Business in the 21st century increasingly relies on digitalization and automation. Companies in most fields have found that expanding efficiencies through the use of technology has created additional competitive advantages for them.
One area where technology has advanced rapidly in the past generation is invoice software – or software apps using for invoicing.
Why Do You Need Technology for Invoicing?
Keeping track of the sales process has always proved challenging. In pre-digital days, businesses faced challenges in keeping track of invoices, inventory, and other aspects of getting goods to customers while charging them properly.
Traditionally, businesses used a paper-based invoicing system. Many still do. Using paper-based invoices alone offers one benefit to businesses, that of familiarity. Owners and staff remain comfortable with the system that they have used for decades. If it ain’t broke, they reason, don’t fix it.
The challenge for these businesses comes when the competition adopts the use of invoice generator software, which includes mobile invoicing capabilities. Invoice generator software eliminates the need for hours of repetitive tasks related to manual invoicing. It frees up staff to focus on other core business functions, boosting productivity.
Invoice maker software also moves billing and other communications online, saving businesses in postage costs. Now that business has an advantage over the one that declined to adopt new technology.
Adopting a new software system takes time and resources. In the long term, increased productivity helps it to pay for itself in saved time and money.
A European study demonstrated the increased level of efficiency enjoyed by companies using invoicing software. A clerk reviewing 6,000 invoices per year in the traditional, manual fashion could review 90,000 in the same period.
Additionally, invoicing software can make records easier to use when compiling taxes.
Finally, invoicing software and related applications make needed information available anytime, anywhere. When on business trips, you can track billing on your own without tying up staff by having them track down information.
What Is Invoice Generator Software?
In its most basic form, the best invoice software programs help your business by automatically generating billing for goods and services provided. Generally, invoicing software creates a list of services and products, adds their cost along with any discounts, and issues the bill through email or other electronic delivery as an invoice.
The invoices come as ready-made templates, reducing time spent while also providing a professional level of consistency in billing.
Online and cloud-based invoicing systems make the process of billing, collection, and recordkeeping more automatic and simple for your business.
What Does Invoice Maker Software Do?
An invoice maker software solution has three main functions that can help to speed the process of billing.
First, it creates and customizes invoices. Invoicing software allows you to quickly populate a premade field with the necessary information, then send it online. No need to create a bill from scratch or even leave your desk to mail it. Invoicing can also be done on your mobile phone when away from the office. You can also make custom changes to bills when appropriate.
Available templates help your invoices look more professional and consistent, helping you to get paid more quickly.
Another time-saving feature in invoice generator software lies in its incorporation of estimates into the process. You can easily shift an estimate for service into an invoice and rely on the system to keep your data organized. Those using the system can also customize how clients or customers receive their invoices. Some prefer delivery, but others require to pick up from an online portal.
Second, invoice software makes both billing and payment much easier to process. Invoicing software usually offers the capability of creating an online portal to allow for automatic payment, including using credit, debit, or electronic checks. It also can automatically accept and translate foreign currencies into US dollar equivalents and interface with payment apps such as PayPal. Offline traditional payments can be noted and tracked, as well.
Finally, invoice software can provide more than fast processes. You can also set it up to generate reports and even analysis. It can examine, for example, which clients pay on time and which habitually pay late. Invoicing software can help you create a database with information that can help you adapt more efficient billing and payment practices.
Invoicing software serves almost like additional staff in that it performs traditional billing functions much more efficiently while offering data analysis.
What Is the Difference Between Invoicing and Accounting Software?
Sometimes even business owners get confused about the differences between invoicing and accounting software. This happens often with small businesses and startups run by individuals without a lot of business administration experience.
Invoicing software has a different function than programs designed for accounting. While invoicing and payment represent a key part of accounting, accounting must keep track of the larger picture.
Additionally, accounting software usually does not provide all of the helpful features that elevate invoice maker software solutions above traditional manual practices.
Happily, accounting and invoice software can work in an integrated fashion. When used together, they can serve as a comprehensive picture of your accounts for tax purposes.
Pros and Cons of Using Invoicing Software
Invoicing software can offer several advantages and disadvantages, depending on your business.
Disadvantages of Using Invoicing Software
First, invoicing software sends out automatic bills to email in most cases. You have to inform your customer to watch his or her spam feed. Automatically generated invoices will often end up in these files, making them difficult to notice when they come in. Many late payments occur because the client never saw the bill.
Using online invoicing exclusively to the exclusion of other systems can prevent you from engaging your full customer base. Depending on your market, some may not have access to consistent internet with any quality. They may also choose to not pay or receive information online. In this case, you should have a manual billing system that works alongside and with the software.
Also, there is no global standard for invoice software. Those who have learned one system in another capacity may have to relearn invoicing over again when they come to work for you.
Advantages of Using Invoice Software
The advantages of using invoice software far outweigh issues that its use might lead to.
The disadvantages have easy fixes that offer little or no additional cost. First, notify the customer that the invoice may end up in his or her spam folder. Follow up phone calls can be made after a reasonable time with no response.
Second, identify customers that have issues with online invoicing or using the internet in general. You can generate traditional bills, but also need to make sure that information gets entered into the system properly. Most businesses will have few customers who find this form of invoicing problematic, unless in specific fields that have an older market or target people in remote areas.
You will also see an advantage in its ease of use. Once you and your staff master the system, which is easy for those of all levels of experience to learn, you will find it easier than hand-writing and mailing bills. You will also save the cost in postage by using email or pay portals.
Another advantage lies in the reliability of delivery. Even if the invoice ends up in a spam folder, it still almost always gets successfully delivered. Confirmation of delivery is simple. Traditional delivery through the postal service brings a much higher chance of the bill getting lost in the mail. Also, even when bills reach their destination, disorganized customers may lose or misplace the bill.
With invoice software and apps, you will know the exact time and date of delivery. You may also be able to receive messages when the bill gets opened.
Most importantly, using invoicing software saves money. You use less postage, and your staff invests fewer work hours into getting your business paid.
Other Helpful Features of Invoice Software and Applications
Invoice software offers several helpful features that make the process easier and more productive. These include several options that can enhance even the professional appearance portrayed by how you bill.
Most invoice software offers a range of invoice templates reflecting different professional style designs, each appropriate to different types of businesses. Graphic designers who put these together understand that a construction contractor will want a different look to his font and other elements of the invoice then a pastry shop, for instance.
Many invoice programs offer easy quote conversion. The program will submit a quote to the client or customer. If they click that they approve the quote, it can automatically transform the quote into an invoice to be sent at the proper time.
Invoice software also contains your full range of prices, if inputted. It can quickly figure a total cost for goods and services, replacing the need to manually look up needed pricing information.
Use your invoicing software to help you keep track of inventory. You can set up the program to automatically deduct inventory from your stock list once it gets marked as shipping out.
Invoice software gives you multiple options when it comes to making a customer aware of their bill. Although most prefer to send out invoices via email, you may set up an invoice portal with the software. Instead of sending an invoice, you message them a link where they can come and make a payment. This option enables you to know when the customer accesses the page and pays for the product or service. Also, you can more easily correct errors in the invoice in a portal under your control.
Using invoice software makes it easier to accept credit cards and debit cards or perform ACH withdrawals. Importantly, it also enhances your data security. When automated systems take payment information, they can lock it away in a secure silo or delete it as soon as it is no longer necessary to have. The system can also restrict access to sensitive personal information. With industry guidelines now spelling out consequences for data breaches, it is vital that your payment systems be secure. Invoice software can serve as a part of that process.
When fully integrated into the full range of in house and mobile devices, invoice software can enhance convenience. Tradespeople, for example, can send a bill from their mobile phone directly at the close of a job. This helps to ensure that the vital step of billing
Invoice software can go a long way toward helping your business manage its accounts receivable. When bills get paid, the software can automatically incorporate the information into the system and give you an up to date account of current payments.
Additionally, you can instruct the software to set up a system of alerts on each invoice. You can set them for any period, but normally they alert business owners after 30, 60, or 90 days. Once non-payment has hit the preset stage, the system can alert you as to which accounts are overdue. Alerts can also go out to clients and customers, reminding them of due and past due bills without involving your time.
Financial Forecasts and Projections
Most businesses make the creation of financial forecasts and projections part of their standard operating procedures. Financial forecasts tend to envision business performance over a year’s time, while projections run from at least a year. These statements are related in that they can be used for internal or external purposes in predicting business performance in the future. Internally, companies use them to inform the team of expectations. With those outside of the company, they are most often used to attract investors or other stakeholder support. Much of the information that invoice software collects and organizes would help in the production of these statements.
Invoicing software can also work seamlessly with automated debt collection systems for accounts too long overdue. They can also serve as reliable records for when accounts get turned over to official collections agencies.
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