactions. It acts as a contract and provides proof of the sale.

Commercial invoices are often a required piece of paperwork for international deals. You may need to create and share them with the federal government before they will allow you to export your products to a foreign buyer.

What is invoice factoring?

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Invoice factoring is the process of selling your invoices to a third-party company so that you can get cash faster. Factoring companies pay out an advanced percentage of the total invoice and then collect the balance from the customer, so you don't have to worry about doing it yourself.

Invoice factoring can save you a lot of time and get you the money you're owed much faster. However, it will also cost you a percentage of every invoice you submit to a factoring company. The service may or may not be a good fit for your small business, depending on how you feel about this balance.

What is the best invoicing software for small business?

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The best invoicing software for your small business depends on what you're looking for. Square Invoices is our top pick if you want free invoicing software for your small business. But if you want an all-in-one accounting solution that also acts as invoicing software, QuickBooks Online will be the better option.

How We Chose the Best Invoicing Software for Small Businesses

While compiling this list of the best invoicing software for small businesses, we considered a variety of factors. Here’s a closer look at what we reviewed before reaching our conclusions:

  • Pricing: Pricing is the number one point of concern for many small business owners shopping for software. We considered differences in value offered by different invoicing software.
  • Features: We looked at the features offered by each invoicing software option and considered how beneficial they could be to small business owners.
  • Customer reviews: We considered verified customer reviews to assess how real small business owners felt about each of the options on our list.
  • Integrations: Invoicing software that integrates with other applications make it much easier to run your business and generate in-depth insights. It’s another factor we looked at while creating this list.
  • Scalability: We also considered how scalable each invoicing program was. If you might need to change software when your business grows, we let you know about it.

These are some of the most common factors that matter to small business owners who are looking for invoicing software. But they may not be all the factors that matter to you. You may wish to conduct further research if you have unique needs or preferences.

Summary of Money’s Best Invoicing Software for Small Businesses