Picture this: you don’t have to spend time chasing down customers and clients. Your controller no longer gives you somber biweekly updates on your outstanding accounts. Your accounts receivable no longer rivals your bank account balance.
Sounds nice, right?
Though I’m sure accounts receivable will always reserve a loose chokehold over our happiness, billing and payment software (which is interchangeably referred to as invoicing software) can feel revolutionary for a small business that’s manually handling all of the accounts receivable tasks in their business.
Take it from me: I was running a marketing agency and had to forgo every second paycheque for months due to cash flow issues, while our revenue looked great. After implementing automated billing and payment software, I was able to refocus on creating an amazing service for clients, rather than constantly appearing in their inbox to beg for money.
10 Best Billing and Payment Software
There are certainly better or worse options depending on your business. Here’s a range of popular invoicing software solutions and the use case that each is best suited for:
- Quickbooks Online: Best for small business accounting.
- Square Payroll: Best for mobile payments.
- FreshBooks: Best for time tracking and invoicing;
- Zoho Books: Best for intuitive accounting and financial management.
- Xero: Best for multi-currency accounting.
- Jobber: Best for field service management.
- Wave: Best for free invoicing and accounting.
- BQE Core: Best for professional service firms.
- Maxio: Best for automated billing and payment processing.
- Chargebee: Best for flexible billing and payment management.
Expert Pick
Best for small business accounting.
What Is Billing and Payment Software?
Billing and payment software is a type of software designed to help businesses manage their invoicing and payment processes. It is primarily used by small and medium-sized businesses that need to invoice customers for products or services they have provided. The software helps businesses streamline their billing process, manage customer payments, and track their financial transactions.
Invoicing software is used to accomplish a variety of tasks, including creating and sending invoices, setting up automated payment reminders, accepting online payments, and tracking outstanding balances. The software can also generate reports to help businesses keep track of their cash flow, monitor customer payment trends, and manage accounts receivable. Overall, the software helps businesses stay organized, save time, and get paid faster.
Types Of Billing and Payment Software
When considering the best invoicing software for you, it’s important to consider the complexity of your business and the level of customization that you need.
Here’s a breakdown of different types of billing and payment software available in the market, their features, and the target users:
- Basic Billing and Payment Software: This type of software focuses on basic invoicing and payment processing. It helps users create and send invoices, accept online payments, and track payment status. These solutions are usually affordable and easy to use, making them a good fit for freelancers, small business owners, and sole proprietors. Some examples of basic invoicing software include FreshBooks, Zoho Books, and Wave.
- Advanced Billing and Payment Software: This type of software offers more advanced features such as a client portal, time tracking, and project management. It’s designed for businesses that need to manage complex billing scenarios, such as those with multiple clients, projects, or products. Advanced billing and payment software typically comes with a higher price tag and requires some technical expertise to set up and use. Examples of advanced billing and payment software include QuickBooks, Xero, and BQE Core.
- Industry-Specific Billing and Payment Software: These are software solutions that are tailored to the specific needs of a particular industry, such as medical billing software, legal billing software, or construction billing software. These solutions often have unique features that are specific to the industry they serve. For example, medical billing software may have features for insurance claims processing and HIPAA compliance, while legal billing software may have features for tracking billable hours and managing client trust accounts.
- Standalone Billing and Payment Software: A subset of basic billing and payment software, standalone software is focused solely on billing and payment processing and does not include other accounting or ERP features. Standalone billing and payment software is typically more affordable than integrated solutions and is a good fit for self-employed freelancers or startups that only need basic invoicing and payment processing features.
- Integrated Billing and Payment Software: This type of software is a module of larger accounting systems or ERP systems and includes features such as general ledger, accounts payable, and inventory management. Integrated solutions are designed for businesses that need a complete financial management system and prefer a single software solution for all their accounting needs.
Overall, the type of billing and payment software that’s right for you will depend on your business needs, budget, and technical expertise. It’s important to evaluate different options carefully and choose a software solution that’s tailored to your specific requirements.
How To Choose Which Billing and Payment Software To Buy
In order to better understand which of the above options are best for you, it’s best to understand the type of buyer you are or represent.
Which type of buyer are you?
Consider the following categories to determine which software may be best for you. There are exceptions to every category though, so read through other sections if you don’t feel that the section describing your business has appropriate functionality for you.
Freelancers and Sole Proprietors
Freelancers and sole proprietors typically have a lower volume of invoices and may not require advanced features such as time tracking or inventory management. A basic billing and payment software like FreshBooks or Wave would be a good fit for them, as they offer affordable pricing and easy-to-use features for creating and sending invoices and accepting online payments. The best invoicing software solutions typically have a free plan for those that require very little system complexity.
Small and Medium-sized Businesses
Small and medium-sized businesses may require more advanced features such as time tracking, project management, and inventory management. QuickBooks and Xero are both good options for SMBs, as they offer a wide range of features to manage complex billing scenarios. QuickBooks is particularly popular among SMBs due to its user-friendly interface and large user community.
Large Enterprises
Large enterprises often require customized solutions that are tailored to their specific needs, such as specific process automation and staff augmentation within accounting departments. BQE Core is a good option for larger enterprises, as it offers customizable features for time tracking, project management, and billing. The software is usually also able to be integrated with other enterprise systems, such as ERP or CRM Systems.
Non-profit Organizations
Non-profit organizations have unique billing needs, such as tracking donations and grants. Aplos is a good option for non-profit organizations, as it offers features such as donation tracking and fund accounting. The software is also designed to help non-profit organizations comply with tax regulations and reporting requirements.
Legal and Medical Professionals
Legal and medical professionals have specialized billing needs, such as trust account management for legal professionals and insurance claims processing for medical professionals. PracticePanther is a good option for legal professionals, as it offers trust accounting features and integrates with popular legal research tools. Kareo is a good option for medical professionals, as it offers features for insurance claims processing and patient billing.
Once you know who you are and have a better idea of the type of software you’re after, it’s time to consider what you’ll need it to do.
Key features to look for
There are several important features that billing and payment software should have. Here are some of the most important features:
- Invoicing: Unless your invoicing system is already completely figured out, this should be non-negotiable. The ability to create and send invoices is the most important feature of billing and payment software, so invoicing should be easy to use and customizable to fit the specific needs of your organization. Your invoicing solution should be able to include detailed information such as item descriptions, quantities, and prices, as well as any applicable taxes or discounts.
- Payment Processing: The ability to accept online payments is also a crucial feature of billing and payment software, to keep the process efficient and automated. Payment processing should be secure and support a wide range of payment methods, including credit cards, PayPal, and ACH transfers. It’s important for the software to provide you with real-time updates on payment status and, issue reminders for unpaid invoices.
- Reporting and Analytics: Billing and payment software should also provide users with detailed reports and analytics to help them manage their finances more effectively. Reports should be customizable and provide insights into key metrics such as cash flow, revenue, and outstanding invoices. Analytics can help users identify trends and make more informed business decisions and it’s great to have a single dashboard to review all of this information together.
- Time Tracking: Time tracking is an important feature for businesses that bill clients based on hourly rates. The software should allow users to track time spent on specific tasks or projects and generate invoices based on that data. It’s important for the time tracking feature to be accurate and user-friendly to ensure that users can track their time easily and effectively.
Overall, the most important features of billing and payment software are invoicing and payment processing, as they are the core functions of the software. Reporting and analytics are great to have if the price increase isn’t too steep, while time tracking is only really necessary if your business does a lot of hourly work.
Functionality to look for
The previous features are what the software needs to have. Key functionalities are what the software needs to help you do. Here are some of the most important functionality to look for when evaluating billing and payment software:
- Efficiency: One of the main advantages of billing and payment software is that it can help users save time and increase efficiency. By automating invoicing and payment processing, you can get back to the things that really matter, such as product or service creation and refinement or sales. Simple things like sending automated notifications can decrease stress for you, whilst ensuring that late payments are handled.
- Accuracy: By automating invoicing and payment processing, you can reduce errors and ensure that all financial data is up-to-date and accurate. This can help you make more informed business decisions and avoid costly mistakes, such as forgetting sales tax in your first year of business, which I’ve seen far too many people do when getting started.
- Customer Satisfaction: We know how it can help you but what about how it can help your customers? Billing and payment software can help improve customer satisfaction by providing users with a seamless and convenient payment experience. By accepting online payments and issuing professional invoices, businesses can build trust and credibility with their customers, which can lead to increased loyalty and repeat business.
- Financial Control: If you opt to spend a bit more and get a comprehensive billing and payment software solution, you can gain better control over your finances. By providing detailed reports and analytics, you can quickly identify areas of your business that need improvement and make more informed financial decisions.
- Customization and Integration: Billing and payment software should be customizable to fit your business’ style. Customization can include branding, invoice templates, and workflows, allowing you to service clients and customers in the most professional matter. Integration with payment gateways and other software systems is also incredibly nice to have if you have a suite of financial software tools, as it can help you streamline your financial management processes and reduce manual data entry.
Important purchase considerations
Aside from features and functionality, there are other important purchase considerations when evaluating billing and payment software. Here are a few that I always look for when evaluating new software:
- Pricing: There are many excellent billing and payment software solutions available, so you shouldn’t expect to pay through the roof for it. When setting your budget, consider the time that you’ll save by using the software, the amount of money that this will save you, and throw in a few extra dollars for peace of mind. Consider the comprehensive cost of the software, including any additional fees, such as transaction fees or payment processing fees.
- Ease of Use: Billing and payment software should be easy to use, with a user-friendly interface and intuitive workflows (such as recurring invoices or automatic application of late payment fees). This can help users save time and reduce the likelihood of errors or confusion.
- Scalability: If your customer- or client-base expands tenfold, will your current system still cut it? Think of the best-case scenario for your business and inquire about this functionality. Additionally, make sure that you won’t have to pay more for things like unlimited invoices or additional payment options.
- Customer Support: Good customer support is essential when evaluating billing and payment software. The last thing you want is a product that’s inconsistent but, should errors arise, you need to know that you’re not on your own trying to fix it.
- Security: Billing and payment software should be secure, with robust encryption and other security features to protect your data. You should look for software that’s compliant with industry standards, such as PCI DSS, and provides regular security updates.
By taking these considerations into account, you can choose software that will work well, won’t expose you to security threats, and, most importantly, give you a good return on investment.
Other Financial Analysis Software
Key Takeaways
This software should be able to be implemented quickly and augment your abilities as a business operator to save you time and mental energy. While there are specific software tools that are better suited for specific businesses, there are many products available and finding the best one for you shouldn’t be overly difficult.
Consider your business’ needs, set your budget, and then explore some other features. If you need help while going through this process, reach out to our team and we’ll get you situated in no time.
