Small businesses and freelancers most often manage their finances. They usually can’t or don’t want to pay accountants. It means they must do most of the accounting chores manually, including routine tasks such as creating, organizing, and tracking bills.

Thankfully, there is technology. According to recent accounting software statistics, accounting is the most automated business process. That means there are SaaS solutions that will help you keep track of your bills, clients, expenditures, and income while reducing the cost of an accountant.

In most cases, we are speaking of simple, user-friendly software solutions. They are usually quite affordable or even free.

Statistics are straightforward—the digital invoicing industry is projected to grow by 80% in the coming years. The reason behind this growth is the efficiency and excellent price-benefit ratio of SaaS accounting services.

Approximately 64% of small business owners report that billing automation increases their business efficiency. In addition, 44% of them agree that their services improved overall quality.

Sound good? Let’s go a bit deeper into the subject.

Accounting, billing, invoicing software: what’s the difference?

The terms accounting, billing, and invoicing software are often used interchangeably. However, the differences, while subtle, are essential to understand.

Invoices and bills refer to the same thing but from two perspectives. So, for example, you designed a logo for your client. To collect your payments, you issue an invoice. That invoice is also called the consulting invoice or statement of charge.

However, when the client/customer receives the same document, they refer to it as a bill.

The invoice/bill usually contains the following information:

• Your and your company’s name
• Description of the service/product provided
• Price
• Payment deadline and payment terms
• Client/customer’s contact and account information

Therefore, billing and invoicing software is more or less the same thing. They usually contain a variety of features. These include:

• billing arrangements, such as payment plans, subscriptions, and discounts
• customer data
• balance information
• record of purchases

On the other hand, accounting software enables users to keep track of their financial transactions. Accounting is fundamentally different from invoicing in that the former is more complex and deals with all kinds of financial transactions, not just invoices.

For a run-through of invoicing terms and concepts, read this invoicing guide.

All in all, as I mentioned in a previous post on tracking time for billing purposes, whatever tool or solution you might want to use, spreadsheets aren’t it.

Benefits of invoicing software

Here are the significant benefits you can expect once you start using invoicing software in your business:

Creating new invoices becomes easy and fast

When you start using billing software, you can expect it to generate invoices automatically. After the initial setup, it stores, calculates, and enters all the required data. The data includes names, amounts, descriptions, taxes, and credit card numbers.

If programmed to do so, the software can send the invoice automatically, without your supervision—even recurring invoices whenever you schedule them.

In addition, some billing software adds barcodes or QR codes, making the payment process even faster.

Also, they can track your account and balance, notice delayed payments or unclaimed offers, and send automated reminders to your clients.

Generating and sending an invoice can be done in a few minutes.

Making use of customer history and data

Customization is the golden rule for any business that wishes to thrive in the modern market.

According to HiverHQ, lack of customization is one of the main causes of poor customer service, which leads to increased churn rates and bad reviews.

Nobody wants that, especially small businesses.

The invoicing software will keep data about each customer’s requirements, payment history, and required services. Thus, there will be no papers to lose or misplace and no folders taking up space on the shelves. All the transaction information you need will be only a click away.

Better data organization

You might think, “Gosh, that’s a lot of data!” you are right.

The billing software will save all the essential information about records, stock, deliveries, and customers’ history of payments on its server. Of course, you will have access to everything whenever you want.

Of course, the best billing software will implement the highest data security standards and ensure the local privacy policy rules are followed.

Facilitating online payments

Online payments aren’t only a buzzword. For most startups, online payments are the only payment option available.

Tech startups offer an excellent example of how risky late payments can be. Specifically, their subscription-based business model relies on payments they receive only after free trials.

According to the Younium subscription management guide, SaaS companies can provide hybrid pricing models. For companies that sell B2B services, this can involve a lot of money. The cash flow of some startups is so affected by this delayed income that they must use SaaS loans to remain liquid.

One of the ways to avoid the unpredictability of late payments is to use billing software. It will connect your customers with an online platform to make payments in just a few clicks. Using an online payment gateway reduces resistance and friction from

Invoice design

Aesthetics and visual design are important aspects of marketing. People are visual beings and tend to remember brands through colors and shapes.

This makes the visual design even more relevant for small businesses and startups. As they struggle to survive the fierce competition, small businesses need a strong brand identity. You wouldn’t think of opening an office or owning a business van without attractive signs, would you?

Therefore, you should use every occasion to display your brand’s identity. Why not on your invoice? It will look nicer and make you seem more professional and reliable when communicating with your customers.

Most billing software, such as Paymo, allows you to customize your invoices and explore different versions until you find the right one. Of course, you can format and download PDFs of your templates using a simple and quick drag-and-drop interface.

Get access to multiple payment options.

The majority of popular billing software comes with integrated payment gateways. Accepting multiple payment methods will increase customer satisfaction. It will help you build a more substantial customer base and add a sense of reliability to your brand.

Tax reports and filing

Tax accounting and filing is a complex and tiresome job. Any mistake can cost you a great deal. Since most small business owners don’t have any background in accounting, they have a shortcut: they use billing software.

Some invoicing software can prepare tax forms and generate tax reports. With access to all transactions, it can calculate, file returns, and audit everything. You won’t need to visit the government website.

Most importantly, apps like these can keep you focused and help you avoid tax penalties.

More accurate information

Surprisingly, most businesses still use spreadsheets and even paper accounting books. Thus, using billing software doesn’t only give you a tremendous competitive advantage; it will also significantly reduce the chance of error.

With that in mind, it is no wonder that customers trust businesses that use billing software.

According to research published on Statista, 78% of customers believe that invoicing software is a safer and more convenient way to pay for goods and services. In addition, if an algorithm analyzes your data, there is much less data redundancy. Finally, automatic taxing and billing will free up your schedule so you can focus on your professional or personal affairs.

Multi-channel availability

Back when people used paper records, their books were available only in the office. However, you can access your finances anytime and anywhere with billing software.

This can come in handy in particular situations. Monitoring your balance in real-time on your phone and tablet can be priceless, especially during workcations and urgent customer complaints.

Why you need a mobile invoicing option

People no longer hesitate to pay using their phones. Recent research has developed the technology acceptance model. The model explains how mobile payment is accepted among customers. It turns out that most people trust mobile payments. The significant factors that influence their trust are

• regular government monitoring
• reputation
• security
• mobility
• ease of use
• enjoyable interface

The convenience of mobile invoicing is undeniable. For instance, Paymo optimizes its billing module for both desktops and phones. Customers can pay for your products and services quickly and easily with these billing capabilities. Mobile invoicing is effortless – no more than a couple of clicks on their touchscreens will be necessary.

An invoice managed on your smartphone – edit vs. preview mode.

At the same time, you will join the club of businesses that embrace the future. Forward-thinking entrepreneurs are highly appreciated since they deliver premium customer experience, including mobile payments.

Invoicing software is the future of accounting.

Why bother calculating your taxes manually and paying additional fees to bookkeepers? Using invoicing software to do the same thing will cut your expenses, boost your financial efficiency, and keep your accounting fees low.

Making errors in estimating taxes is a thing of the past. Forgetting to remind late-paying clients belongs to the past as well. Now that billing is automated, it helps business owners easily create appealing invoices, track their payments, and provide a next-level customer experience.

She was first published on September 1, 2022.