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What is billing and invoicing software?
Billing and invoicing software automates payment invoicing, receiving, and processing. These systems efficiently process complex accounts across multiple customers and product lines by incorporating contract data and customer relationship management (CRM) tools. Billing and invoicing solutions work in tandem with accounting applications and provide a variety of revenue reporting and compliance tools.
The benefits of billing and invoicing software
- Cost savings: Small businesses spend a lot of extra money to process paper invoices. Faster processing and paperless transactions save businesses money.
- Automated simplicity: Billing and invoicing software automatically performs billing calculations, reducing workload, saving time, and preventing human error.
Typical features of billing and invoicing software
- Invoice history: Maintain a client-by-client archive of every invoice for simple and accurate reporting, risk management, client relations, and sales data mining.
- Time and expense tracking: Keep a log of accumulated billable time and expenses. Automatically add this data to invoices for faster billing with fewer opportunities for error.
- Contact database: Build a client contact information database within the billing and invoicing system to avoid the redundant expense of a dedicated CRM tool.
- Customizable invoices: Design invoice layouts, content, and branding to tell the best possible story. Develop customer trust by delivering content consistent with existing brand materials.
- Online invoices: Deliver and display invoices online for simplicity and global accessibility in any currency. Receive payments immediately through online invoice interface.
Capterra’s billing and invoicing software directory lets you filter by feature(s) to only view options that meet your business needs, which can help narrow your software shortlist.
Considerations when purchasing billing and invoicing software
- Simplicity versus customization: Intuitive billing and invoicing software with clean user interfaces and guided instructions can simplify invoice creation and management. Customers appreciate invoices that are easy to interpret, and for systems that accept online payments, user-friendly designs are critical. However, simple systems occasionally sacrifice customizability by offering fewer options to keep users on track. On the flip side, the ability to customize software often carries a steeper learning curve. Determine how tech savvy your employees and customers are, and balance that against your need for customization.
- Integration: Many billing and invoicing software options integrate with other software systems, using application programming interfaces (APIs) to import and export data between systems. As an example, businesses can create an invoice within their billing software by importing customer contact information from their CRM solution and purchase records from an inventory system. Then, the business can deliver the invoice by exporting it to an email delivery solution. Enterprise-level software may manage all of these steps, but integrations allow small businesses to develop affordable solutions while continuing to use their existing software. When selecting billing and invoicing software, evaluate how easily potential systems integrate with your accounting tools, payment platforms, and other applications.
- Cloud management: Moving billing and invoicing data to secure online servers can be more secure than most offline ledgers and spreadsheets on your hard drive. In-house server solutions offer customization, but maintenance is a lot of work. Stolen customer data and exposed business intelligence are an enormous risk for small businesses that try to handle security on their own. Hosting data in clouds managed by professional billing and invoicing software services may increase data security.
Relevant billing and invoicing software trends
- Artificial intelligence (AI) and machine learning: In the next few years, billing and invoicing software will begin incorporating some type of AI. Small businesses will be able to predict customers’ buying habits with greater accuracy, and software will provide revenue trends insight faster than reactive monitoring can. According to a Capterra research, 53% of small and midsize businesses (SMBs) are using or plan to use AI technology within the next one to two years.
- The internet of things (IoT): The IoT lets objects communicate with people, software, and other objects. Devices can alert you to all kinds of things, such as the arrival of a new invoice. The industry has moved past emailed invoices; app notifications on mobile devices and smart speakers get more attention than email these days. Brands that invoice using apps and IoT devices are more connected to their customers. Increasingly, consumers use internet-connected devices and wearable technology to make purchases. Certain billing and invoicing software solutions can automatically process one-tap sales on IoT devices. According to a Capterra research, 73% of SMBs are using or plan to use IoT technology within the next one to two years.